Hardship Caused by Wage Garnishment

Federal law authorizes the Department or the student loan guarantor that holds a defaulted loan to collect the debt by non-judicial wage garnishment - a withholding order issued by the Department or the guarantor without the need for entry of a court judgment against the debtor. Prior to garnishment, the debtor must be offered an opportunity to repay the debt voluntarily or to obtain a hearing at which the debtor may object to garnishment either because the debtor believes that the debt is not owed, or that garnishment would cause financial hardship. To avoid garnishment, a debtor must object within the deadline explained in the notice - failure to do so will result in issuance of the garnishment order. A debtor who misses the deadline may obtain a hearing on a financial hardship objection, but withholding may start and continue through the hearing process. Hardship objections must be presented to the party - the Department or the guaranty agency - that sent the notice. If a debtor misses the deadline but requests a hearing, garnishment may start but cannot continue for more than 60 days from the hearing request date, unless a decision is issued that garnishment should continue.