How to Stop Student Loan Wage Garnishment

• You can stop federal student loan garnishment before or after it starts—but the options change depending on when you act.

• If your wages are already being garnished, you’ll need to consolidate, rehabilitate, or request a hardship hearing.

• The government can take up to 15% of your take-home pay without going to court. It won’t stop unless you make it stop.

Wage garnishment for defaulted student loans is returning, says the Education Department.

Here’s what you need to know:

• Your wages can be garnished if you’re in default on federal student loans.

• This means the federal government can take money from your paycheck if you’ve missed 9 straight monthly payments.

This announcement does not mean the Education Department can garnish your wages if your loans are in deferment, forbearance, or on hold due to the SAVE Plan litigation.

The way to stop student loan wage garnishment changes depending on whether the garnishment has not yet started or has already started.

Ahead, we’ll cover both options.

We’ll walk you through:

• How to stop student loan garnishment before and after it starts

• How to choose the best option to stop wage garnishment

• What to do if you’re facing hardship

• How to avoid future garnishment once you’re out

To stop student loan garnishment before it starts, you need to get your loans out of default.

There are only three ways to do that:

• Pay in full or negotiate a settlement

• Use loan rehabilitation

• Use consolidation

Regardless of which one you choose, the process starts the same way.

Step 1: Call the Default Resolution Group

This is the federal agency that handles collections. They’ll confirm your default status, walk you through your options, and connect you to the right loan servicer or collector. You can reach DRG at (1-800-621-3115).

Step 2: Choose Your Path Out of Default

• Consolidation: Apply for a Direct Consolidation Loan and choose an income-driven repayment plan. This can stop garnishment quicklyif it hasn’t already started taking money from your check.

• Rehabilitation: Agree to make 5 monthly payments based on your income. After the fifth, garnishment will stop.

• Settlement or Full Payoff: Less common. You pay the loan off or negotiate a lump-sum deal. Garnishment ends once the loan is cleared.

If money is already coming out of your paycheck, rehabilitation is usually the only option that will stop it once it’s active.

Step 3: Send In Your Paperwork

You’ll need:

• Proof of income (recent pay stubs or tax returns)

• Photo ID and contact information

• Any documentation of hardship, if you’re filing a challenge

Keep copies of everything. You may need them later if there’s a delay or dispute.

Step 4: Follow Up Weekly

Call your loan servicer or the collection agency every week until you confirm the garnishment is paused or removed. Ask for written confirmation and keep track of names and dates.

If you’re already seeing smaller paychecks, the garnishment has begun, and that changes what you can do.

At this point, you’re no longer trying to prevent student loan garnishment. You’re trying to get out of it.

Unfortunately, once the garnishment starts, student loan consolidation is off the table. Federal rules don’t allow you to consolidate a loan that has an active wage garnishment order.

Similarly, if you’re already being garnished, you likely can’t afford to settle your loans. The federal government doesn’t offer steep discounts for federal student loan settlements. They typically want a lump-sum payment of at least 85–90% of the balance. And they want it within three months.

The only remaining options are loan rehabilitation, student loan bankruptcy, and hardship.

Loan Rehabilitation

For most borrowers, rehabilitation is the best way to stop the wage garnishment without hurting your credit score. But you must make 5 consecutive monthly payments on top of the garnishment, i.e., make the monthly payments while your wages are being garnished.

After the fifth payment, the government is required to remove the wage garnishment, and your loan is pulled out of default. Check out our guide on loan rehabilitation…

Bankruptcy

If you can’t afford to do that, then bankruptcy can help stop the garnishment immediately. But then you’ll need to look to file student loan bankruptcy to deal with a defaulted loan and maybe even get rid of the loan altogether.

This is how you get back into good standing and unlock access to repayment plans, loan forgiveness programs, and additional federal aid.

Financial Hardship

The government can also choose to stop the wage garnishment if you have a financial hardship. But there’s a catch: You must request the hardship hearing within 30 days from the date on your garnishment notice.

Here’s how to do it:

• Send a written request for a hearing to the agency listed on your notice

• Include documentation of your income and expenses: paystubs, rent or mortgage statements, utility and medical bills, child care costs, etc.

• Explain how garnishment is making it impossible to meet basic living needs. Be specific and back it up with evidence.

Once submitted, you’ll be scheduled for a phone hearing. A hearing officer will review your case and decide whether to pause, lower, or continue the garnishment.

This is not a guaranteed win, but a successful hardship appeal can delay or stop wage garnishment for student loan debt temporarily.

Federal student loan garnishment allows the government to take up to 15% of your disposable income. This means your take-home pay after taxes and required deductions.

Note:

• Garnishment applies regardless of your job or employer. Changing jobs won’t help.

• They can’t take more than 30 times the federal minimum wage per week (currently $7.25/hour).

• Garnishment stacks with other federal offsets (like tax refund seizure). In some cases, inheritance money may also be garnished, and certain types of SSI benefits could be at risk.

Even once you start the process, wage garnishment won’t stop overnight. Whether you’re pursuing rehabilitation or filing a hardship challenge, here’s what you need to know:

• Garnishment continues until approval. Starting rehabilitation? You’ll need to make five months of student loan payments in addition to what’s being garnished before the wage withholding ends. Filing a hardship challenge? Garnishment won’t pause unless and until your hearing officer approves relief.

• You won’t get garnished wages refunded. Even if your challenge or rehab succeeds, you won’t get back any money already taken from your paycheck. That’s why speed matters.

• Plan for at least 5–6 weeks of reduced pay. Even in the best case, expect garnishment to continue for a month or more after you take action.

No, private lenders can’t garnish wages automatically. They must:

1. File a lawsuit in state court

2. Win a judgment

3. Obtain a wage garnishment order through that court

This process depends on your state, but once a judgment is entered, companies like Sallie Mae or Navient can move forward with garnishment.

To learn more about how it works with specific lenders, check out our guides on how Sallie Mae handles wage garnishment and how Navient pursues garnishment after default.

Laws also vary by state. For example, Texas has specific protections against student loan wage garnishment, but that doesn’t prevent lawsuits or other aggressive collection efforts.

If you’ve received a court summons or judgment, don’t ignore it. Get legal help right away. You may still be able to stop garnishment or negotiate a better deal before it begins.

Federal student loan wage garnishment hits hard, but it’s not permanent.

You can stop it through:

• Loan rehabilitation (5 income-based payments)

• Consolidation (into a new Direct Loan)

• A hardship hearing (within 30 days of notice)

Each option has pros and cons, but the worst thing to do is wait. The sooner you act, the easier it is to stop the garnishment and regain control.

Not sure what applies to your situation?

Book a call with our student loan expert. We’ll help you review your federal or private loans, explain your options, and guide you through the process, step by step.

Related Readings:

• How to Get Student Loan Out of Default Fast

• How to Stop Student Loans from Taking Taxes

• Can Student Loans Garnish Your Bank Account