Can National Collegiate Student Loan Trust Garnish Your Wages?

Facing wage garnishment is stressful enough, but confusion around when and how National Collegiate Student Loan Trust (NCSLT) can actually garnish wages makes matters worse.

Let’s get clear: NCSLT can’t garnish your paycheck simply because you defaulted on a loan.

Before your wages can be garnished, they must first sue you and win a court judgment. Until that happens, garnishment isn’t legally allowed.

National Collegiate Student Loan Trust isn’t like the federal government. They can’t automatically withhold money from your paycheck when you miss payments. Instead, as a private student loan creditor, NCSLT must follow a strict legal process:

1. File a lawsuit against you for the unpaid debt.

2. Serve you with court papers, notifying you officially about the lawsuit.

3. Win a court judgment, proving in court that you owe the debt.

4. Secure a garnishment order from the judge allowing them to take money directly from your wages.

Only after completing these steps can NCSLT legally require your employer to start withholding a portion of your paycheck to repay your loan. Without a judgment from the court, no garnishment can happen. No exceptions.

Your exposure to wage garnishment from National Collegiate Student Loan Trust depends entirely on your state’s garnishment laws, not federal guidelines.

Here’s how it breaks down:

1. States That Completely Prohibit Garnishment for NCSLT Debts

If you live in these states, NCSLT cannot garnish your wages, even with a court judgment:

• Texas

• Pennsylvania

• South Carolina

• North Carolina

These states specifically block creditors like NCSLT from garnishing wages for private debts.

2. Most Other States Allow Up to 25% Garnishment

The majority of states let creditors garnish up to 25% of your disposable income after a judgment, consistent with federal law. Some states set even lower limits (e.g., New York and Illinois cap garnishment at around 10–15%), while others have unique rules (like California allowing garnishment of a spouse’s wages).

If you want exact numbers for your state, check your state’s garnishment guidelines or consult a local attorney.

If National Collegiate Student Loan Trust is threatening garnishment or has already secured a judgment against you, you still have options:

• Negotiate a payment plan or settlement. Creditors usually prefer immediate payment to a long, uncertain garnishment process. Negotiating Federal Student Loan Settlements: How It’s Done

• Fight the lawsuit if NCSLT hasn’t yet won a judgment. Many borrowers succeed by challenging documentation or procedural mistakes made by the Trust. (Link out to your guide on defending NCSLT lawsuits.)

• Consider bankruptcy as a strategy to halt garnishment immediately and potentially eliminate the debt altogether. Student Loan Bankruptcy: Can You File and What Happens Next?

The threat of wage garnishment from National Collegiate Student Loan Trust is serious, but manageable. Remember, NCSLT can’t garnish wages without first winning a lawsuit, and even then, your state’s laws control how much they can take, if anything at all.

Acting proactively gives you the best chance at avoiding garnishment entirely. Whether it’s negotiating directly, challenging the lawsuit, or exploring bankruptcy options, the sooner you act, the better your outcomes can be.

Need expert help quickly? Schedule a call with a student loan expert today.

We’ll assess your situation, answer your questions clearly, and help you build a practical strategy tailored to protect your paycheck.