Student Loans and Garnishing Bank Accounts

I'm just guessing, but it is possible that the refund could get sent directly from the IRS to current guarantor. Under current federal guidelines, your disposable wages can be garnished at 10%. This garnishment has priority over all others and the writs do not expire. I'm not sure if they first need to get a local "judgment" or if they use another avenue to get a garnishment writ sent to an employer. Good luck. I currently have $75K in student loans, and finally ran out of deferments and forebearances. Beginning in May, my monthly payments will be $580 (25 years). I may have to live with a student loan garnishment in the future as that will be temporarily a smaller hit against my take-home salary. If at all possible, try to work something out as student loan issues can quickly get out of hand once they head into default.

 

Actually depeding on the state that the person lives in. Most states allow wages to be garnished at 25%.

 

Yes, but Federal Law caps garnishment for student loan debt at 10% of after-tax wages. In Oregon, the total garnishment is 25% of after-tax wages. If a writ comes in for debt related to a guaranteed student loan, it takes priority and that leaves 15% for any others waiting in line. I work for a very large employer, and our payroll controller told me that I would be surprised how many garnishments they do for old student loan debt. I told him, I doubted I would be surprised. The national default rate on student loans is about 5%, so when you have an employer with 10,000 employees, 500 defaults would "seem" large.

 

I shoul dmention that the approximate 5% of student loan default rates bantered about is a heavily filtered number. For a more realistic look at the default rates, see the Lexington Institute's report which is using the Department of Education's numbers. These percentages are significantly higher. No wonder so many employees may be under Student Loan garnishment.

http://lexingtoninstitute.org/1057.shtml

 

I didn't see it was a guaranteed loan, my mistake.

 

I'm not sure the original poster was talking about a guaranteed student loan either. If not a GSL, then the rules change significantly.