Student loan debt is a growing problem in the United States, with the average borrower owing over $30,000. While many borrowers are able to make their payments on time and eventually pay off their loans, others struggle to keep up with the payments. If you fall behind on your student loan payments, you may be at risk of having your wages garnished. In this article, we’ll take a closer look at the process of wage garnishment for student loans and what you can do to avoid it.
What is wage garnishment?
Wage garnishment is a legal process by which a portion of a person’s wages is withheld by their employer and paid to a creditor, such as a student loan lender. The amount that can be garnished varies by state, but typically it is limited to a certain percentage of the borrower’s disposable income.
How does wage garnishment for student loans work?
In order for a student loan lender to garnish your wages, they must first obtain a court order. This typically occurs after the borrower has defaulted on their loans and has not made any payments for 270 days. Once the court order is obtained, the lender will notify the borrower’s employer, who will then begin withholding a portion of the borrower’s wages each pay period. The amount that can be garnished is limited to 15% of the borrower’s disposable income, as per federal regulations.
How can I avoid wage garnishment for student loans?
The best way to avoid wage garnishment for student loans is to stay current on your payments. However, if you are already in default, there are a few options available to you. One option is to enter into a rehabilitation program, which allows you to make a series of smaller, more manageable payments over a period of time. Once you have made the required number of payments, your loan will be removed from default and wage garnishment will stop. Another option is to consolidate your loans, which can lower your monthly payments and help you get back on track.
What are my rights during wage garnishment?
Borrowers have certain rights when it comes to wage garnishment for student loans. For example, you have the right to be notified before wage garnishment begins, and you have the right to request a hearing to dispute the garnishment. Additionally, if you are facing financial hardship, you may be able to request a reduction in the amount that is being garnished.
Wage garnishment for student loans can be a difficult and stressful process, but it is important to understand that it can be avoided. By staying current on your payments and exploring options such as rehabilitation or consolidation, you can avoid wage garnishment and get back on track with your student loan payments. If you are already in default and facing wage garnishment, it is important to know your rights and to explore options for resolving the issue.
Conclusion
Student loan debt can be a heavy burden, but it is important to understand the consequences of defaulting on your loans, including wage garnishment. By staying current on your payments and exploring options such as rehabilitation or consolidation, you can avoid wage garnishment and get back on track with your student loan payments. If you are already in default and facing wage garnishment, it is important to know your rights and to explore options for resolving the issue.