All About Student Loan Wage Garnishment

Economic times are hard at the moment.  Many loan holders have going into default and facing having their wages garnished to pay for those loans.  These loan types also include student loans.  Many times this happens simply because the lender was not able to contact the person who borrowed the money to make alternative payment arrangements.  Having your wages garnished can be financially detrimental as well as personally detrimental.  It is important that you be proactive and try to avoid your wages being garnished.

Know Your Rights

Just as with anything there are laws that will protect your rights as a borrower.  If you are being threatened with having your wages garnished you will need to know what you rights are and what the law says.  One of the top laws is that if you are facing student loan wage garnishment you cannot be fired from your employer.  Your employer might not be happy about this financial irresponsibly but they cannot punish you for it.

There are also limits as to how much of your wages can be garnished every week.  This is under the Debt Collection Improvement Act of 1996.  It starts that you can only have fifteen percent of your disposable pay.  Also if this garnishment will cause you a financial hardship you will have the opportunity to challenge it.

Communicate With The Collectors

One of the worst things you can do is ignore the bill collectors when they try to contact you.  You should always respond to the collection attempts.  When you choose to ignore the collector what it is telling them is that you are not willing to work with them to resolve the debt and then they will get tough on you.  Eventually you will need to repay your entire student loan debt so you should at least try to communicate with those that want to help you.  Of course the first thing that you will want the collector to do is to verify the debt.  This will usually take a couple of weeks.

Set Up A Payment Arrangement

Even if your student loan debt is through a government lender they will still work with you to make a payment arrangement that will satisfy both of you.  The lender will rather have you pay your debt than end up in bankruptcy court because you are ignoring your debt.  Many lenders will work with you to set up a payment plan that will work for your budget while at the same time satisfy your payments with the lender.


Today’s economy is facing challenges that include unemployment and not being able to find a job as well as other challenges such as unexpected bills like car repairs or medical bills.  All of these can be a reason why you are no longer making your payments timely and believe it or not many lenders will understand and will work with you.  The one thing that you need to remember is that you need to communicate with the lender in order to make both you and the lender happy.




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