Get Out of Debt Guy

The Easiest Way to Stop a Student Loan Wage Garnishment - Loan Rehabilitation

Posted January 8, 2015

I can't tell you how frequently people ask me for the best advice to deal with an Administrative Wage Garnishment for a federal student loan. It's quite often.

And the tragedy is the wage garnishment could have been easily avoided. The loans should never have been allowed to get to that point because there are such good programs to avoid the garnishment.

When it comes to federal student loans the government does not have to sue you or take you to court to just start taking your wages.

Federal student loan servicers are frequently not very helpful when wages start being garnished. I'm not sure if it is because they just don't care or don't know about options. Regardless, the end result is the same, wages can be garnished for up to 25% of income if someone has more than one student loan. If all the loans were previously consolidated into one or they only have one in trouble then the maximum is only 15%.

If you find yourself with an Administrative Wage Garnishment the best way out is through the U.S. Department of Education loan rehabilitation program.

If your student loan servicer or collector won't give you the straight scoop on how to use rehabilitation to stop the wage garnishment, contact the Department of Education for some advice.

In general though, the Department of education must agree to a reasonable and affordable payment, that will be temporarily tacked on above your wage garnishment. I've seen these payments as low as $5. If you go this route and bite the bullet for the five required payments, the wage garnishment will stop.

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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.