Student loan wage garnishment and default
With no court order in place, Student loan wage garnishment may take up to 15% from your disposable pay when a federal loan is in default. Rehabilitation or consolidation is how you get out of default and stop the garnishment.
- 15%Disposable pay
- 270 dayswith no payments before default
- 90 dayslate before it's reported to credit bureaus
- 9payments needed to rehabilitate
How student loan default starts
Your servicer reports a delinquency to the credit bureaus once you're 90 days late. If a Direct or FFEL loan goes 270 days with no scheduled payments, it's in default. A loan that is in default and more than 360 days delinquent goes to the Default Resolution Group.
How much student loan wage garnishment can take
Without a court order, administrative wage garnishment can take as much as 15% of disposable pay. The money leaves your paycheck directly, and it keeps doing so until you act.
Student loan collections: your two ways out
Garnishment stops once you leave default.
| Way out | What you do |
|---|---|
| Rehabilitation | To rehabilitate, you make nine on-time monthly payments over 9 or 10 months in a row. Divide annual discretionary income by 12, then take 10% or 15% of that as the rehabilitation payment. |
| Consolidation | To consolidate a defaulted loan, either repay using an IDR plan or make three on-time payments first. |
In default, James owes $21,000 while earning $30,000. After he gets out of default, RAP would charge him about $50 each month. If he has 1 child, the bill falls to about $10.
How do you stop student loan wage garnishment?
Sign in at studentaid.gov to find out who holds your loan. Loans in default for a long time are held by the Default Resolution Group.
Request rehabilitation, or apply for consolidation.
Pay every agreed amount in full and on time.
After you leave default, pick an income-driven plan like RAP or IBR.
Guides on related topics
The questions people ask
How can I stop student loan wage garnishment?
Get yourself out of default. Rehabilitation and consolidation each get you out of default.
How much can they take from my paycheck?
As much as 15% of your disposable pay.
Who is in charge of student loans in default?
A defaulted loan that's more than 360 days delinquent gets assigned to the Default Resolution Group.
Sources: Federal Student Aid, getting out of default, Federal Student Aid, collections.