subject: The Basics Of Student Loan Wage Garnishment [print this page] Getting a college education is importantGetting a college education is important. Sometimes it is necessary to receive a loan in order to make it through school financially.
After graduation, if these loans are not paid back in a timely manner your wages may be garnished to compensate. The government may legally garnish your wages without first getting a judgment in court.
If they garnish your wages it can be up to a total of 15% of disposable pay that legally may be garnished. But keep in mind that no matter what, you can keep an amount equal to 30 times the current minimum wage.
The minimum wage in the United States since July 24, 2009 is $7.25/hour. Under the Higher Education Act, the Department of Education and security agencies can require employers to deduct a minimum of 10% of the indebted employee's pay check each pay period toward the repayment of the debt.
Depending on the situation, this wage garnishment is likely to continue until the entire debt is paid. This method is used only for the borrowers who refuse to voluntarily repay their defaulted loan.
The borrowers who continue to make regular and timely payments do not have to deal with wage garnishment. Employers who have received an Order for Withholding of Wages, must conform to the order by law.
The employers will only receive information that is necessary to conform with the wage garnishing order. The employers are prohibited from discharging the borrower from employment or subjecting the individual to disciplinary action due to their wage garnishment.
If any of this takes place you may want to talk to a professional.
Any individual who is discharged from their job or disciplined is allowed to seek restitution in federal or state court if such action occurs. Administrative Wage Garnishment is a tool of last resort used by the U.S. Department of Education to recover defaulted student loans through wage garnishment.
If your wages are going to be garnished you will receive a notice thirty days prior to the issuance and enacting of the Order of Withholding. It will notify you that the Department of Education intends on garnishing wages and will make the borrower's rights and appeal procedures clear.
There are a few steps you should take at this point that will hopefully help reverse the garnishment and help you pay off the debt.
First, contact the group who delivered the writ of garnishment. Ask them the options that they would suggest to you. In some cases, you can easily work out a payment plan with them.
Second, you can try to reverse the garnishment. Though very rare, this is a possibility. One way to do this is to file a, "Claim of Exemption" form with the court that issued the garnishment.
Third, pay the garnishment off in full. This is the best way to deal with the situation if it is possible. This will take the garnishment away completely and be the least stressful solution.
Fourth, wait it out. Some people chose to let the garnishment remain and continue to allow them to take wages from their check. This will continue until it is fully paid off.
Fifth, obtain documentation once you have paid off the debt. No matter which way you pay off the debt, make sure to obtain final documentation that states that you paid off the debt in full.
If wage garnishment of the borrowers disposable pay would produce an extreme financial hardship then you need to take action immediately. A wage garnishment can be withheld by filing a timely request for a hearing.
If a file is made, wage garnishment will be made until the hearing is completed and a decision is issued. Borrowers may also object, or file a request to a wage garnishment, if the validity of the claim is in question.
Also, you may object if the method enforced to collect garnishment is barred by law. The borrower is responsible for providing documentation or evidence to establish any objections that are raised in defense to the enforcement of the debt.
If this is true, it would be in your best interest to learn all you can about garnishment law.
If you are having challenges with paying your student loan or with wage garnishment issues, there is help with nonprofit organizations such as American Student Assistance. They offer outreach and education for students, loan repayment counseling, budget planning, information on repayment options, and even help for borrowers who have defaulted on their loans.
You might want to seek professional help if you are ever in fear of wage garnishment. A professional can lead you with their experience and help make the best out of this tough situation.
They will also be able to give you advice on the best steps to take. Education is often worth getting a little debt. Before you get a loan it is good to become familiar with wage garnishment.
