What to Do if You're Subject to Wage Garnishment for Student Loan Debt

In 2020, the federal government paused collections efforts on defaulted federal student loans, part of pandemic relief efforts. While Congress said payments would start again in 2023, the pause remained in effect. This pause has now ended. 

The Trump Administration announced on April 21, 2025, that the Department of Education would start trying to collect on unpaid debt on May 5. Unfortunately for the approximately 5 million borrowers currently in default, the government has many powers to collect money that private debt collectors don't.

Wage garnishment is one of those powers. Your loan servicer can order your employer to withhold up to 15% of your pay after mandatory deductions like Social Security. The servicer doesn’t need a court order to do this, but you’re entitled to 30 days' notice before garnishment starts. 

You don't have to just let this garnishment happen. If you're in default and want to know about debt relief, you’ve got options. Getting out of default is one strategy. Negotiating a payment plan is another.  

Here's what you can do if you're in default and at risk of wage garnishment.

What Is Wage Garnishment, and How Does it Work?

Wage garnishment happens when your employer is ordered to withhold part of your paycheck. In the case of federal student loans, your loan servicer can order your employer to withhold up to 15% of your disposable pay. 

Your loan servicer doesn't have to go to court to get a garnishment order. It's different from when a private lender wants the court to take money from your bank account or paycheck. 

However, your servicer does need to do certain things. You're entitled to 30 days' notice, for example. The notice must explain your rights to challenge the garnishment order or explore alternatives. 

If you’re in default on your federal student loans, you’re now at risk for garnishment. If you aren't sure if you're in default, visit StudentAid.gov and log into your account. Your dashboard will show the amount you owe and your loan status. If it says "default," you risk having wages withheld. You should also see a warning at the top of the page. 

What if Your Wages Are Garnished?

If the Department of Education garnishes your wages, you do have a few alternatives, including getting out of default. You could also explore other ways to avoid having your pay withheld.

Getting out of default

There are three ways to get out of default:

• Pay your loan balance in full. This is rarely practical—most people don't have the ready cash to pay off their loans. 

• Loan rehabilitation. To rehabilitate your loan, or bring it back into good standing, you must agree in writing to make nine voluntary payments within 20 days of your due date. Your loan servicer will set reasonable and affordable payments. You must make all nine promised payments over 10 months.  

• Loan consolidation. You can get out of default if you consolidate a defaulted federal loan into a new Direct Consolidation Loan. You must agree to repay the Direct Consolidation Loan under an income-driven plan. Or, you must make three consecutive voluntary, on-time, full monthly payments on the defaulted loan before you consolidate. 

If you have already defaulted on a Direct Consolidation Loan, you can consolidate it again if you have at least one other eligible loan to consolidate with the defaulted one. 

Both loan rehabilitation and loan consolidation are usually good options. Remember that Direct Consolidation Loans are a special kind of consolidation loan. They are only available through the Department of Education. 

Direct Consolidation loans are not the same as a debt consolidation loan from a private lender. Borrowing from a private lender isn't always a good strategy for getting out of default. You may not qualify if you're in default. You'd also lose federal borrower benefits.

Other ways to avoid withholding

There are also other ways to avoid wage garnishment without getting out of default. You could:

• Negotiate your loan repayment. If you come to a voluntary agreement to pay your debt, you could avoid wage garnishment. You must get the lender to agree to the terms. You also must make your first payment no later than 30 days from the date you got the notice of garnishment. 

• Request a hearing. You can request a hearing to question if the debt is valid. You can also request a hearing to object to garnishment because it would cause extreme financial hardship. Finally, you could argue garnishment can't be used because you've been working for your employer for less than 12 months after you were involuntarily separated from a previous job.

If you're hoping to avoid garnishment through a hearing, you must make your request in writing. You must postmark it no more than 30 days from getting your notice of default. You also need proof of your objections, or proof of extreme financial hardship or a short employment history. 

Avoid Wage Garnishment

If you’re at risk of garnishment, explore ways to avoid it ASAP. Here are some strategies to consider. 

Sign up for income-driven payment plans 

Income-driven repayment (IDR) plans that cap your monthly payments at a percentage of your income are available for federal student loans. Some income-driven plan options are on hold for now. You can still sign up for a plan, though. In some cases, an IDR could reduce your payment to $0 per month.

Contact your loan servicer to find out about income-driven plans. You can also apply online. 

Put your loans into deferment or forbearance 

You could pause payments by putting your loans into deferment or forbearance to avoid default. Deferment allows you to avoid interest on Direct Subsidized Loans during the deferment. Interest is charged on all loans during forbearance. 

Under some circumstances, your loan servicer must allow you to pause payments using one of these two methods. In other situations, your loan servicer might or might not allow you to do so. Contact your loan servicer to find out whether you’re eligible. 

Settle other debts 

If you have other debt aside from your student loans, debt settlement could give you more wiggle room to pay your student loans. When you settle debt, your lender agrees to accept less than the full amount you owe, but consider it payment in full. Getting rid of debt could provide the financial relief you need. 

You can negotiate with your creditors yourself, or a debt settlement company can negotiate on your behalf. Learn how Freedom Debt Relief works to see if this strategy is right for you.  

Consider bankruptcy 

Student loans usually can't be discharged in bankruptcy. However, eliminating other debt through a bankruptcy filing could free up the money you need to pay your student loans and avoid garnishment.

Whichever approach you take, the key is to act quickly. You should have a plan in place if you're in default and risk the government taking some of your money that you work hard to earn.