Student Loan: What Is Wage Garnishment and How To Avoid It?

Brigitte Macron, wife of the French President, (C-L) and Switzerland's First Lady Muriel Zeender Berset (C-R) pose with pupils in a classroom as they visit the public French language school (Ecole cantonale de langue française), in Bern, November 15, 2023. French President Emmanuel Macron and his wife Brigitte Macron are on a state visit to Switzerland from November 15 to November 16, 2023.

Defaulting on student loans can lead to significant repercussions, such as having your wages garnished. It is essential to have a clear understanding of the process and your rights to effectively manage your debt.

If your loan falls into default, your employer may need to deduct a portion of your pay and send it to the loan holder for debt repayment. This withholding, or garnishment, can persist until the debt is completely paid off or resolved.

Employers are legally obligated to withhold up to 15% of an individual’s disposable pay if they hold federal loans.
The garnishment can remain in effect until the debt has been fully settled or resolved. Additional sources of income, such as tax refunds and Social Security benefits, may also be subject to garnishment.

Preventing Wage Garnishment For Student Loans

Defaulting on student loans can lead to significant repercussions, such as having your wages garnished.


Private lenders are required to obtain a court order in order to garnish wages. Depending on state laws, they have the authority to withhold up to 25% of disposable income. There are certain types of income that are safeguarded from garnishment, such as alimony and disability payments.

There are various ways to halt or avoid garnishment. Working out repayment terms with your loan servicer can be beneficial. You also have the option to request a hearing to dispute the debt or discuss any financial hardship you may be experiencing.

It is absolutely essential to raise an objection to garnishment within the specified 30-day period and present compelling evidence to strengthen your case. Preventing default is crucial. Consider exploring options such as deferment, forbearance, or income-driven repayment plans.

Considerations should be made when refinancing federal loans with a private lender, as it may result in the loss of certain federal protections.

The Fresh Start Program offers assistance to borrowers with eligible defaulted loans, providing a temporary halt on garnishment until at least September 2024. If you have experienced wage garnishment, we recommend reaching out to your payroll department to inquire about a potential refund.

Having a clear understanding of your rights and options is crucial when it comes to effectively managing student loan debt and preventing garnishment. It is important to be proactive in managing your debt and to reach out for help if necessary.

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