One of the things the federal Department of Education can do to collect on a defaulted student loan is an Administrative Wage Garnishment. They do not need to sue you and get a judgment; they just take a piece of your paycheck. That is not to say that they cannot do this without telling you first, but you have to act fast.

What is in the Notice of Garnishment?

A notice must be sent to you 30 days prior to the commencement of the garnishment (and is considered received 5 days after it is sent). It goes to your last known address, or if none, your place of employment. It will contain:

  • The nature and amount of the loan balance;
  • A statement of their intention to garnish your wages; and
  • An explanation of your rights

What do I do when I get it?

Upon receipt of this notice, you must request a hearing within 15 days (although the notice may say 30; be sure to read it thoroughly). A hearing must then be held, and a decision issued, within 60 days of the request for the hearing.

During that time, the garnishment cannot be issued. If you request the hearing after the 15 days, then you will get a hearing, but the garnishment will begin in the meantime.

Do not be surprised if the hearing notice has a location in another part of the country. These hearings are almost always conducted telephonically, with relevant documents provided to the hearing officer in advance.

What are my rights?

You should also bear in mind that you have certain rights regarding the process.  You can:

  • Inspect and copy records related to the loan;
  • Enter a repayment agreement;
  • Request as part of the hearing info "concerning the existence and amount" of the loan or "the terms of the repayment schedule"; and
  • Challenge the garnishment itself

It is very important that you request the hearing within the 15 days, or the time stated on the notice. That way you hold off on the garnishment and have a chance to set up an affordable payment arrangement to get out of default.

I Can Help!

If you live in New Jersey and have received a notice of Administrative Wage Garnishment on your federal student loans, please click on this link immediately to schedule an initial call to discuss your case. Put my experience to work for you!

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Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.