Too late to rehab my fed student loans w/ wage garnish?

Soaplady will be along to assist you, she is familiar with student loans.

soaplady please help! I'm married with two young daughters and I'm the sole breadwinner so losing my $5k federal return will be quite financially devastating at this point....thanks!

recap: I consolidated my 5 loans 18 months ago and already defaulted on rehab once about 6 months ago. I have a total of $31k in defaulted federal student loans.

Ok, I finally got through on the phone and am now in loan rehabilitation...for the second time. However, "cathy" says my wages will continue to be garnished until I complete the rehabilitation period of 9-12 months.

"cathy" says my payments are going to be $360 a month including wage garnishment. So $270 a month wage garnishment plus $90 monthly payments (I can afford this)...Is this reasonable and why will they continue to garnish my wages if I am rehabilitating?

I asked "cathy" if my federal tax returns were at risk of being garnished as well. She said "I don't see anything about them being at risk." Should I trust her about this? I assume she just wanted me to make payments and doesn't care or even know. Who would know? and how can put a hold on federal tax return garnishment?

Lastly, can I negotiate the collection interest while I am in rehabilitation?

If you already completed a rehab program meaning that you made the 9 payments and the new loan was funded, you are ineligible for another rehab...you can only rehab once.

Federal law states that if you are being garnished, and want to rehab, you payments must be made over and above the garnishment.

Collectors really have no way of knowing if an account is included in the tax offset program. Some guarantors send updates, some don't. Basically if you were not in repayment last year, you are at risk for having your taxes taken. Call the IRS...they will be able to tell you if you have lien.

No you cannot negotiate interest or collection fees while in rehab. If you defaulted on a Direct Loan, you collection costs will be waived upon the completion of the rehab. If you had a FFELP loan, collection fees are not waived.

So, my loans are being rehabilitated at an affordable rate and my credit will improve after 9 months AND I can return to grad school. Yes, my wages will be garnished but it is only 15% + $90/month ($360 total).

Also, I called the IRS and there is no lien against my federal tax returns!:) I received my state returns already.

First payment is coming from my state returns and I am placing $900 from federal returns in it's own checking account so that the monthly payments can be automatically withdrawn ON TIME, CONSECUTIVELY, EVERY MONTH!! :D

I literally knew nothing about default loans, wage garnishment etc. yesterday so thanks to all the awesome advice on these forums. I'm going to disneyland!!!

:D :P God Bless you Brock :!:

will they take my federal tax return?

Are you in default??

i dont know wat u mean default?not on any student loans

Then who would take your taxes for what?

the bancruptcy court to pay creditors we filed on?

mmmmm...you should have asked this in the bankruptcy forum and have been a little bit clearer. Talk to your bankruptcy attorney...it is a good possiblity that the trustee will take it.

Like many others I had no clue my SSI check, which is direct deposited, was going to be garnished by FSL. I received no notices at all. Last year they began taking out $53.00 per month and the beginning of this year with our cost of living raise they began to take out $103.00 without sending me any notice whatsoever. I was forced to go on Disability for many reasons and even had a review this past year and it was even ordered by a Judge that I was unable to work. I have been told that there are or is a form online somewhere that I can fill out and send in to stop this, but I have no clue where to look. I have punched in many topics in the search category but come up with nothing. Can anyone help? Shall I begin to get paper checks of which I will receive my full amount and cash them at Walmart? I think it would be well worth the few extra dollars I spend cashing it rather than have them snatch it out of my account. I am concerned about the $250.00 stimulus payment because I was also reading in the Social Security site this morning that they can take the whole thing from me. YIKES!!! I have been depending on getting that. Being on such a fixed income and this being a "gift" from the government I don't feel they should be allowed to take that. Help help.

Getting a paper check wont stop the garnishment...it is taken of your check no matter which way you get it.

Your stimulous check will more than likely be seized.

How long have you been in default for?

