Student Loan Garnishment: How to Get Out of It [Federal & Private]

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Stanley Tate

#1 Student Loan Lawyer

Updated on December 13, 2022

Student loan wage garnishment can happen to you if you skip several monthly payments and don’t get a deferment, forbearance, or switch to an income-driven repayment plan.

Can student loans garnish wages? Absolutely. And they can do it without a court order if you default on federal student loans. On the other hand, private lenders such as Navient, Sallie Mae, and Sofi must first sue you and obtain a judgment before they can garnish your wages, take money from your bank account, or put a lien on your home.

Related: How to Stop Student Loan Garnishment

Ahead, learn when student loans can garnish your wages and how to stop garnishment before — or after — it starts.

Resources for defaulted student loan debt:

Some student loan garnishments are suspended until 2023

The White House has suspended administrative wage garnishments and other collection activities for defaulted federal student loans until six months after the pandemic payment pause ends. This means these garnishments will be on hold until late 2023 due to President Biden’s recent decision to extend the freeze on federal student loan payments until next summer. Garnishments for private loans can continue if the lender or debt collection agency sues the borrower and gets a judgment.

Related: How to Get Rid of a Student Loan Judgment

Can a private student loan company garnish wages?

Private student loan lenders like Navient, Sallie Mae, and SoFi can garnish borrowers’ wages — but not automatically. Before they can garnish your wages or take money from you and your bank account, they must take you to court and get a judgment, which isn’t always easy to do.

Related: Will SoFi Sue Me?

First, they have to find you or your cosigner to serve you with the lawsuit. That can be near impossible if you’ve left the country. Read more about how to escape student loan default.

Second, they have to prove that they own the loan, that you owe them money, and that the statute of limitations hasn’t run out. If they miss any of those things, the court can dismiss their lawsuit and leave them without a way to garnish your paycheck.

Related: Being Sued for Student Loan Debt? Do This

How long does it take for student loans to garnish wages?

The Education Department waits over a year after you miss your first monthly payment before it garnishes your wages. Federal student loans default after 270 straight days of missed payments. Once you default, your loan servicer will send your account to the Default Resolution Group, which will work with you to set up a new payment plan. If that fails, the DRG will send you a garnishment notice. If you don’t respond in 30 days, the federal government can garnish your wages a few months later. It can also take your tax refund and Social Security benefits.

The timeline to be garnished for private student loans is typically a lot longer. Many private lenders will typically wait a few years after your private student loans have been charged off before suing you in hopes of getting a court order to garnish your wages.

Related: Can Student Loans in Collections Be Forgiven?

How much can student loans garnish?

The Education Department can garnish up to 15% of your disposable pay. But more can be taken if you have multiple federal loans in default with different loan holders. This can happen if you went to school before 2010 and borrowed a combination of Direct Loans, FFEL Loans, and Perkins Loans. In that situation, it’s possible you could be in default with multiple lenders, each of whom can garnish your wages. Federal law caps total wage garnishment at 25% of your paycheck.

State laws limit the amount of money private lenders can garnish from borrowers’ wages. For example, in Missouri, private student loan lenders can garnish 10-15% of your disposable income, depending on whether you’re the head of the household. But in Texas, they aren’t allowed to garnish your wages for student loans. State law prohibits creditors from garnishing wages.*

Related: Can Student Loans Garnish Social Security?

* Texas residents can still have their wages garnished to pay federal student debt.

Who can garnish wages for student loans?

  • The U.S. Department of Education.

  • The Department of Justice — if they have a judgment for a defaulted federal student loan.

  • Nonprofit or state-owned guaranty agencies — e.g., ECMC and Trellis — that own privately-held federal student loans, e.g., Federal Family Education Loans.

  • Colleges and universities for Federal Perkins Loans.

  • Private lenders, loan holders, debt collection agencies, and law firms with a court order letting them garnish wages to recover defaulted private student loans.

How do I get my student loans out of garnishment?

You can get your student loans out of garnishment if you pay the balance in full, negotiate a settlement, or, for federal loans, enter into the loan rehabilitation program.

During the coronavirus pandemic, the Education Department paused wage garnishment for all defaulted loans. It also announced a plan to pull federal student loan borrowers out of default, remove the default status from their credit reports, and reinstate their eligibility for loan forgiveness programs and income-driven repayment plans.

To qualify, borrowers must contact the Default Resolution Group, answer questions about their income and family size, and establish a new student loan repayment agreement. Read more about the Fresh Start Student Loan Program.

Stopping a garnishment for private student loans is more complicated. You have to ask the company with the garnishment order to stop garnishing your wages or file bankruptcy. The problem with the first option is that the judgment holder will typically demand a large lump sum payment — usually for around half of the current loan balance — to release the garnishment.

Bankruptcy will temporarily stop the garnishment. It’ll continue after the case ends. To permanently stop the garnishment, you’ll need to file an adversary proceeding and ask the court to discharge your loans.

Will consolidating my student loans stop student loan garnishment?

No. Consolidating your student loans won’t stop a student loan garnishment once it’s started. The Education Department won’t let you consolidate student loans subject to an active garnishment. But it will let you consolidate student loans that were being garnished before the pandemic started. Visit the Federal Student Aid website,, to apply for a consolidation loan.

Learn More: How to Consolidate Defaulted Student Loans

How can I avoid student loan garnishment?

You can avoid student loan garnishment by making your monthly payments on time when you can and asking for a deferment, forbearance, or alternative repayment terms when you can’t. The federal government offers many flexible repayment options that make it fairly easy to avoid falling behind on payments — even when you’re dealing with extreme financial hardship like prolonged unemployment or crippling disabilities. Contact your student loan servicer to get more information about your options.

If you’re struggling to pay private loans, making your payments is challenging. Private lenders don’t offer the same payment protections that the federal government offers its borrowers. For example, they don’t offer plans that tie your payments to a part of your discretionary income. At best, they’ll lower your interest rate for a few months and let you make interest-only payments. But soon, their generosity will end, and they’ll demand you make the full monthly payment.

At that point, your options are limited to refinancing for a better interest rate and repayment terms, skipping payments hoping to negotiate a settlement, or filing bankruptcy to discharge your loans.

Related: Private Student Loan Help

Facing a student loan garnishment? I can help.

If you’re worried about wage garnishment, it’s critical to act now. I’ve helped hundreds of borrowers like you explore their repayment options and choose the best option to dig out of student loan default and return to good standing.

Schedule a call with me today. We’ll review all your options to prevent or end your student loan wage garnishment.

UP NEXT: How to Apply for Student Loan Forgiveness

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