If you've failed to repay a loan granted under the federal Student Loan Program, you might find your wages garnished to pay off this debt.
The following restrictions apply to student loan garnishments.
- No more than 10% of your disposable earnings can be withheld to satisfy an unpaid student loan, unless you agree in writing to a higher percentage.
- Your employer has to tell you about the garnishment at least 30 days before beginning to withhold your wages. You can use that time to work out a repayment schedule for the loan, so you can avoid having your earnings garnished.
- Your employer can't fire you or discriminate against you because of a student loan garnishment. If you are fired because of this garnishment, take your employer to court. The court may well order your employer to rehire you and to pay you the back wages you lost while you were out of work.
- Your student loan garnishments aren't considered to be more important than any other garnishments against your wages. Your employer won't rush to pay off your student loan before turning to other debts.
- Suppose you lose your job, but manage to find another job within a year. Your wages can't be garnished to pay off a student loan until you've been employed at that second job for at least 12 months.
- Any employer that doesn't obey a student loan garnishment order will have to pay whatever amount wasn't correctly withheld from the employee's wages. Such an employer will also be hit with fines and court fees.