So how would you like to be a Starbucks Barista with a PhD depending on your minimum wage paycheck to eat only to find out that it’s been seized to pay for your defaulted student loan.
You got not notice that your paycheck was going to be seized, you were not served with a summons, no court process occurred. The debt collectors, paid on commission and given big bonuses for tracking you down like the debt-burdened dog that you are, only need to find your employer, send them a letter and they start collecting your pay. Not to worry though, if you want to appeal this star chamber attack on your daily bread, you can petition to attend a hearing…..IN ONE OF ONLY THREE CITIES IN THE ENTIRE UNITED STATES OF AMERICA!
The borrower has the right to:
- Be sent a notice 30 days prior to ED ordering wage garnishment that explains ED’s intention to garnish, the nature and amount of the debt, an opportunity to inspect and copy records relating to the debt, object to garnishment to collect the debt, and avoid garnishment by voluntary repayment;
- An opportunity to enter into a written agreement under terms agreeable to ED to establish a voluntary repayment agreement;
- An opportunity for a hearing to present and obtain a ruling on any objection by the borrower to the existence, amount, or enforceability of the debt;
- An opportunity for a hearing to present and obtain a ruling on any objection that garnishment of 15% of the borrower’s disposable pay would produce an extreme financial hardship;
- An opportunity for a hearing to present and obtain a ruling on any objection that garnishment cannot be used at this time because the borrower is now employed within a 12-month period after having been involuntarily separated from employment;
- Having garnishment action withheld by filing a timely request for a hearing, until the hearing is completed and a decision issued;
- Not to be discharged from employment, refused employment, or subject to disciplinary action due to the garnishment, and to seek redress in federal or state court if such action occurs; and
- Not to have any information provided to the employer but what is necessary for the employer to comply with the withholding orde
And if you’re an employer of an over educated barista, you have rights as well…honest, you do:
You recently received a notice from the U.S. Department of Education concerning a change in how we process payments received from employers when an employee is under an Administrative Wage Garnishment Order. Please be advised we understand that many businesses have debit blocks set up on their accounts to protect them from unauthorized ACH debits. The way our Treasury lockboxes work is there is an application that can convert any check received into an ACH debit or an electronic truncated check. Debit blocks and other account tools used by banks to prevent fraud will not prevent your check from being cleared through our Treasury lockboxes.
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 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) 974-9490 or email us at email@example.com.