A Law Career

How To Challenge A Student Loan Wage Garnishment

by Ruby Mckinney

If you've been dealing with paying down your student loan, it can be a long road until it's paid off completely. In some cases, current and former students can have their loans deferred in order buy them some extra time. When your deferment period runs out or you stop making payments, you could face a possible wage garnishment. A garnishment can be detrimental to your take-home income and often will continue until your student loan is paid off. If you're facing a wage garnishment, there are a few situations where you may be able to challenge it.

Request A Hearing

If the amount of the proposed garnishment will pose a financial hardship to you, you're able to request a hearing to have it appealed. You can also ask for a hearing if you were fired from your place of employment and have only held your new job for less than a year.

Other situations where you can request a hearing is if your loan has been repaid or all debts forgiven and you do not owe any longer, and the payee is not aware that the loan is now paid in full. This often occurs due to computer or paperwork errors. If you already have a repayment agreement set up with your lender, you may also request a hearing to avoid wage garnishment.

Incorrect Garnishment Amount

A loan servicing company is only permitted to garnish fifteen percent or less of your wages in order to recoup what is owed. Since the rules are rather complex, some lenders may be taking more than they are supposed to or more than they are allowed. You must be able to take home enough money to be able to survive and have what is known as disposable income.

Check to ensure that the amount being garnished is no more than fifteen percent of your income. If it is, you should notify the lender and appeal to have the amount reduced. If you have a lower total take home income, you could also be exempt from garnishment. Part-time employees and those who make minimum wage are usually exempt from garnishment. 

Make Voluntary Payments

If you would rather make monthly payments to your student loan on your own, you should contact the loan servicing company immediately to make arrangements. As soon as those arrangements are approved, the garnishment should cease. This process can be very beneficial since you will have better control over how much money is going toward your loan and you can decide which due dates you prefer for payment.

There are also perks for your credit as well. Wage garnishments can hurt your credit score, but loan repayments will help keep your score higher. If you are facing a wage garnishment for a student loan, try these avenues to stop it and get your income back on track.