Perhaps you have just received a letter in the mail concerning a wage garnishment effective within the next month. This wage garnishment concerns any unpaid student loans. Wage garnishment is a tactic used by the government to help repay student loans that have gone into default. Again, wage garnishment can only occur after defaulting on a student loan. This means you would have failed to make payments for at least nine months.
If this is the case for you, there are ways out. Please note, if your wages have begun being garnished, but you have not received any notification as to the cause of the garnishment, contact your employer as well as your student loan servicer immediately. Under federal law, the government must notify someone before they can begin garnishment. The letter should include why the garnishment is happening, how much will be taken out, and how long it will take before the garnishment can officially begin (usually thirty days). Also, the letter must state that there are repayment options available as to stop the garnishment from happening.
Judy received just such a letter in the mail about two weeks ago. She sprung into action immediately, just as you should do if you are in her situation. Judy knew her loans had defaulted. Sometimes, it’s extremely hard to make payments towards student loans when there’s no extra money to be found anywhere. We understand, many people have been there. The letter from the government stated that her employer would be garnishing ten percent of Judy’s wages to go towards the student loans. This was only a slight relief for Judy. Legally, the federal government can garnish up to fifteen percent of a person’s wages. However, ten percent is still a high amount, especially when you’re living paycheck to paycheck, like Judy.
Stopping the wage garnishments was actually a simple process for Judy, as it should be for you. By calling her loan servicer, Judy was able to set up a repayment plan that was better suited to her income. The same can be done in anyone’s situation or at any income level. The standard ten year repayment plan the federal government provides on these student loans is simply not for everyone. Unbeknownst to many, there are other options out there. All it takes is one simple phone call to the loan servicer to figure everything out.
By making that phone call, Judy was able to stop the wage garnishments before they could actually occur. This should be a huge relief to anyone involved in the same situation. Furthermore, the new repayment plan offered lower monthly payments for Judy. She was still struggling to pay them off, but it was a much better agreement than she had previously. She could actually afford to pay, rather than throw out the bill until there was more money in the budget.
If you are facing wage garnishments concerning student loans, follow Judy’s example. There are plenty of options out there, you just need to work towards them.