ECMC can garnish your wages. ECMC is allowed to garnish your wages after you default on federal student loans. They don't need to get a judgment/court order before they can garnish your wages. Once you default, federal law allows ECMC to send your employer an administrative wage garnishment (AWG) order (Order of Withholding from Earnings).
How much of your wages can ECMC garnish?
ECMC is allowed to garnish up to 15% of your disposable pay per pay period.
Your disposable pay is the pay that remains after lawful payroll deductions are withheld from your check.
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How to stop an ECMC wage garnishment?
You have 5 repayment plan options to stop a wage garnishment from ECMC:
- Pay the loan balance in full
- Negotiate a federal student loan settlement
- Enter into the loan rehabilitation program
- Apply for a Direct Consolidation Loan
- Set up a voluntary loan repayment plan
Student loan settlements with ECMC can be expensive. They typically will agree to waive collection fees. But they will demand at least 75% of the remaining loan balance payable in no more than 30 days.
Before the garnishment starts
You can stop the wage garnishment before it starts by entering into the loan rehabilitation program or applying for a Direct Consolidation Loan.
The loan rehabilitation program takes at least 9 months to complete.
The Direct Consolidation Loan takes about 2 to 3 months to complete.
For the most part, both options have the same effect on your credit score. The only difference is that the loan rehabilitation program will remove the default status from your credit report.
Click here to learn Should I Consolidate or Rehabilitate My Defaulted Student Loans?
After the garnishment starts
You can stop an ECMC wage garnishment by entering into the loan rehabilitation program.
This program requires you to make 9 monthly payments in 10 months. Your monthly payments are based on your income and expenses.
The wage garnishment will stop after you:
- return a completed Loan Rehabilitation Income and Expense Form
- sign the Loan Rehabilitation Agreement Letter and
- make 5 monthly payments on your defaulted loans.
Click here to learn How to Stop a Wage Garnishment After it Starts
ECMC student loans and the coronavirus
Due to the coronavirus pandemic, the federal government has prohibited ECMC from garnishing wages for student loans. The forbearance/deferment on collection activities will last through September 30, 2021.
In addition, Pres. Biden has directed the U.S. Department of Education and ECMC to refund student debtors for wages it garnished after March 2020.
ECMC can resume collection activities for defaulted student loans starting October 1, 2021.
How do I contact ECMC?
Here is ECMC's contact information:
Educational Credit Management Corporation
PO Box 16408
St Paul MN 55116-0408
Click here to schedule a free student loan consultation
ECMC student loan forgiveness programs
ECMC does not have student loan forgiveness programs. That said, the student loan debt it has for you are federal student loans. This means you can qualify for loan forgiveness. But you have to get out of default first.
After you get out of default, you may be eligible for:
- the Public Service Loan Forgiveness Program (PSLF)
- the Income-Driven Repayment Plan forgiveness options
- the Teacher Loan Forgiveness Program
Government and nonprofit employees
If your defaulted student loans are with ECMC, your loans are made under the FFEL Loan Program.
FFEL Loans don't qualify for the PSLF Program.
Only Direct Loans meet the Program's eligibility requirements for loan forgiveness.
So if you're a teacher, police officer, nonprofit employee, etc., you may need to consolidate your loans.
You can consolidate your federal student loan debt for free at studentaid.gov.
- List of PSLF Qualifying Employers
- Nonprofit Employee Student Loan Forgiveness
- 10-Year Student Loan Forgiveness
ECMC and student loan bankruptcy
Here are the steps to discharge ECMC student loans in bankruptcy:
- file a Chapter 7 or Chapter 13 bankruptcy case
- get a discharge order from the bankruptcy court
- file an adversary proceeding complaint (lawsuit)
In the adversary complaint, you'll need to argue that your student loans are causing you an undue hardship to the bankruptcy judge.
The Bankruptcy Code does not define undue hardship.
In the absence of a definition, most bankruptcy judges will apply the Brunner Test to analyze if you have an undue hardship.
Click here to read How to Discharge Student Loan Debt in Bankruptcy
The Brunner Test
The Brunner Test comes from a 1980s bankruptcy case, Brunner v. New York Higher Education.
The test asks three questions:
- Based on your current monthly income, can you maintain a minimal standard of living for you and your dependents while repaying your student loan debt?
- Is your financial situation likely to stay the same for a significant portion of the repayment period of the student loans?
- Have you made good faith efforts to repay your student loans?
Click here to learn How to File an Adversary Proceeding for Student Loans
What does ECMC stand for?
ECMC stands for Education Credit Management Corporation.
Is ECMC a collection agency?
ECMC is a debt collection agency. They use collection tactics to collect on defaulted federal student loans. They send negative information to your credit report, thereby destroying your credit score.
As debt collectors, they also have the power to garnish student debtors' wages and offset their tax refund.
Is ECMC a government agency?
ECMC is not a government agency. They are a nonprofit corporation headquartered in Minneapolis, Minnesota. They are a student loan guaranty agency that provides administration of the Federal Family Education Loan Program (FFELP). ECMC works to reduce borrowers' default rates by increasing financial literacy and advising of repayment options.
Is ECMC a legitimate company?
ECMC is a legitimate company. They provide third-party guarantor services. And they are the designated guarantor in California, Connecticut, Maine, Oregon, South Carolina, Tennessee, and Virginia.
ECMC also owns other affiliates:
- ECMC Education
- ECMC Foundation and
- ECMC Group
ECMC Education has postsecondary institutions in Atlanta, Houston, and Tampa Bay, operating under the brand name, Altierus.
ECMC Foundation invests in two focus areas: College Success and Career Readiness.
ECMC Group helps students succeed by providing financial education and other great benefits.
Is ECMC a federal student loan?
ECMC handles federal student loans. They handle defaulted federal loans made under the FFEL Program.
They do not handle private loans.
They do not handle education loans in good standing.
They work with federal loan servicers to help lower student loan default rates.
And they try to stop borrowers from discharging ECMC's loans in bankruptcy.
Is EMC federal or private?
Education Credit Management Corporation ECMC is a nonprofit corporation. ECMC is a guaranty agency of federal student loans made under the Federal Family Education Loan Program. It collects student loans that borrowers have defaulted on.
Is ECMC the same as Navient?
ECMC is not the same as Navient. ECMC and Navient are two different entities. ECMC is a nonprofit company that acts as a third-party guarantor for defaulted federal student loans. Their collection activities include:
- wage garnishment
- tax refund offset and
- Social Security benefit offset.
Navient Solutions is a student loan servicer for loans in good standing. Navient is a servicer for both federal student loans and private student loans.