Can I Get My Stolen Student Loan Wage Garnishments Back?


Dear Steve,

I have a defaulted student loan that was subject to wage garnishments. After several months of $400/month being taken out of my checks beyond my control, I was finally informed that 1099 employees are not subject to wage garnishments and that they would stop forcing my employer to cut my checks. However, even after admitting their faults, they said they will not be refunding me any of those funds.

Since I was never supposed to be subjected to wage garnishments in the first place, can I legally get my “stolen” money back and start repayments on my own terms now? …or at least have those payments transferred towards a reinstatement or rehabilitation program that I technically already satisfied after all those months of payments?



Dear Sho,

This is why it is so important to ask for a hearing when you first get a notice of an Administrative Wage Garnishment (AWG). I’m assuming that is what you were hit with for federal student loans.

For federal student loans an AWG is administered through the Department of the Treasury. You can request a hearing and make your case for the return of money improperly seized. You can contact the AWG department at Treasury at Call (202) 874-6810 or e-mail

You are correct that as a self-employed or independent contractor your wages should not have been garnished. The rules say this regarding self-employed and independent contractor people: “Based on these findings, the agency will issue no garnishment order and rescinds any order that may have been issued to you. The agency will pursue collection of the debt described in the notice from you by other means, such as referral to the U.S. Department of Justice for collection by litigation, and by offset of any Federal funds you may be owed.” – Source

So while the garnishment happened, those funds were directed towards your debt which benefited you. And as you can see, stopping the garnishment just moves your defaulted debt into a different bucket to process to collect. For federal student loan debt you should pursue a rehabilitation program to get this back on track and get you out of the pipeline for suit by the United States of America. See The Easiest Way to Stop a Student Loan Wage Garnishment – Loan Rehabilitation.

If this was over a private student loan, good luck with that. The chances of getting your garnished wages back is going to be between slim and none.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.