Administrative Wage Garnishment (AWG)
What Is Administrative Wage Garnishment?
Administrative wage garnishment is a federal collection action that allows the government to withhold a portion of a borrower’s wages to repay a defaulted federal student loan without obtaining a court order.
It applies to federal student loans in default.
A percentage of disposable pay may be withheld from each paycheck.
Why It Matters
Administrative wage garnishment:
- Reduces take-home pay
- Occurs after default
- Does not require court judgment
It is one of several tools the government may use to collect defaulted federal student loan debt.
How Administrative Wage Garnishment Works
Administrative wage garnishment allows the U.S. Department of Education to instruct an employer to withhold a portion of a borrower’s disposable income.
Example: If a borrower defaults on a federal student loan, up to a defined percentage of disposable wages may be deducted directly from each paycheck.
Borrowers are typically notified and may request a hearing before garnishment begins.
Garnishment continues until the loan is resolved or rehabilitated.
Garnishment vs. Voluntary Repayment
Garnishment → Involuntary wage withholding
Voluntary Repayment → Borrower-initiated payment plan
Garnishment follows default.
FAQs About Administrative Wage Garnishment
Does garnishment apply to private loans?
Private lenders generally must obtain a court order.
Can garnishment be stopped?
Loan rehabilitation or consolidation may end garnishment.
Is there a limit to how much can be taken?
Federal rules cap the percentage of disposable wages.
Related Terms
