An Important Right in Student Loan Administrative Wage Garnishment
Updated: Nov 30, 2019
As some of you may be aware, government-backed student loan lenders do not need to sue you and obtain a judgment against you prior to garnishing your wages. They can simply send a garnishment order to your employer and they will begin garnishing a maximum of 15 percent of your disposable pay each pay period. This can certainly hurt. Many folks are caught by surprise and do not learn of the effort to garnish until they look at their pay statement or direct deposit and notice the money missing. While with garnishment by other lenders, let’s say a credit card lender, a debtor may be able to claim the “head of household” exemption, this exemption does not apply with government-backed student loan garnishment. This is because the head of household exemption is provided by state law, and state law is trumped by the federal regulations on student loans. So the next question is, do consumers have any protections at all against this student loan administrative wage garnishment? Yes, you do. One important protection, intended to protect those trying to get back on their feet financially, is a provision of the Higher Education Act that prohibits administrative wage garnishment against an individual who was involuntarily released by their last employer and has been working in their new job for less than 12 months. If you fall into this category, administrative wage garnishment is prohibited by federal law, specifically 20 U.S.C. Section 1095(a)(7). If you fall into this category and find yourself subject to an administrative wage garnishment, under the same statute you have the right to a hearing to make your argument that the garnishment should be dissolved until the expiration of the 12 months of your new employment. There are other rights consumers have as well in this area, which I will blog about in future blog posts. Best, Ryan C. Torrens, Esq.