2022 Update: In 2021, the Department of Education announced that all federal loan delinquencies for the loans it controls would be managed by the Default Resolution Group (DRG) instead of by various collection agencies. Read my article on DRG for up-to-date details on how to contact DRG and what to do if your federal loan is moved to collections. The information in this article may no longer be accurate.
Your ability to stop a student loan wage garnishment from Trellis Company depends on whether the garnishment order has been sent to your employer.
If the garnishment order has been sent to your employer, then the garnishment has started, whether or not your employer has started garnishing your wages.
Student loans with Trellis don't qualify for the covid-related CARES Act forbearance because the loans aren't owned directly by the federal government. Yes, the Trellis loans are federal student loans. But they're not directly by the government. The CARES Act only applies to loans owned directly by the federal government.
What is Trellis Company?
Trellis Company is a nonprofit agency that guarantees student loans made under the US Department of Education's Federal Family Education Loan Program.
As a student loan guarantor agency, Trellis insures your FFELP Loans in case you default.
When that happened, Trellis, as the guaranty agency, paid the lender that made your loan and took over collections. You now owe Trellis.
So is Trellis a legit company? Yes, Trellis Company is legit.
Trellis Company used to be Texas Guaranteed Student Loan Corporation.
How to stop a student loan garnishment from Trellis before it starts?
There are 5 ways to stop a student loan garnishment from Trellis before it starts:
- paying the loan balance in full
- negotiating a federal loan settlement
- applying for a Direct Consolidation loan
- entering into a loan rehabilitation agreement
- entering into a voluntary repayment agreement
For most student loan borrowers, the first two options are out of the question.
Under federal law, Trellis can garnish your wages without a court order. They can also offset your income tax refund and Social Security benefits without a court order. And they can do all 3 at the same time.
They simply don't have the money to pay either the balance or a settlement. Federal student loan settlements aren't cheap. The federal government typically won't accept less than 85% of the current loan amount.
Click here to read How to Settle Federal Student Loans For Less Than You Owe
Applying for a consolidation loan under the Direct Loan program in about 2 to 3 months. But the new loan will have the collection costs included in your new principal balance. As a result, you can end up owing much more in student loan debt than you originally borrowed.
Click here to learn How to consolidate government student loans that are in default?
The student loan rehabilitation program takes about 9 months to bring your defaulted student loans current. During those 9 months, you'll be making monthly payments to the collection agency based on either your:
- discretionary income
- disposable income or
- income and expenses.
At the end of the rehabilitation agreement, your FFEL Loan will be sent to a new loan servicer to set up a new repayment plan.
If this isn't your first-time defaulting on this student loan, then you may not be able to use the rehabilitation program a second time. You can't rehabilitate a student loan twice so you'll need to explore your other options.
Private student loans do not offer a loan rehabilitation program
The voluntary repayment agreement keeps your defaulted loans in a default status until you pay off your student debt.
The main benefit of this option is that it stops a garnishment order from being sent to your employer.
Typically, you would choose to make voluntary payments only if you've twice defaulted on the same loan and you can't rehabilitate or consolidate the loan.
Can you stop a garnishment from Trellis once it starts?
There are 3 ways to stop a student loan garnishment once it starts:
- entering into the loan rehabilitation program
- requesting a financial hardship review
- filing bankruptcy
The only option that stops the garnishment immediately is filing bankruptcy.
The loan rehabilitation program takes about 5 months to stop the garnishment and requesting a financial hardship review takes about 2 to 3 months.
How to get into the Loan Rehabilitation Program with Trellis?
Follow these 5 steps to stop a student loan wage garnishment after it starts with student loan rehabilitation:
- check studentaid.gov to make sure you don't have any other loans in default
- contact Trellis and ask them if you're eligible for the student loan rehabilitation program
- submit all necessary documents, including the loan rehabilitation agreement letter.
- follow up with Trellis to confirm all documents have been received and approved
- make sure all of your monthly payments for the full payment amount are made.
Click here to read Should I Sign the Loan Rehabilitation Agreement Letter?
To try and stop the student loan wage garnishment via extreme financial hardship, contact Trellis and ask to submit a hardship request. The form is not available online.
In my experience, a hardship request almost never ends with the wage garnishment being stopped.
More often, I see that the wage garnishment continues at the same amount or is lowered slightly.
Can the student loan delinquency be removed from my credit report?
Trellis will not agree to remove the late payments from your credit report.
They will, however, remove the default status from your credit report after you complete the loan rehabilitation program.
The difference in how your default status is treated for credit reporting is the main reason borrowers choose loan rehabilitation over consolidation.
In my experience, however, there's little difference between the two options when it comes to your credit score.
Whether you consolidate or rehabilitate, I think the net impact on your credit score is about the same.
You can contact Trellis Company M-Th 8am to 7pm CST and F 8am to 5pm CST at:
P.O. Box 659602
San Antonio TX 78265-9602
Phone Number: 800-222-6297
You can reach their corporate office at:
301 Sundance Parkway
Round Rock, TX 78681