Get Out of Debt Guy

My Wages Are Being Garnished for a Student Loan

Posted June 24, 2014

WRAL Reader Question

Dear Steve,

I have a defaulted student loan. I have been making monthly payments. The department of Education is also taking my taxes. But they tell me that they are not garnishing my wages. But i have paid in $451.71 into garnishments. All that is Listed is Student Loan. But if the department of education is not doing it, then how do i find out who is? Should HR be able to tell me exactly who is garnishing my check? Or will they just tell me that its a student loan?


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Dear Crystal,

What we have here is a mystery that needs a bit of investigation.

It sounds as if you have an administrative wage garnishment for student loans but the tax intercept on top of that sounds odd. Of course the easiest way to avoid the tax intercept is to adjust your withholding so you are putting more money in your paycheck each month and get less of a refund to intercept.

The HR department should be able to identify who the garnishment order was from. If it was a federal student loan they would not need to sue you to garnish. If it was a private student loan you would have been sued first before garnishment.

The situation you describe sounds like a private loan garnishment with a federal loan intercept. But that's just a wild guess based on what you shared.

The good news is if you only had a federal student loan then starting in July you can take advantage of the favorable loan rehabilitation program where refund intercepts and wage garnishment will stop and your monthly payment will be based on what you can afford to pay. After five payments your loan would be out of default.

My advice would be to contact HR and ask for more information and/or a copy of the garnishment order and to wait till July and contact the Department of Education or your federal loan servicer and ask about the five payment rehabilitation program.


Steve Rhode
WRAL Get Out of Debt Guy

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About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.