Defaulted student loans make you subject to wage garnishments, another of the fierce tools available to the hands of the Department of Education. But let me explain this process in a bit more detail because it is very different than a traditional wage garnishment. The kind of garnishment that the Department of Education can do is called an administrative wage garnishment.
This means they do not have to go to court, as do other creditors, in order to get a judgment against you from a court of law. With an administrative wage garnishment, an order is simply sent to your employer, requiring your employer to forward money right out of your paycheck to repay your student loan. The garnishment amount ranges from 10 to 15 percent of your disposable pay. So clearly, all of these negative consequences suggest that you do not want to be in a defaulted loan situation. It's worth you going to great lengths and doing everything in your power to prevent a default or get a defaulted loan out of default status.
Your student loans aren't subject to a statute of limitations, as are other forms of debt, like credit cards. So if you owe, ultimately you have to pay up or risk nasty things like wage garnishments. Not only is that a hugely embarrassing, and potentially career-damaging thing to happen to you at work, but a wage garnishment can put a serious crimp in your already tight budget.
Under the law, if the Department of Education pursues an administrative wage garnishment against you, the department can require your employer to turn over 10 percent of your disposable pay to be diverted in order to pay off your past-due student loan debt. This is all done without so much as a court hearing or a judgment against you. In fact, federal regulations require guaranty agencies to initiate wage garnishments as a means of enforcing defaulted loans.
The Debt Collection Improvement Act of 1996 authorized federal agencies, including the Department of Education, to garnish up to 15 percent of a debtor's disposable pay. So can anything be done about it? Actually, yes. You can fight the wage garnishment and demonstrate why it is that you can't afford that the payments and wage garnishment your lender or guaranty agency is seeking.
You'll build your case based upon various factors, such as your high day-care costs, your large credit card bills, your medical bills, and so forth. You then offer a counterproposal saying what amount you can afford to pay to the Education Department. All you need to do is fill out a three-page form to get the process started. This form is called a Financial Disclosure Statement, and it's designed especially for wage garnishment cases. Track down a copy of this statement on the Internet by visiting the Department of Education online at www.ed.gov/offices/OSFAP/DCS/forms/fs.pdf.
Article Title : Wage Garnishments, Part 1
Comments :
finally some inof on this subject. I have talked to several attorneys about this subject and very few can offer any advice.
I attended school from 1996 to 2001 . In 2001 the medical school had their accreditaion placed on probation. In 2002 the school lost their accreditaion. This means that I cannot even apply to take a state exam to receive a license to practice medicine. I am currently part of a class-action lawsuit against the school, but the student loan people are conti nuing to pursue me to repay my loans.
This has had to happen to other students, having the school they attended loose their accreditation while they were in sch ool or close to graduation.
If anyone has any suggestions or any experience wit h this I would appreciate your response. I guess you can post a comment on this website as a reply to this article.
Posted By : Ernest Williams
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