Millions of Americans are now facing the possibility of wage garnishment as student loan payments have resumed. Wage garnishment occurs when the Department of Education orders your employer to withhold a portion of your paycheck to repay your defaulted student loans.
**How Wage Garnishment Works:**
If you're behind on your federal student loans, the government can garnish up to 15% of your disposable income without a court order. Disposable income is what's left after legally required deductions like taxes. Before garnishment begins, you should receive a notice from the Department of Education outlining the debt and your rights.
**Your Rights and Options:**
* **Request a Hearing:** You have the right to request a hearing to dispute the garnishment. Reasons for disputing could include financial hardship or errors in the loan amount.
* **Negotiate a Payment Plan:** Contact the Department of Education to explore income-driven repayment plans. These plans can lower your monthly payments based on your income and family size.
* **Loan Rehabilitation:** Rehabilitating your loan involves making nine on-time payments within a 10-month period. This can remove the default status and stop the garnishment.
* **Consolidation:** Consolidating your loans can also help you get out of default. You'll need to agree to repay the new Direct Consolidation Loan under an income-driven repayment plan or make three consecutive, voluntary, on-time, full monthly payments before consolidating.
**Protecting Your Income:**
Act quickly if you receive a notice of wage garnishment. Understanding your options and taking proactive steps can help you avoid or minimize the impact on your finances. Contact the Department of Education or a qualified financial advisor for personalized guidance.
Student Loan Wage Garnishment: What You Need to Know
Student loan payments have restarted, and that means wage garnishment could be on the table for those behind on their payments. Wage garnishment is when the government takes money directly from your paycheck to pay off your debt. Understanding your rights and options is crucial if you're facing this situation. Here's a breakdown of what you need to know to protect your income.
Source: Read the original article at CBS