What Is Student Loan Garnishment

Q: What is student loan garnishment, and should I worry about it if my student loans are going into default because I cannot afford them?

What Is Student Loan Wage Garnishment?

Student loan garnishment is when money is taken directly out of your paycheck to repay defaulted federal student loans. Instead of waiting for you to make a payment, the government or its collection agency arranges for your employer to withhold part of your pay and send it toward your loan balance.

For federal student loans, this is called administrative wage garnishment, and the government does not need a court order to start it.

• Up to 15% of your disposable pay (what’s left after mandatory deductions like taxes) can be garnished.
• They must leave you with at least the equivalent of 30 times the federal minimum wage per week.

CollegeWhale Tip: Wage garnishment is a “last resort” collection tool. The more proactive you are before default, the easier it is to avoid.

When Does Student Loan Garnishment Start?

Garnishment doesn’t happen overnight. First, your loans must go into default, which generally means you’ve gone about 270 days (nine months) without making required payments on your federal loans.

Before any money is taken from your paycheck, you should receive a written notice of garnishment. This notice will tell you:

For payoff strategies and ways to manage balances over time, take a look at our comprehensive section on Student Loan Debt.

• How much you owe (often including added interest and collection fees)
• How much will be taken from each paycheck
• Your right to request a hearing and the deadline to do so

If you do nothing after receiving this notice, garnishment can move forward automatically.

CollegeWhale Tip: Don’t ignore the garnishment notice. It is usually your last opportunity to stop or reduce the garnishment before it starts.

Why Default and Garnishment Are a Big Deal

Garnishment is only one of several serious consequences of student loan default. Once your federal loans are in default, some or all of the following may happen:

• Credit Damage: Default is reported to credit bureaus and can significantly lower your credit score.
• Tax Refund Offsets: Your federal (and sometimes state) tax refunds can be seized and applied to your loan.
• Collection Fees: Additional costs can be added to your balance, making the loan more expensive over time.
• Loss of Federal Benefits: You may lose eligibility for new federal student aid and certain federal programs until you resolve the default.

The longer a loan remains in default, the more difficult and expensive it becomes to fix. The good news is that you have options to avoid garnishment—or to recover if it has already started.

How to Avoid Student Loan Garnishment

1. Contact Your Loan Servicer Before Default

If you know you can’t afford your payments, the most important step is to reach out before you stop paying. For federal loans, your servicer may help you:

• Switch to an income-driven repayment (IDR) plan, such as the SAVE Plan, which can lower your monthly payment based on income and family size.
• Request a temporary deferment or forbearance if you qualify for short-term relief.

CollegeWhale Tip: Most federal borrowers have access to IDR plans with payments tailored to income. If your payment feels unmanageable, you may simply be in the wrong plan.

2. Respond to Default and Garnishment Notices

If you’ve already fallen behind and are getting collection notices or a proposed garnishment letter, act quickly:

• Read the notice carefully to understand how much they plan to garnish.
• Note the deadline to request a hearing.
• Submit your hearing request on time if you believe the amount is wrong or garnishment would cause extreme hardship.

At a hearing, you may present documentation of your income, expenses, and dependents to argue for a lower amount or to stop garnishment entirely.

3. Consider Loan Rehabilitation

Loan rehabilitation is a one-time chance to bring a defaulted federal loan back into good standing. Typically, you must:

• Agree to make 9 on-time, reasonable monthly payments within a 10-month period.
• Work with your loan holder to determine a payment amount based on your income.

After successful rehabilitation:

• Your loan is removed from default.
• The default status is removed from your credit report (though late payments may remain).
• Wage garnishment should stop.

CollegeWhale Tip: Rehabilitation is often the best long-term option if you want to stop garnishment and repair your credit, but it requires consistent payments.

4. Look at Consolidation as an Alternative

If rehabilitation payments are unaffordable or you want a faster resolution, you can apply for a Direct Consolidation Loan to pay off defaulted federal loans.

To consolidate a defaulted loan, you must usually either:

• Agree to repay the new consolidation loan under an income-driven repayment plan; or
• Make a few voluntary payments beforehand (depending on your situation).

Consolidation can:

• Stop garnishment once complete
• Combine multiple defaulted loans into one new loan
• Give you access to IDR plans and certain forgiveness options

However, consolidation does not remove the record of default from your credit report, and it may extend your repayment timeline.

CollegeWhale Tip: If credit repair is a priority, rehabilitation may be better; if speed and simplicity matter more, consolidation can be appealing.

What If Garnishment Has Already Started?

If your wages are already being garnished, you still have options:

• Contact the collection agency or loan holder to discuss rehabilitation or consolidation.
• Ask whether garnishment can be reduced or stopped if you enter into a voluntary repayment agreement.
• Request a hearing if you believe the garnishment is incorrect or causing extreme financial hardship (even if you missed the initial deadline, it may still be worth asking).

Taking action can help you move from forced collections (garnishment) back into a more manageable and flexible repayment arrangement.

Should You Be Worried About Garnishment?

If you’re already in default or quickly heading that way and you ignore notices, then yes—wage garnishment is a real possibility. But if you’re willing to communicate, explore repayment options, and take action, you have several tools to avoid it:

• Lower payments through income-driven repayment
• Temporary relief through deferment or forbearance
• Default resolution through rehabilitation or consolidation

Garnishment is serious, but it’s not the “end of the road.” The sooner you respond and use the programs that exist to help borrowers in hardship, the more control you’ll have over your paycheck, your credit, and your long-term financial health.

CollegeWhale Tip: Don’t wait until money is already coming out of your paycheck. If payments feel impossible today, that’s the moment to reach out—not six months from now.