Administrative Wage Garnishments Temporarily Paused
Due to the COVID-19 payment pause, most collections on federal student loan debt, including most wage garnishments. The payment pause is ending at the end of August 2023, but the Department of Education has stated that collections on loans that are eligible for the new Fresh Start program will continue to be paused during the Fresh Start period. The Fresh Start period will run until one year after the payment pause ends. See our page on Fresh Start for more information about signing up for this time-limited program.
If you have defaulted on your federal student loans, your loan holder can tell your employer to withhold up to 15% of your wages to collect your student loan debt without taking you to court. This is called an administrative wage garnishment. The garnishment continues until your defaulted loan is paid in full or you are removed from default. Your employer cannot fire you for having your wages garnished by the government to pay back your student loan debt. You will get a letter before your wages are taken giving you information about requesting a hearing or review to try to stop the wage garnishment.
Make sure your contact information is updated with the Department of Education and your loan servicer. Many people who don’t get notice that their tax refunds have been taken have moved and failed to let the government know their new address. Don’t miss out on important updates. Call your loan servicer or log in to your studentaid.gov account to update your contact information.
Can I stop the government from taking my wages?
If you get a letter from the federal government letting you know that your wages will be garnished to pay back your student loan debt, don’t ignore it. You can take steps to try to stop the wage garnishment by requesting a review.
To request a review, contact your loan servicer. If you do not know who your loan servicer is, you can also contact the Department of Education Default Resolution Group. You can call the Default Resolution Group at 1-800-621-3115. You can find more information and set up an account with the Default Resolution Group to manage your requests online at myeddebt.ed.gov.
What will the government consider when reviewing my request to stop the wage garnishment?
The government will usually consider whether or not you have any defenses to paying back your student loan debt.
Some of the main defenses include:
- you already repaid the loan,
- it is not your loan or there is some other reason why you do not owe the money,
- you have already entered into a repayment agreement with the loan holder and are making payments as required,
- you have filed for bankruptcy and the case is still open or the loan was discharged in bankruptcy,
- your school lied to you about the program or the loans you were taking out,
- the school failed to pay you a refund after you withdrew from classes,
- you are totally and permanently disabled,
- the loan is not enforceable, for example because of forgery or other reason, or
- you are eligible for a closed school discharge.
Will the government stop a wage garnishment because of my financial hardship?
In some cases, the government will stop a wage garnishment due to your financial hardship, but you usually have to be facing a significant and urgent hardship, such as an eviction, foreclosure, or utility shut off, in order to stop it.
For more information on collection of federal student loan debt, visit the Federal Student Aid website page on collections.