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The federal government does not need a court order, a judge, or a lawsuit to seize 15% of your paycheck for student loans. They only need to send a single PDF to your employer’s payroll department.
Most borrowers assume that wage garnishment works like private debt collection: they expect a summons, a court date, and a chance to defend themselves before a judge. This assumption is false for federal student loans.
Under the Higher Education Act, the Department of Education utilizes a power called Administrative Wage Garnishment (AWG). This authority allows them to bypass the court system entirely.
The process is automated. Once your loan enters default (usually after 270 days of non-payment), the servicer triggers the AWG sequence. If you ignore the initial warnings, the next communication is not sent to you. It is sent to your Human Resources department, instructing them to divert 15% of your disposable pay directly to the Treasury.
The “30-Day Window” Rule
Before they contact your employer, federal law requires them to send you a “Notice of Intent to Garnish.” This is the most critical document you will ever receive regarding your student loans.
From the date on that letter, a 30-day countdown begins. Your rights change drastically depending on when you act.
- If you act within 30 days: You have the absolute right to a hearing before the garnishment starts. By law, the collection action must be paused until a decision is made. Your employer is never notified.
- If you act after 30 days: The garnishment order is sent to your job. You can still ask for a hearing, but the money will continue to be taken out of your check while you wait for the result.
The Tool: The “Request for Hearing”
You do not need a lawyer to stop the garnishment. You need to file a formal Request for Hearing.
This is not a negotiation phone call. It is a written legal demand. On the form included with your Notice of Intent, there is a section to request a hearing. You must check the box that says you want an “In-Person” or “Telephone” hearing (always choose Telephone or Written Records; they rarely do in-person anymore).
Filing this request triggers an automatic “Stay of Collection.” It forces the government to freeze the process while a hearing official reviews your case.
The Defense: “Financial Hardship”
The most successful argument for stopping a garnishment is Financial Hardship. The law states that the government cannot garnish your wages if doing so would leave you unable to meet basic living expenses.
To prove this, you must complete the Financial Disclosure Statement sent with your hearing request. You will list:
- Rent/Mortgage costs
- Utility bills (Heat, Water, Electricity)
- Food and medical expenses
- Other debt payments
If your expenses exceed your income minus the proposed 15% cut, the hearing official typically rules in your favor. The garnishment will be canceled or significantly reduced for a period of 12 months.
The “Rehabilitation” Option
If you cannot prove hardship, you have one final “Emergency Brake.” You can agree to enter the Loan Rehabilitation Program.
This is a one-time opportunity where you agree to make 9 reasonable monthly payments (as low as $5). Once you sign the rehabilitation agreement, the garnishment order is suspended. However, if you default again after using this option, you cannot use it a second time.
Private Loans: The Rule is Different
For private student loans (Navient, SoFi, Discover), the “Administrative” rule does not apply. As we detailed in our Zombie Debt warning, private lenders must sue you in civil court and win a judgment before they can touch your wages. If a private collector threatens to garnish your check without a lawsuit, they are violating federal law.
⚠️ Are They Taking Your Social Security Too?
If you are older or disabled, the government can seize your retirement benefits using a similar “Administrative” process. Learn how to stop the Treasury Offset Program (TOP).
Read Social Security Defense
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Note: Timelines for challenging wage garnishment are strict. If you have already received a notice, locate the “Deadline to Request Hearing” date immediately. Missing this date by 24 hours often waives your right to stop the order before it reaches your employer.
Sarah Johnson is an education policy researcher and student-aid specialist who writes clear, practical guides on financial assistance programs, grants, and career opportunities. She focuses on simplifying complex information for parents, students, and families.
