Education Loan

By: EconomyWatch Content   Date: 23 November 2009

About The Author

EconomyWatch Content

Follow The Money

EconomyWatch, Content Team

 

  • Dot Div
  •      

Applying for an education loan is a major decision for a student. Although a convenient financing option, an education loan creates a fixed debt obligation on an individual for a substantial period. Therefore, a student must conduct a thorough assessment to determine the potential of earnings with a particular degree. This must be sufficient to avoid student loan default and maintain a decent standard of living.

Education Loan Garnishment

Failure to make payments in favor of a student loan can result in substantial damage to the credit report. Besides, such a scenario may force the federal government to impose a student or education loan garnishment on the student debtor. An education loan garnishment is an act of deducting a portion of funds from the defaulter’s paychecks for repaying student loans.

When a student defaults on government education loans, the government has the right to remove funds from the person’s salary account automatically. This is done without conducting legal proceedings or requesting permission. Besides, an employer is obligated to comply with an education loan garnishment request.

Disputing Education Loan Garnishment

A student loan borrower may dispute a wage garnishment action on the following grounds:

  • The loan does not exist. The government has mistakenly debited your account or someone else has manipulated the education loan documents.

  • The debt has already been settled in full and has not been recorded correctly.

  • The terms of the education loan are being negotiated with the lender.

  • Your outstanding amount has not exceeded the amount mentioned under the wage garnishment. Sometimes, the outstanding amount is wrongly reported as payments may be credited very late.

  • The education loan has been discharged in bankruptcy. This is very rare though.

Also, a student may remove education loan wage garnishment if s/he becomes eligible for loan forgiveness or discharge. To qualify for a full or partial loan discharge, one of the following -riteria must be met:

  • The school/institution attended by the student was shut down before the course was completed.

  • Employment related services, such as placement assistance, as promised by the school were not delivered.

  • The student becomes a victim of forgery on disbursement checks or promissory notes.

  • Refunds owed by the school remain unpaid.

Finally, a student can claim for education loan wage garnishment removal if s/he has become permanently and completely disabled; having no probability of working productively.   


  • Dot Div
  •      

Most Popular in Student Loans

Related Links
blog comments powered by Disqus