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  • Michael DiBartolomeo

How to Stop Student Loan Wage Garnishment

Updated: Feb 24, 2022

The United States Department of Education has the right to garnish 15 percent of a borrower's disposable pay if they have defaulted on any federal student loans. A court order is not needed to do this. The wage garnishment then continues until the full debt has been repaid. Wage garnishment typically makes it harder for a person to pay their bills. However, there are ways to stop wage garnishment.

The initial step is to learn about the common methods used to stop administrative wage garnishment. Note that there are different garnishment rules for the Department of Education on federal student loans than with other debt types and private student loans.

Wage Garnishment

Is It Possible to Reverse a Wage Garnishment?

It is possible to attempt to have the wage garnishment reversed, modified, or ended, and there are specific things to do. These include filing an appeal to the court that says the borrower doesn't agree with the garnishment. Another choice is to negotiate monthly repayment agreements from the lender. Typically, there must be a balance, making it possible for the borrower to pay off the loan to the right agency. Often, this requires a new hearing so that the person's income can be reevaluated by the state.

How to Stop Garnishments Once They Start

Generally, the only way to stop an administrative wage garnishment once it starts is to fully pay off the student loans that were reneged on. However, there may be certain circumstances that may be able to help reduce the wage garnishment or remove it altogether. These include:

Lender Never Followed the Right Procedure

If the lender holding the loan doesn't follow the right procedures, the wage garnishment order could be terminated. This can include a failure to provide the borrower with 30 days' notice of the wage garnishment or sending the notice of garnishment to the wrong address. However, bear in mind that borrowers must, by law, keep their addresses updated with the creditor. If the borrower doesn't do this, delays for the wage garnishment notice receipt are their fault and not that of the creditor.

The Loans Aren't the Borrower's

It is possible to request a hearing if a person receives a wage garnishment order. Ask for specific proof that the debt is actually the borrowers. If it can be proved that identity theft occurred and the person didn't benefit from the loans or borrow them, the wage garnishment can't legally go into effect. There is no need to make payments to the lender because that money wasn't used by the person in question.

Renegotiate Repayment Terms

Borrowers are allowed to negotiate repayment terms with a collection agency. They can also go directly to the United States DOE to get new terms. The borrower must send their first payment under that new agreement to the Department of Education within 30 days of when the garnishment notice was sent. If that happens, the administrative wage garnishment order doesn't go into effect.

The Borrower Was Fired

If a person was fired from a previous job, the garnishment can be suspended during the first 12 months of the next job. This doesn't erase the student loans, but it gives the person time to reorganize and be able to pay.

The Borrower Works at a Minimum-wage Job

Federal rules are in place to limit wage garnishments for any defaulted student loans. This comes to about 15 percent of the disposable pay for the borrower. On top of that, the borrower has to still have 30 times whatever the federal minimum wage is to live on. If a person works a minimum-wage job, then the wage garnishment amount might even be eliminated or drastically reduced. Waitresses and waiters typically earn less than minimum wage, so they are often exempt.

The Borrower Recently Became Self-employed

If the borrower is self-employed, this means they aren't anyone's employee and cannot have their wages garnished. This can include a variety of people, such as:

  • Handymen

  • Plumbers

  • General contractors

  • Freelancers

  • Truck drivers

  • Commissioned real estate agents

However, even independent contractors can have their income subjected to wage garnishment if they operate their own business, and it pays the wages. However, it might also be possible to limit the wages to the current federal minimum wage, which helps the borrower avoid any garnishments for the unpaid loans.



It should be noted that no one can discharge their student loans through bankruptcy. However, during the case, any garnishments are suspended. Once the bankruptcy goes through, the garnishment comes back into play. Many people find that this works in their favor because they have fewer debts to repay and can live comfortably with the garnishment in place.

Student Loan Was Discharged

Once the student loan has been discharged, wage garnishment immediately ends on it. This includes discharges from permanent or total disability, closed schools, unpaid refunds, and false certification discharges. If the garnishment continues, this is in violation of federal law. Contact the lender or school that was attended to start the process of stopping the garnishment. This can take a while, so it is advisable to begin as soon as the issue is noticed.

Appeal Because of Financial Hardship

It is possible for borrowers to request a review based on a financial hardship. Though it isn't guaranteed to be approved, it can suspend the wage garnishment for up to a year if it is. Generally, it's granted for medical issues, loss of a job, a divorce, and other life-changing events that may be out of the person's control. However, it must be a long-term problem. For example, a divorce or the birth of a child means reallocating money for a while.

Rehabilitate Old Debts

The borrower can choose to rehabilitate their debts by making nine out of 10 full, consecutive, reasonable, voluntary, and affordable monthly loan payments as part of the current loan rehabilitation agreement. If that happens, the loans aren't considered to be in default anymore, and the garnishment effectively ends.

Borrowers can choose to rehabilitate their loans through consolidation whereby they agree to repay the consolidation loan through the income-driven plan. Typically, these loan payments cost less than with the garnishment amount.

Fully Pay Off Student Loan Debt

If the borrower has enough money saved up in a savings account to pay off the debt, the wage garnishment ends. Sometimes, people can ask friends or family members to help them with this. Typically, the person's parents can get a home equity loan or use their savings to assist their child in paying off student loans.

Though this isn't the best scenario, it does mean that the debt is fully repaid, and the borrower's wages are no longer taken out to help cover the loan. Then, it is between the borrower and the helper to decide how and when repayment occurs. This can often be done outside the legal system if necessary.

Refinance Debts

It is sometimes possible to refinance the debts into a private loan. Federal loans are also part of this scenario. The newest loan created pays off the old one, which effectively ends the wage garnishment. However, it is often a challenge for borrowers who fail to pay on federal student loans to be eligible to receive a refinance option. Plus, if the federal loan is refinanced, there is a loss of government-backed benefits. These include the income-driven repayment plan, various options for a deferment, and loan forgiveness programs. In most cases, the only way to do this is to have a cosigner on the newest loan. Typically, lenders are wary of doing this because the borrower appears to be a significant risk to them.

Request a Settlement

Sometimes, borrowers can settle the defaulted student loans. This often means they actually pay less in total than what was originally owed. There are three standard choices available with this option. Typically, the collection charges can be waived, so the person is only paying on what they owe and doesn't have to deal with the extra fees. The entire loan balance can be reduced by 10 percent, as well. This removes the garnishment, but the person is expected to repay the full amount each month on time. Otherwise, it goes into default again. The last option is to waive half of the accrued interest from the moment of default until that moment. However, interest starts accruing again with the first repayment installment.


There are multiple reasons why a person defaults on a federal student loan. It's always best to avoid this situation at all costs. When the loan defaults, the borrower is required to pay significant fees, have higher interest rates, and may have to deal with collection agencies.

Still, there are times where this is unavoidable. Wage garnishments are likely to happen, but there are ways to prevent them or reduce the amount taken out of a person's pay. It's a good idea to consider the choices carefully to determine the best course of action. That way, the loan is paid, no late student loan payments are on your credit report, the borrower can re-establish their credit, and things can be taken care of relatively easily. Discussing your questions with some of the most qualified financial advisors Pittsburgh PA has to offer could make your options more clear and they can also answer any of your question regarding tax-managed mutual funds.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. The content is developed from sources believed to be providing accurate information.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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