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Administrative Wage Garnishment on Federal Loans

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What is administrative wage garnishment?

Administrative Wage Garnishment (AWG) is the federal government’s power to collect defaulted student loans directly from your paycheck — without suing you first. The Department of Education, through its contracted agencies, can instruct your employer to withhold up to fifteen percent of your disposable income every pay period. It’s one of the strongest tools in the government’s collection arsenal, but it’s not automatic. You have rights and options before, during, and after a garnishment begins.

How the garnishment process begins

The process starts when your federal loan enters default and is referred to the Department of Education’s collection unit. You’ll receive a Notice of Intent to Garnish Wages, giving you 30 days to take action. That notice must explain the amount owed, your right to review records, and your right to request a hearing. Many borrowers ignore the letter, thinking it’s just another collection notice — but that’s the biggest mistake. Acting during that 30-day window can stop garnishment before it begins.

Your right to a hearing

You are entitled to a fair hearing before garnishment starts. During the hearing, you can argue that:

  1. The loan is not yours.

  2. The amount claimed is incorrect.

  3. You already have a repayment plan or rehabilitation in place.

  4. Garnishment would cause financial hardship.

We prepare hearing requests, hardship affidavits, and supporting documentation to make sure the Department reviews your case fully. Once a hearing is requested, garnishment is usually postponed until a decision is made.

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  • Hardship exemptions and defenses

    If your income barely covers basic expenses, you can seek a hardship reduction. You’ll need to submit proof of household size, income, rent, and other essentials. In cases of extreme hardship, we can request a temporary suspension of garnishment. Other defenses include loans discharged in bankruptcy, identity theft, or administrative errors in the debt transfer process. Every case has its own facts, and each defense must be documented carefully.

  • Stopping a wage garnishment already in progress

    Even if garnishment has started, you can still stop or reduce it. Enrolling in loan rehabilitation or loan consolidation re-establishes your good standing and automatically suspends or ends the garnishment order once processed. Your employer will receive a release letter from the Department of Education or the collection agency. Timing matters — the sooner you begin, the faster your paycheck is freed up.

  • Your employer’s role

    Employers must comply with garnishment orders or risk penalties, but they can’t fire you because of it. If an employer receives multiple wage orders from the same debt, they’re supposed to honor the first valid one only. We often help HR departments communicate correctly with collection agencies to ensure compliance and stop over-withholding.

  • Why ignoring notices is a costly mistake

    Once AWG starts, reversing it can take weeks or even months. The government doesn’t need to go to court or file a lawsuit; they can garnish directly through your payroll provider. During that time, you might see reduced take-home pay, insufficient funds for rent or bills, and even overdrafts. Acting fast when you first receive the notice is always cheaper and easier than trying to undo the damage later.

Frequently Asked Questions

Up to fifteen percent of your disposable income. Certain benefits like Social Security Disability or VA benefits are generally protected.
See also: Federal Student Loan Default Guide and Treasury Offset Program Explained.

No. Federal law prohibits employers from firing you over a single wage garnishment order related to a federal student loan.
See also: Rehabilitation vs Consolidation.

You can request a hearing and demand proof. Mistaken identity and administrative errors happen more often than most people realize.
See also: Debt Validation Letters That Work.

If the garnishment was made in error or during an active rehabilitation agreement, you may be eligible for a refund. We file those requests for you.
See also: Rehabilitation vs Consolidation.

Yes, through separate programs — wage garnishment and the Treasury Offset Program. You can contest each individually.
See also: Treasury Offset Program Explained.

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