Student Loan Garnishment: What It Is, How It Works, and How to Stop It (2025 Guide)

Student loan garnishment is one of the most feared consequences of defaulting on student loans. Many borrowers suddenly see money deducted from their paycheck, tax refund, or even Social Security—often without fully understanding why it happened or how to stop it.

This comprehensive guide explains student loan garnishment, how it works, how much can be taken, and legal ways to stop garnishment fast.

What Is Student Loan Garnishment?

Student loan garnishment is a legal debt collection method used mainly for federal student loans when a borrower defaults.

Once a loan is in default, the government can forcefully collect money from:

• Your wages
• Your federal tax refund
• Certain government benefits

Unlike most debts, federal student loan garnishment does not require a court order.

When Does Student Loan Garnishment Start?

Student loan garnishment usually begins after:

• 270 days (9 months) of missed payments on a federal student loan

Once in default, the loan holder can begin Administrative Wage Garnishment (AWG).

Required Notice

Before garnishment starts, borrowers must receive:

• A written notice
• At least 30 days to respond or request a hearing

Ignoring this notice allows garnishment to begin automatically.

How Much Can Be Garnished From Student Loans?

Federal Student Loans

• Up to 15% of disposable income
• No court approval required
• Employer must comply

Disposable income = income after mandatory deductions (taxes, Social Security).

Private Student Loans

• Court judgment required
• Garnishment limits depend on state law
• Usually between 10%–25%

Other Types of Student Loan Garnishment

1. Tax Refund Garnishment

Federal student loan debt can result in tax refund seizure through the Treasury Offset Program.

✔ Entire federal refund can be taken
❌ State tax refunds usually unaffected

2. Social Security Garnishment

• Up to 15% of Social Security benefits can be garnished
• A protected minimum amount must remain
• SSI benefits are exempt

How to Stop Student Loan Garnishment Quickly

The most important thing to know:
👉 Student loan garnishment can be stopped legally.

1. Student Loan Rehabilitation (Best Option)

Loan rehabilitation allows borrowers to:

• Make 9 income-based monthly payments
• Stop garnishment after 5 payments
• Remove default status from credit report

✔ Best long-term solution
✔ Improves credit over time

2. Student Loan Consolidation

• Combines defaulted loans into a new loan
• Requires enrollment in an income-driven repayment plan
• Garnishment stops once consolidation is complete

⚠ Default remains on credit history

3. Request a Garnishment Hearing

You may challenge garnishment if:

• The loan is not yours
• The amount is incorrect
• Garnishment causes financial hardship

⏳ Must request within 30 days of notice

4. Income-Driven Repayment Plans (IDR)

After rehabilitation or consolidation:

• Monthly payment may be as low as $0
• Prevents future garnishment
• Based on income and family size

Can Bankruptcy Stop Student Loan Garnishment?

In most cases:

• Student loans are not discharged
• Garnishment may pause during bankruptcy
• Discharge requires proving undue hardship

This is difficult but not impossible.

Federal vs Private Student Loan Garnishment

How to Avoid Student Loan Garnishment

To prevent garnishment:

• Never ignore default notices
• Apply for income-driven repayment early
• Keep contact information updated
• Act immediately after missed payments

Early action can prevent default entirely.

Frequently Asked Questions (FAQ)

Final Thoughts

Student loan garnishment is serious—but it is not permanent.

✔ Federal law provides multiple ways to stop garnishment
✔ Acting quickly protects income and credit
✔ Rehabilitation is usually the best solution

If you are facing garnishment, do not wait. The sooner you act, the easier it is to stop.