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Haunting Student Loan Debts

Written by: Henry Byers

In today's ever changing economy, it's hard enough for the average working individual to make ends meet, without a wage garnishment, while supporting themselves or their families. Sometimes living pay check to pay check with the regular bills and sudden unexpected expenses is hard enough without having an old student loan debt rear its ugly head to bite you in the wallet. Borrowers who have not made voluntary and timely payments to the institution from which a loan was made, may face a wage garnishment through their current employer. Under the Higher Education Act, the Department of Education and security agencies can require employers to deduct a minimum of 10% of the indebted employee's pay check each pay period toward repayment of the debt. This wage garnishment may continue until the entire balance of the outstanding debt is paid. This method of wage garnishment is used only for the borrowers who refuse to voluntarily repay their defaulted loan and is not used with those borrowers who continue to make regular and timely payments.

Employers who have received an Order for Withholding of Wages must conform to the order by law. Employers will only receive information that is necessary to conform with the wage garnishing order and are prohibited to discharge the borrower from employment, or subject the individual to disciplinary action due to wage garnishment. Any individual who is discharged from their job or disciplined is allowed to seek restitution in federal or state court if such action occurs. Administrative Wage Garnishment is a tool of last resort used by the U.S. Department of Education to recover defaulted student loans through wage garnishment. Thirty days prior to the issuance of the Order of Withholding, a notice is sent to the borrower notifying that individual of the Department of Education's intent to garnish wages and of the borrower's rights and appeal procedures.

To avoid wage garnishments, the borrower has an opportunity to enter into a written agreement under terms agreeable to Department of Education to establish a voluntary repayment arrangement. If the borrower has any objections to the existence, amount, or enforce-ability of the debt, a hearing can be arranged to present and obtain a ruling; also of any objection that wage garnishment of the borrowers disposable pay would produce an extreme financial hardship. A wage garnishment action can be withheld by filing a timely request for a hearing. No action will be taken until the hearing is completed and a decision is issued.

Borrowers may also object to a wage garnishment if the validity of the claim is in question or if the current enforce-ability of the claim is barred by law. The borrower is responsible for providing documentation or evidence to corroborate any objections raised in defense to the enforcement of the debt. It would be in your best interest to learn all you can about garnishment law.

About the author:

Henry Byers, Retired IRS Manager and IRS Wage Garnishment expert - focusing on State Garnishment and Wage Garnishment

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