Okay, I just got off the phone with one of the assistants here. He gave me a number to call where I can request a hardship deferment. When I called they could not find my loan information and now I have to call the original lender "Sallie Mae". Yet, I went back and read about the paper check. They can not take monies out of the check before it is deposited directly. They have to wait until it is in the bank before taking it. Also, if I take the check to my bank to deposit any monies, then the garnishment will be taken first. So..here are my thoughts. Go to a paper check until I get the hardship deferment taken care of; sign it over to my Significant Other to cash for me...huh? Good, Bad? What do you think?
Thank you for responding so quickly by the way.

Silver aka Elizabeth

Is this a federal loan or a private loan? Federal loans take the money directly out of the check...a private loan would have a judgeent against you and would seize the whole bank account. I dont know who this assistant is but federal loans in default can and do garnish federal payments. There also is no deferment for a defaulted loan.

my wages are already being garnished and it is entirely to much for me to afford. Can i still apply for hardship deferment.

is it true that once ur wages are bening garnish that and its to much to afford that there is nothing u can do about it. that the collection agency will garnish u to the whole debt is paid

For federal loans you are given the opportunity to appeal the garnishment on a hardship basis before it starts.They sent out a 30 day intent to garnish and that is your opportunity to object

For federal loans you are given the opportunity to appeal the garnishment on a hardship basis before it starts.They sent out a 30 day intent to garnish and that is your opportunity to object

I found out today my wages are going to be garnished. My thirty days has passed, but garnishment has NOT started. Is there anything I can do to stop garnishment?

Once the 30 days has past, a letter is sent to your employer. Depending on what agency is administering the garnishment, there can be a delay during this period depending on when they send the garnishment letter and when it arrives in regards to your payroll cycle.

Why didnt you respond during the 30 days? At this point, you can appeal but your appeal will go to the bottom of the pile. The agency works on the appeals filed within the 30 day window first...when time allows they get to the non 30 day appeals. Unless you have well documented hardship, the garnishment will not stop.

How do I respond to the initial notice of intent to place loans in default and will they notify me prior to any further action such as garnishments, what can i do at this point, I have been making biweekly payments (nothing even close to what they were asking) but still I was making an attempt. How do I use this website to post my own post..thanks

I took out a Federal Perkins loan in the late 80's for $2800. I subsequently went to grad school and graduated in 1993. I worked from 1993-1999 in public service at a non profit specifically identified in the Perkins loan agreement i signed. I submitted forms to my school verifying that employment and went on with my life. Last November I started getting Wage Garnishment Notifications from the Dept. of Education. I wrote to them explaining I had paid the Perkins loan through employment. They wanted proof from my school. The school does not keep records back that far. Someone suggested I get proof from my employers, I furnished the Dept. of Ed with letters from the non profits verifiying my employment and asking for a hearing. Nothing. My wages are being garnished at $650/month, this in addition to the $300/month I have been paying on legitimate students loans since 2003. I fulfilled the terms of the loan agreement. Now the Dept. is garnishing my wages and not accepting documentation I have that can prove I fulfilled the loan agreemtn thru employment, including IRS W2 forms. They also tell me I have exhausted all appeals, even though I requested a hearing (in writing, prior to garnishment and again afterwards) and never had one. I attempted to consolidate my current loan with this Perkins just to stop the garnishment but was told by Federal Direct I cannot consolidate a loan in garnishment!!!!! What am I supposed to do?

Do you have proof that the schools actually paid on the perkins loans? My understanding of Perkins cancellation ...

Applying for Teacher Cancellation

You must request the appropriate forms from the office that administers the Federal Perkins Loan program at the school that holds your loan. You must also provide any documentation the school requests to show that you qualify for cancellation. It is the school’s responsibility to determine whether you qualify, and the school’s decision cannot be appealed to the U.S. Department of Education. Schools may not cancel any portion of a loan for teaching services you performed either before the date the loan was disbursed or during the enrollment period covered by the loan.


I believe that just "going on with your life" was your downfall. Was the loan cancellation confirmed thru your school? I worked at a qualifying elementary school and the teachers there received statements each year, plus they had to defer or forebear their loans during the employment period. Loan cancellation only pays out one time a year and if your loan was not in the correct status, it would have defaulted within the first year, possibly prior to the loan payout, negating your cancellation. Did they give you any indication when your loan defaulted?