Mo’ Money Monday: Protect Your Check From Student‑Loan Garnishment
Mo’ Money Monday: Protect Your Check From Student‑Loan Garnishment
More than two million federal student‑loan borrowers could see money taken from their paychecks as early as this summer.
Why wage garnishment is back on the table:
Roughly six million borrowers are now 90‑plus days late, and about one‑third of them (nearly 2 million people) could slip into default in July, triggering collections.
Once a loan is in default (270 days overdue), the Education Department can seize up to 15 percent of your disposable pay, intercept tax refunds, and even reduce Social Security benefits.
The Treasury Offset Program restarted in May, and Administrative Wage Garnishment is scheduled to follow later this summer.
| Action | What it does | Where to start |
|---|---|---|
| Call your loan servicer (or the Default Resolution Group at 1‑800‑621‑3115) | Opens the door to pause collections and set up a plan before garnishment begins. | Log in at StudentAid.gov and check your servicer’s phone number. |
| Enroll in an Income‑Driven Repayment plan (SAVE, IBR, PAYE, ICR) | Caps your monthly bill at 5‑20 % of discretionary income and can pull you out of delinquency. | “Loan Simulator” tool on StudentAid.gov helps pick the best plan. |
| Consolidate or rehabilitate defaulted loans | Either option will remove the default status and stop garnishment notices after a few on‑time payments. | See the “Getting Out of Default” page at StudentAid.gov. |
| Ask about Fresh Start benefits | The formal Fresh Start window closed in late 2024, but servicers can still review hardship requests and alternative resolutions. | Mention “Fresh Start” when you call. |
| Get free nonprofit counseling | A neutral counselor can negotiate with servicers and build a budget. | National Foundation for Credit Counseling (NFCC.org) or Student Borrower Protection Center (protectborrowers.org). |
| Know state protections | NC, SC, TX and PA limit most private garnishments, but federal student‑loan garnishment still applies. | Your state attorney‑general’s consumer office. |
Ignoring those late‑payment notices could cost you a chunk of every paycheck for years. A five‑minute call or an online IDR application today can freeze collections before they start