Ways & How

How to Stop Student Loan Wage Garnishment

How to Stop Student Loan Wage Garnishment

Student loans have enabled a lot of students able to finish their studies. However, after graduation, some students find it hard to pay the student loans that they have accumulated. Once a student defaults on a loan, wage garnishment can occur. Wage garnishment means that the party that owed the student loan gets paid a portion of the former student’s income directly from that person’s employer. The problem with wage garnishment is that some employers garnish up to 15 percent of the student’s current wages to pay off student loans. If you don’t want this to happen, here are the steps on how to stop student loan wage garnishment:

  1. You can request for a hearing once you receive a garnishment order. You have to do this within 30 days of getting the notification so that the garnishment does not process until you have finished your hearing. You can still request a hearing 30 days after the garnishment order, but in this case, the garnishment will not be delayed. It will only stop once you win the hearing. During the hearing, raise any defense that you may have regarding the payment of your student loan.

    you don’t have a defense, such as permanent disability, involuntary termination from a previous job, or bankruptcy, then you still get a chance to negotiate a new payment plan with the student loan collector.

  2. Try to postpone student loan payments. In some cases, you can defer your loans, meaning you are granted a temporary break from your payments. You can qualify for loan deferment if you are currently unemployed and seeking employment, on active military duty, or serving in the Peace Corps. Your lender might also agree with a forbearance, which is the same as deferment, except that you still accrue interest with a forbearance.

  3. Take advantage of student loan repayment plans. You can choose from several flexible payment plans for federal student loans, such as those that allow you to pay your loans for an extended period of time of up to 25 years. There are also plans that allow you to start with low payments and then increase over time. This is especially helpful if you are still starting a new job, and you are expecting get a pay increase in the near future.

  4. Consolidate student loans. If you have several student loans, then consolidating all your student loans into one loan might be beneficial for you. Through this, you can get out of defaulting and even lower the interest rate of your loans.

  5. File Chapter 13 bankruptcy. If you file for Chapter 13 bankruptcy, you get the chance to repay your student loan through the Chapter 13 repayment plan. As soon as you file for bankruptcy, your wage garnishment will automatically stop. This will be the case as long as you adhere to the new repayment plan. However, do not count on using Chapter 7 bankruptcy to pay your student loans and stop wage garnishment, as you need to meet a “hardship” standard that is rarely granted to applicants.

Knowing how to stop student loan wage garnishment will work to your advantage if you are having a hard time paying off all your student loans.


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