Student Loan Garnishment
The cost of receiving quality higher education is increasing every year. Most students are unable to afford the high tuition fees and related expenses that undergraduate and graduate education demands. Therefore, a large number of students turn to financial aid options, including grants and loans, so that they are able to fulfill their educational goals. Although grants are essentially gifts of money, student loans (both federal and private) need to be paid back. Even though most student loans are designed to accommodate students, lenders are entitled to take a number of steps to ensure repayment in cases of default.
Student loan garnishment is one of the means by which lenders (the Department of Education for federal loans or private lenders/banks for private loans) obtain money from students who have defaulted on their loan repayments. Federal education loan programs define a default as having occurred after 270 days of non-payment. In student loan wage garnishment, a percentage of the defaulting student’s pay check or salary is transferred directly to the creditor. However, there are limits to the percentage that can be deducted from a defaulting student’s wage. Private student loan creditors must not garnish more than 25% of a private student loan debtor’s wage, while the Department of Education can garnish up to 15% of a federal student loan debtor’s wage.
Student loan garnishment can cause many hardships for students or their families. To avoid such measures being taken against them, students should ensure that they opt for aid options that best suit their circumstances. The ideal aid options for students are grants and scholarships and students should only opt for loans if they are unsuccessful in obtaining other forms of funding. If all federal aid options have been exhausted and students still require more funds, they can opt for private student loans. However, these should be every student’s last resort, as the terms and conditions of private loans are stricter than those of federal loans.
If you are considering applying for private student loans, you must conduct a thorough search to ensure that you opt for a loan that best suits your specific circumstances. By choosing a loan that is tailored to your individual situation, you can avoid default and ensure that you are not subjected to measures such as student loan garnishment.
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