How To Escape Student Loan Wage Garnishment

Few things will ruin your work day more than a notice from Human Resources that you have been hit with a wage garnishment. If this has happened to you, hang tight. I will dive into solutions momentarily.

On the other hand, if you are reading this because of a nasty letter from a collection company then I urge you to contact us without delay. “An ounce of prevention is worth a pound of cure.” — this is especially true when it comes to wage garnishment. Let’s talk asap. There’s no time to waste.

Who is garnishing my wages?

The first step to freedom is to find out who is doing the garnishing and how much they are after. Work your way down this list until you get the agency’s name, phone number, and account balance.


If it was human resources who dropped the news on you then call them back. Ask them for the name and number of who is garnishing you. As a bonus, go ahead and ask them the total amount to be garnished.

Gathered your info? Skip to “Can My Debt Be Discharged?”.


Sometimes it may not be possible (or desirable) to contact human resources.  The next place to check is with Debt Management and Collection System (also known as the Default Resolution Group). Their number is: (800) 621-3115.

When you call, enter your personal information — SSN and DOB — into the automated system. If a third party collection company is handling your account then you will be given their name and phone number at this time. Please write down this information.

(If no other collection company is mentioned then your loans are most likely being handled “in house” by Debt Management and Collection System).

Next you will be given several options, including checking your account balance. Go ahead and select this option. Write down the information and end the call.

Occasionally, the Debt Management and Collection System will not have your information. When this happens, you will automatically be transferred upon entering your SSN. If this happens speak to the agent. They have direct access to the NSLDS (National Student Loan Data System) and may be able to get the info you need without having to create an account (more on this later).

Gathered your info? Skip to “Can My Debt Be Discharged?”.


Still don’t have your information? It’s time to get a little more creative. Start searching for emails and letters from collection companies. Make sure to be thorough because there can be more than one company handling your case. Find them all and write them down.

Gathered your info? Skip to “Can My Debt Be Discharged?”.


NSLDS stands for National Student Loan Data System. All federal student loans are supposed to be listed in the database — “supposed” being the operative word. Way too often, loans (or entire portfolios) are missing.

Gaining access to the database can be notoriously tricky. There are a litany of common occurrences that can lock you out and lead to weeks of frustration: name changes, lost passwords, unverified email accounts, typographical errors, etc.  For these reasons, I recommend contacting FSA ID Help at (800) 433-3243 when accessing the database for the first time. Follow the automated prompts to speak to a live agent. They can walk you through creating a FSA ID and expedite any problems that may arise in the process.

Gathered your info? Skip to “Can My Debt Be Discharged?”.


Next on the list: contact the financial aid department for all the schools you have attended. Give them a call and ask them to fax your student loan records to you. Typically, they will either honor your request or give you the phone number to call for the collection company handling your account (bingo).

Gathered your info? Skip to “Can My Debt Be Discharged?”.


When all else fails, check your credit reports. Believe it or not credit reports are typically the least reliable sources. Their info is usually either incomplete or “sketchy”. That’s why if you go this route it’s important to check them all (Experian, Equifax, and TransUnion).

Can My Debt Be Discharged?

Now for the fun part:

What if there is a way to instantly discharge (as in erase!) some or all of your defaulted student loan debt? It’s possible. Seen it many times. Only way to know if it can happen for you is to take a quick look at the various methods.

Let’s go:


In my experience, TPD Discharge is the most common method for discharging federal student loan debt. For those that qualify, it’s a fast and complete way to wipe out defaulted student loan debt (and therefore, any wage garnishments!). A real silver lining for those that are disabled.

TPD stands for Total and Permanent Disability, but don’t let the name fool you. You can work and even earn up to $15,000 per year (or a little more) and still qualify—provided you meet other criteria.

If there is even a chance you may qualify for TPD Discharge I encourage you to give them a call: (888) 303-7818. They are very courteous and will help guide you through the entire process.


The second most common method is called “School Closure Discharge”. Keeping things simple, if you ever attended a school that closed you should take a look at the application. This is true even if you withdrew.

Here is a link to the form. It’s a fill-able PDF. If you get all the way through the form print it, sign it, and fax it to the collection company that applied your wage garnishment. Then mail a “hard copy” to:

  • The US Department of Education
  • PO Box 5609
  • Greenville, TX 75403-5609

NOTE: If you attended a college and did not complete your schooling might be worth a quick “Google search” to see if the school closed shortly after your departure.


This method is making a lot of news lately. They have recently reworked the process and are once again reviewing applications.

To sum up Borrowers Defense of Repayment, you simply have to ask yourself this simple question: “Did the school mislead me (in any way) to get me to enroll?”.

Information such as (but not limited to):

  • Employment prospects
  • Program costs and nature of loans
  • Transferring credits
  • Career services
  • Admissions and urgency to enroll
  • Legal actions against the school

If you felt misled, I strongly urge you to apply. The easiest way is the online process. Here is the link: Borrowers Defense of Repayment. Please call (855) 279-6207 for help or to check the status of an application.

