I received a letter from a collection agency for one of my co-workers. She owes a student loan for a large amount of money. Does the collection agency have the right to demand a garnishment from this employee (they said they are collecting on behalf of the lending institution) or does it need to be received from the court itself like so many of the child support deductions I have to make? I have their "second" request and this is most important. Please help. Thank you.

If the collection agency doesn't have a judgment, they cannot garnish wages. Contact them and ask that they send you proof of judgment before you send them a dime.

If you live in the US there are many states that will allow garnishment for government insured loans to be garnished without an additional judgement. If this is a valid student loan yes, they may file for a garnishment directly without first getting a judgemenment, this is one of the expections.

If you live in the US there are many states that will allow garnishment for government insured loans to be garnished without an additional judgement. If this is a valid student loan yes, they may file for a garnishment directly without first getting a judgemenment, this is one of the expections.

Very interesting to know; I learned something today. Personally, I'd want more documentation than just a demand for money; too many shady collectors out there.

Administrative Wage Garnishment - A Guide For Employers The Federal government backs billions of dollars annually in education loans to students and their parents made by banks, schools, and the government itself. Most students repay their debts. However, between 10 percent and 15 percent of these borrowers do not repay their loans. Many of these borrowers are employed and able to make payments. When borrowers default, it is ultimately the taxpayers that pay the expense for their education loans.

As the agency responsible for administering the programs that provide this Federal loan financing, the U. S. Department of Education (ED) pursues collection of student loans aggressively through borrower contact, credit reporting, litigation, collection agencies and offset against Federal payments, such as Federal income tax refunds. ED also uses another tool for collection of defaulted student loans– garnishment of wages of defaulted borrowers. The Higher Education Act, (P.L 102-164; 20 U.S.C. § 1095a) authorizes ED as well as student loan guaranty agencies (http://www.ed.gov/erod/org_list.cfm?category_ID=SGA) to collect defaulted Federally-financed student loans by means of an administrative order to the employer, and without the need for a court order. This order requires the employer to withhold and pay over to ED or the guarantor up to 15% of the debtor's disposable pay. This Federal law supersedes any state law governing wage garnishment.

ED believes that the availability of wage withholding to collect these loans encourages many employed defaulted borrowers to repay their loans voluntarily. In those cases where borrowers continue to refuse to honor their obligations, wage withholding is an effective debt collection tool. Since ED implemented its Wage Withholding in 1993, the collection of defaulted student loans has increased dramatically. Both the Department of Education and student loan guarantors have increasingly used this tool over the past several years, recovering hundreds of millions of dollars.

Relying on a separate, newer Federal law, the U.S. Department of Education can now order employers to withhold 15% of disposable pay (unless the debtor provides ED with written consent to deduct a greater amount) to satisfy loan or grant obligation (s) owed to the Department. The Department now relies on 31 U.S.C. § 3720D, enacted by Section 31001(o) of the Debt Collection Improvement Act of 1996 (DCIA), Pub. L. 104-134,110 Stat. 1321-358 (Apr. 26, 1996). The cooperation from employers has contributed and will continue to contribute to the significant results in this program. ED has worked to minimize any direct impact the program might have on your business operations. If you have any questions, please contact ED's Administrative Wage Garnishment Branch (AWG) at (404) 562-6013 or email us at [email protected].

This is one case where even the states garnishment laws are over riden by the federal governments rules.

So even in states where they don't allow garnishment, they have to allow this.

This is one case where even the states garnishment laws are over riden by the federal governments rules.

So even in states where they don't allow garnishment, they have to allow this.

I always get a kick out of how they make laws to override other laws. I still think it's cute that the government is allowed to intercept tax refunds for money owed to the courts, but I can't do it when I win in small claims.