06/01/2015 11:14 am ET Updated Dec 06, 2017

Is There Any Hope to Stop a Student Loan Wage Garnishment?


"Dear Steve,

I'm wanting to know who I can contact so I can come up with a plan to pay back my student loan, being that my tax return was garnished. Is there some type of plan I can try to go into so things don't get worse for me and who can I contact. On credit report it says us depart of edu as my lender.



Dear Trisha,

The short answer is there is a simple process on how to deal with this. But I think you are describing a tax refund intercept rather than a straight wage garnishment.

When it comes to stopping a tax refund intercept the easiest way to avoid that is to not get a tax refund. You can adjust your withholdings so you are not due money back at the end of the year. You should talk to your HR department for help with that process and they may direct you to an IRS worksheet to calculate the change in withholdings you will need to make.

Once you make that adjustment you will have more money in your pocket each month and you absolutely should follow this guide to get your loans out of default. There is no excuse or reason for leaving a federal student loan in default and in fact doing so might inflate your balances another 20% with unnecessary collection charges.

If you are getting your wages garnished then follow this simple process to stop the wage garnishment and get your loans back on track. Again, there is no reason to live with a wage garnishment for federal student loans when good options exist.

Just keep in mind that an income contingent repayment program is not always the best thing to do when dealing with student loans. There are a number of options to examine but it will depend on your specific situation.

Before I go I wanted to leave you with three easy action items you can jump on right now to address your situation. Just click here.

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