NOTE: Before you complete the application you will be asked if you would like to request your loans be placed in “stopped collections status”. If you say “yes”, here’s what will happen (in their words):

This means that the federal government or debt collection companies will stop attempting to collect on the loans, including by not withholding money from your wages or income tax refunds. Stopped collections status will continue until the borrower defense review process of your application is completed.



Say what?

In other words:

If you enrolled in a school and did not have either a high school diploma or GED then you need to take a look at False Certification of Ability to Benefit Discharge. It’s a fill-able PDF. If you get all the way through the form print it, sign it, and fax it to the collection company that applied your wage garnishment. Then mail a “hard copy” to:

  • The US Department of Education
    • PO Box 5609
    • Greenville, TX 75403-5609

NOTE: This form may also be used for parent PLUS borrowers.


Where do they get these titles?

In simple English:

Would your age, physical condition, mental condition, criminal record, or any other reason make it impossible to use your education to get a job? Then False Certification: Disqualifying Status Discharge is what you should try. The rationale being that the school should have vetted you more carefully, since they should have known the education would be a waste of money.

NOTE: This form may also be used for parent PLUS borrowers.


Here’s the question:

Did anyone forge your name to help you obtain federal student loans or to make a payment?

If so, then take a look at False Certification: Unauthorized Signature/Payment Discharge. Once you complete the form print it, sign it, and fax it to the collection company that applied your wage garnishment. Then mail a “hard copy” to:

  • The US Department of Education
  • PO Box 5609
  • Greenville, TX 75403-5609

NOTE: This form may also be used for parent PLUS borrowers.

Unpaid Refund Discharge

And finally:

Even when considering collection cost (which can be thousands) does it seem like the full loan amount is too high? If so the school may owe you a refund. Carefully examine your student loan portfolio and let the Unpaid Refund Discharge Form guide you through the process.

NOTE: This form may also be used for parent PLUS borrowers.

Let’s get prepared.

Luck is what happens when preparation meets opportunity.


This next step is all about preparation. You are about to call the collection company to “negotiate” (for the lack of a better term) for your freedom. You definitely want to be prepared.

(I would encourage you to take this step even if you applied for discharge, since there are no guarantees you will be approved. Plus the discharge process can take months.)

Gather documents

Getting out of wage garnishment almost-always involves either making additional payments (which can be as low as $5) or appealing to a “high power” (Requesting a Hearing). The former being easier (and far more common) than the latter. Thankfully, both methods require the same documentation.

  • Tax returns

Have you filed a tax return within the last two years? If so, then please get a copy of the first two pages. If not, then you will have to go with pay stubs only.

TIP: Can’t find your tax returns? You can request a copy straight from the IRS.

  • Pay-stubs

Grab copies of your two most recent pay stubs. Make a note on your pay stubs how often you get paid (weekly, monthly, bi-weekly, etc).

  • Financial Disclosure Statement

And finally, prepare a Financial Disclosure Statement.

Don’t let this step freak you out. It’s not near as hard as you would imagine and it can save you hundreds or even thousands of dollars. You gotta do it. Suck it up and knock it out now.

Here’s the link: Financial Disclosure Statement

As you complete the fill-able PDF form, please keep these things in mind:

  • Enter all gross income in the left column. The gross is the largest number—so before any kinds of deductions, such as taxes or health insurance. Don’t worry. Health insurance will be accounted for later (on the expense side of the form).
  • When listing your expenses, make sure to find them all. Go through a couple months of bank statements. Every recurring expense you dig up can potentially reduce your “disposable income” and therefore lower your payment.
  • Don’t forget to include your current wage garnishment in field #19 “Federal student loan payments”. It’s a big reason you are completing this form (so you get credit for the expense).
  • Don’t forget to refer to your pay stubs and calculate your total monthly healthcare costs. This amount will go in field #15 “Necessary Insurance”.
  • Do you have installment loans or a significant amount of credit card debt? Place this information in field #21 “Other Expenses”.
  • Page two begins with section 3. It involves your family size. Read the small print very carefully. The larger your family size the lower your payment. It’s one of the most important fields on the form. They are extremely generous when it comes counting up your allowances (you can even use unborn children). Make sure you count everyone that you are helping support — even if it’s a college buddy living on your couch.


Having trouble understanding some of the fields? These additional instructions might help.

Make the Call

Alright, it’s finally time to make the call and face your captor. Don’t worry. By this time, you are well prepared. Things should work out very well.

(Is the Department of Justice handling your case? If so, let’s hope your garnishment is administrative and not judicial.

Administrative wage garnishments (AWG) are applied without a judgement. This makes them relatively easy to put on or take off.

If your wage garnishment is judicial then the DOJ has taken you to court and won a judgment against you. Once that happens they tend to become grumpy and uncompromising. Not a good combo.

NOTE: Even if your wage garnishment is judicial, you may still be able to restore your financial aid.)


When you call, the first thing you can expect is for them to offer you a settlement. They will offer to cancel the collection fees if you will pay the principal and interest in full. If you are like most people, this is ridiculous. They are forced to make you this offer, so humor them and move on.


