Halting Federal Student Loan Wage Garnishment Due to Financial Hardship

You can stop a federal student loan wage garnishment due to financial hardship by contacting the Department of Education’s Default Resolution Group or the collection agency listed on your notice and requesting an administrative hearing.

This hearing lets you prove that the amount being taken leaves you unable to meet basic living expenses. It’s one of the few ways to stop an active garnishment without filing bankruptcy or completing loan rehabilitation.

Note: If your wages haven’t started being garnished yet and you only received a Notice of Intent to Garnish, consider loan rehabilitation or consolidation instead. Those options can prevent the garnishment altogether and bring your loans back into good standing.

Related: Student Loan Rehabilitation vs Consolidation

Under federal law (20 U.S.C. § 1095a and 34 C.F.R. § 34.9), you can challenge a federal wage garnishment if it causes financial hardship—meaning the deduction prevents you from meeting ordinary and necessary living expenses for yourself and your dependents.

To evaluate hardship, the hearing officer reviews your disposable income and essential expenses—housing, food, utilities, transportation, medical costs, and insurance. The government can’t take more than 15% of your disposable pay or reduce your income below 30 times the federal minimum wage of $7.25 an hour — about $217.50 per week.

If the evidence shows the garnishment leaves too little to cover these basics, the order can be reduced or suspended.

A financial hardship hearing gives you the chance to challenge how much the government is taking from your paycheck. When your federal loans go into default, the Department of Education can collect through Administrative Wage Garnishment (AWG)—a process that doesn’t require a court order. By law, it can take up to 15% of your disposable pay, but you have the right to show that doing so causes financial hardship.

Follow these steps to request a financial hardship hearing and challenge your federal wage garnishment:

1. Contact the agency handling your garnishment.

Check your Notice of Intent to Garnish or recent collection letter. It will list either the Department of Education’s Default Resolution Group (1-800-621-3115) or a specific collection agency. Call them to confirm where to send your request.

2. Complete the “Request for Hearing on Administrative Wage Garnishment” form.

You can download the official form directly from the U.S. Treasury: Download the Request for Hearing Form (PDF)

If you can’t access the form, you may write your own signed statement that clearly says you’re requesting a hearing because the garnishment causes financial hardship.

3. Submit your request within 15 business days.

You have 15 business days from the date on your notice to file the request and pause garnishment before it begins. If you miss that deadline, you’ll still get a hearing—but deductions can continue while your case is reviewed.

4. Gather your supporting documents.

Include proof of your income and necessary expenses:

• Last two pay stubs (within the past 90 days)

• Most recent federal tax return or IRS transcript

• Documentation of dependents and household income (e.g., child support, benefits)

• Receipts for rent, utilities, insurance, and out-of-pocket medical costs

5. Send your full packet to the address on your notice.

Mail, fax, or email your completed form and documentation to the address listed on your Notice of Intent to Garnish or the Department of Education’s Default Resolution Group. Keep a copy of everything you send.

6. Wait for confirmation and next steps.

You should receive written acknowledgment that your hearing request was received. If you filed on time, wage deductions will pause while your hearing is scheduled and reviewed. Most decisions are issued within about 60 days.

 

Once you request a hearing, you’ll be asked to submit documentation showing your income, household size, and necessary expenses. The hearing may be handled by phone, video, or through a written review. The officer will compare your disposable income against federal standards to decide whether the garnishment should continue, be reduced, or be suspended.

If the reviewer agrees that the garnishment makes it impossible to cover essentials like housing, food, transportation, or medical costs, they can order the deduction lowered or temporarily stopped. The decision doesn’t erase your default—it simply relieves the immediate pressure so you can work toward a permanent fix through rehabilitation or consolidation.

After you submit your hearing request and financial documents, most cases are reviewed and decided within about 60 days.

Here’s what happens to your paycheck while you wait:

• If you filed your request within 15 business days of the date on your Notice of Intent to Garnish, the government must pause wage deductions while your case is pending.

• If you filed after the 15-day window, your request will still be processed, but garnishment can continue until a decision is made.

• Once the review is complete, you’ll receive a written decision stating whether the garnishment will continue as is, be reduced to a lower percentage, or be suspended temporarily because of financial hardship.

The garnishment will continue until the debt is paid or another form of relief is approved. You still have options to stop or reduce the deduction:

• File for bankruptcy. This immediately stops wage garnishment through the court’s automatic stay, though it’s a serious step that should be discussed with an attorney.

• Enter loan rehabilitation. Garnishment continues at first but pauses after your fifth qualifying monthly payment under a rehabilitation agreement.

• Reapply for a new hardship hearing. You can request another review if your financial situation changes or new evidence supports your claim.

Consolidation won’t stop the garnishment because you can’t consolidate once a wage garnishment order has been sent to your employer.

If you believe your decision was based on incomplete or incorrect information, contact the Default Resolution Group (1-800-621-3115) to confirm whether you can submit updated documentation for reconsideration.