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Wage Garnishment Hearing Procedures

Wage garnishment is used to collect defaulted student loans after several attempts to obtain voluntary payments have failed. Therefore it is important to learn about the wage garnishment hearing procedures outlined below as well as your right to Request a Hearing.

The Administrative Wage Garnishment Hearing Process

The process actually begins when the Department of Education (DoE), after verifying the debtor's address and place of employment, sends a series of notices and letters to the borrower warning him or her to either enter a repayment plan or garnishment action will be used to recover the debt.

Students (or former students) with loans in default, who wish to request a hearing to dispute a wage garnishment must use the Request for Hearing Form to request an official hearing about the issue.

If requests to enter into a voluntary payment agreement fail, the DoE sends a "Notice of Intent to Garnish" called an SO2 Letter, which gives the borrower 30 days to file a Request for Review of Objection(s) to the garnishment action and outlines the debtor's rights under the process.

If the borrower files the Request for Review of Objection(s) within the 30 days, then the DoE suspends further garnishment action until they have considered and ruled on all objection(s).

If the borrower fails to file the Request within the 30 days, the DoE considers the objections, but does not suspend garnishment action unless more than 60 days have passed without a decision.

Whether the garnishment action is continued or suspended, if the DoE determines that the objections raised are not proven, then employers are notified to continue/resume withholding pursuant to the garnishment order.

Grounds for Objection(s) to the Garnishment Action

Borrowers may object to wage garnishment action for the following reasons:

1. The debt does not exist or you do not owe the amount claimed;

2. The loan was previously paid or settled in full;

3. The loan is currently in repayment or the debtor has entered into and complied with the terms of a repayment agreement;

4. The amount claimed to be owed on the loan is incorrect because some payments have not been credited;

5. The loan was discharged in bankruptcy; (very rare)

6. The loan is unenforceable due to a particular (State or Federal) law that bars or prevents the government from enforcing the debt such as:

a. Borrower has filed for relief in bankruptcy and the automatic stay is still in effect.

b. Borrower has been reemployed within the past 12 months after being involuntarily terminated from the previous job.

7. The loan may be subject to discharge in whole or in part due to:

a. School attended by borrower closed

b. The ability to benefit from the school's education was falsely certified by the school that approved the loan.

c. Unauthorized signature or forgery of the borrower’s name on the promissory note or disbursement checks.

d. Public Service Cancellation (Perkins loans only)

e. Unpaid refunds owed by the school attended by the borrower with the loan proceeds.

f. Death or permanent and total disability of the borrower.

g. The garnishment action, in the amount or rate stated in the Notice of Intent to Garnish would create an undue financial hardship for the borrower and his or her family.

The borrower is responsible for providing documentation or evidence to substantiate any objection(s) raised in defense to the enforcement of the debt. All Request for Hearing Forms must be submitted in writing to the following address:

U.S. Department of Education
Atlanta Service Center
Attn: Hearings Branch
61 Forsyth Street, Suite 19T89
Atlanta, GA 30303
Fax: 404-562-6110
Telephone: 404-562-6012

Students (or former students) who wish to dispute wage garnishments must submit their request in writing using the Request for Hearing Form.

NOTE: Although contractors assist in the garnishment process by gathering documents and information needed to evaluate the debtor’s claims, and negotiate repayment agreements on behalf of the DoE; Only the DoE hearing official has authority to determine the validity of the debtor’s objections to garnishment, and issue final decisions based on the merits of those objections.

I also recommend students, parents and employers review the following pages...

Employers' Wage Garnishment Actions

Student Wage Garnishment Information