Now it’s time to start checking your options. See if they will lift the garnishment if you will agree to consolidate through the Direct Loan Program.

Stipulations will typically include making one or more “good faith payments” combined with agreeing to consolidate your loans within 90 days or less.

If you are not familiar with direct consolidation, loan forgiveness, and income driven repayment plans (who is?) then this can be a challenge. You will need to either start your “crash course” at or seek outside help.

(Shameless Plug Warning: It just so happens we have expertise in student loan forgiveness and specialize in fast-tracking direct consolidation loans. We do not take active wage garnishment, but make exceptions in cases such as these. Give us a call at 901-590-4870 for a no obligation consult.)


The most common way to solve wage garnishment is through a loan rehabilitation program. It takes 9 payments to complete the program, but it’s possible to have the garnishment lifted after just 5 (hallelujah).

And unless you have already done this before, it should be an option (fingers crossed). Go ahead and ask.

(Loan Rehabilitation not an option? Please skip to Requesting a Hearing.)

  • Finding your lowest payment

Now it’s time to discuss your rehab payment. The lowest possible payment is $5. Let’s see how close we can get to that number.

There are two ways to calculate loan rehabilitation payments:

  1. AGI and Exemptions from Income tax returns
  2. Current pay stubs combined with a Financial Disclosure Statement

Most people only try method 1. That’s a huge mistake. Method 2 is typically much cheaper. Have the collection company calculate it both ways. Then choose the method which is the lowest.

  • Make five payments

From here it’s just a matter of making your payments. Once you have made your 5th payment contact the collection company and request they lift the garnishment (cue angelic music). You will need the fax number for your human resources division.

(You’re welcome!)

  • Should I consolidate?

Once the wage garnishment is lifted you will probably be eligible to consolidate. The debate now will be between the benefits of consolidating verses completing the loan rehabilitation.

I am of the opinion it’s better to go ahead and consolidate because 1) it’s faster 2) it’s certain and 3) you get the opportunity to choose your new loan servicer.

Collection companies would disagree pointing to the lone benefit (as I can see it) of the removal of the “default status” from your credit report. The history of late payments remain.

(Contact us today for a no-obligation consult. We can discuss your options and help you fast-track a direct consolidation.)

  • Finish the rehabilitation

What now?

If you have decided to complete your rehabilitation then make sure to make all 9 of your payments—in full and on time (of course).

Once you are done, start watching for your new loan servicer to make contact (email, postal service, phone calls, etc). Continue to make payments until you hear from them.

NOTE: This “transition” from loan rehabilitation to new loan servicer can be tricky. Make sure to follow through, contacting the collection company again if necessary. Neglecting to do so will almost certainly result in your loans returning to default (I see it all the time).


Last (but not least) is to request a hearing. Don’t freak out. This is something that can be done in writing—if you so choose.

But first…

MY DISCLAIMER: I am not an attorney, nor is this legal advice. If you do not feel comfortable requesting a hearing on your own behalf, I would encourage you to seek legal help in all phases of the process.

There I said it.

Most wage garnishments are administrative (so not court ordered). Therefore, an administrative process is in place for those who object. This is it.

To start the process you will need to complete the “Requesting a Hearing” form. You should be able to get it from the collection company handling your case.

As you complete the form, here are some things to keep in mind:

  • You can request the hearing be conducted in one of three manners:
    1. In writing
    2. By telephone
    3. In person
  • If you request to appear in person you must pay your own expenses.
  • All three types of hearings require supporting documentation.
  • Assume (even if you don’t request it) that your hearing will be conducted in writing and without your presence. This means your documentation will “make or break” the outcome. Be very thorough. “Go the extra mile”. Find every expense and allowance and make sure to provide documentation to prove it. Load their boat with information. It can only help you.
  • Fight the urge to quit. Getting this form completed will be an exercise of will power. Just do it—even if you think you make too much money! Sources tell me that an estimated 60% of these get approved via “rubber stamp” because they run out of time. That’s the rumor.

NOTE: Remember, once the administrative wage garnishment is lifted you will probably be eligible to consolidate (which is like a second chance). If you need help fast-tracking a consolidation then please give us a call: (901) 590-4870.

Conclusion: Things to consider

  • Should I even stop the garnishment?

The rich rule over the poor, and the borrower is servant to the lender.

-Proverbs 22:7

Not gonna preach at you. But I hate debt and would be remiss not to remind you to consider the obvious. Right now you are being forced to pay off your student loan debt. At current rate, when will you be through? Would it perhaps better just to let it ride?

Just something to think about.

  • A Word on Student Loan Forgiveness.

This is a loooong post. To correctly handle the topic of student loan forgiveness the length would probably need to double (no kidding).

In lieu of that idea, let me make one single point:

If you work in Public Service, you should do everything in your power to get rid of your wage garnishment and into the Public Service Loan Forgiveness (PSLF) program. It promises tax-free forgiveness for all of your qualifying federal student loan debt.