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Ask Susan Responses
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Student Loans: Garnishment & Collections |
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More Ask Susan |
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I am having my wages garnished for a past due student loan. I have tried to settle with them on the principal balance which was $1,500. To date,
I have been penalized and now owe a total of $3,200. Is it legal for them to continue to penalize me when my wages are being garnished and also, what is the total amount they are allowed to penalize you? -John |
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John,
If you don't make satisfactory payment arrangements, the government can garnish 10 percent of your wages to recover their money.
In addition, the authority of the Department of Education to assess and receive collection costs is permitted by the Federal Higher Education Act of 1965, as amended. This provision is included in the original promissory note you signed upon accepting your Federal student loan.
For further help, US Department of Education suggests you first contact them directly. The Dept informs us they have several new programs available to help former students resolve their delinquent loan problems. To see what repayment programs might be available, please call the US Department of Education, Direct Loan Servicing Center at 800-848-0979 or 315-738-6634. You might also try to contact the US Department of Education Service Center at 1-800-621-3115 for advice on being able to establish a repayment schedule. We understand you can also get detailed information on repayment plans, the consequences of defaulting and tips on resolving disputes, from www.ed.gov.
Best of luck,
Susan |
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I have had defaulted student loans since 1985. About 10 years ago they started to take my refund checks. I have no problem with that. As of last year, the Department of Education and a collection agency agressively started trying to collect the debt. I told them I can pay them maybe $50 a month. They would not even think of it. They now have garnished my wages and just took $1,300 this year from my taxes. I feel enough is enough, I did offer to start making payments. Please help if you can. -Robert |
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Robert,
You must feel frustrated, but unfortunately your situation is likely to continue until the loan is paid in full. The government will not give up. From their perspective, you made a promise to repay the debt and they are requiring you keep that promise.
My advice is to make every effort to repay the debt as quickly as you can. That way, you can put this behind you and get on with your life. Hopefully, you feel that education you received was well worth it.
Susan
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My husband recently received a letter from a collection agency advising him of an unpaid student loan he took out in 1988 before we were married. My husband does not dispute the debt, which has now almost tripled in amount. The problem is my husband is unemployed. The collection agency is threatening my husband’s income tax returns and wage garnishment. Well, since I am employed I file joint taxes and carry my husband. My question is am I liable for the debt which was incurred before our marriage. Can our tax returns be seized? Can my wage be garnished? -D |
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D,
You are not liable for your husband's student loan; however, since you file a joint tax return, your husband's name is on the return. The government can seize your joint tax refund check. But your wages cannot be garnished to satisfy the repayment of your husband's delinquent student loan. Let me strongly encourage your husband to make every effort possible to get this student loan paid. As you are seeing, this student loan will not go away. As far as I know, there is no statute of limitation on a government guaranteed student loan and the government is likely to pursue collecting on this loan until it is paid.
To see what repayment programs might be available, please have him call the US Department of Education, Direct Loan Servicing Center at 800-848-0979 or 315-738-6634.
Susan |
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