Student loan wage garnishment is a serious issue for borrowers who default on their payments. Knowing the rules and knowing how to prevent or stop garnishment can help you avoid financial stress. In 2025, the government can garnish wages for federal student loans without a court order, while private lenders must obtain legal approval before doing so.
Process
When you default on a student loan, either the government or a private lender can take a portion of your income to repay the debt. For federal loans, this can happen after 270 days of missed payments, with up to 15% of your disposable income being deducted automatically. Even Social Security benefits can be garnished for federal student loan debt.
Private lenders, however, need to take legal action first. If they win a court judgment, they can garnish up to 25% of your disposable income, depending on state laws.
Solutions
If your wages are being garnished, there are several ways to stop it:
- Pay in Full: If possible, paying off the loan completely will immediately end garnishment.
- Negotiate a Repayment Plan: Federal borrowers can work with the U.S. Department of Education or a collection agency, while private lenders may agree to a new payment arrangement.
- Request a Hearing: If you believe the garnishment is unfair, you can challenge it through a hearing, potentially reducing or delaying payments.
- Loan Rehabilitation: Federal borrowers can make nine on-time payments under a rehabilitation plan to remove the default status and stop garnishment.
Prevention
Avoiding default is the best way to prevent wage garnishment. Consider these options:
- Deferment or Forbearance: If you’re facing financial hardship, you may be able to pause payments temporarily.
- Repayment Plan Adjustments: Income-driven repayment plans or longer-term plans can lower your monthly payment.
- Refinancing: If you have private loans, refinancing could reduce interest rates and make payments more manageable.
Staying proactive with your student loans can help you protect your paycheck and maintain financial stability in 2025 and beyond.
FAQs
When can federal student loans be garnished?
After 270 days of missed payments, without a court order.
Do private lenders need a court order to garnish wages?
Yes, they must obtain a court judgment first.
How much of my wages can be garnished?
Up to 15% for federal loans and up to 25% for private loans.
Can I stop wage garnishment?
Yes, by paying in full, negotiating, or rehabilitating the loan.
How can I prevent student loan default?
Use deferment, income-driven plans, or refinancing options.
