InstantNoodles

An easy way to find out your garnishment amount is take your check after taxes and multiply it by .85, this will give you what will remain of your check after the amount is witheld. I understand being cash poor. A good general rehab payment would be 1% of your Principle+Interest (they don't use Collection Fees to determine your payment amount). Let's assume your Fees are about 24% of $23,000 ...then your payment would be around $175/mo. on top of Garnishment. Realize this is only a guesstimate and you would need to speak with the agency to find out exactly what your payments would be. As to whether you should refinance your home, I would personally be nervous using all my equity up. It's better for your credit to rehabilitate your loans anyway if you can swing it.

I did not see this link: http://www.ed.gov/offices/OSFAP/DCS/default.html Which very clearly explains what can be done when in Federal Default and facing Administrative Wage Garnishment (for federal and non-federal employees), Tax Offset or Litigation. Do not forget the lovely Loan Locator Number which you can call and it will inform you who holds your student loans (if you've lost track or forgotten where they are) which is 1-800-621-3115.

Here is the link from Ed's AWG site Q&A's http://www.ed.gov/offices/OSFAP/DCS/awg.html This is the link for employer questions (very useful information, even for a borrower) http://www.ed.gov/offices/OSFAP/DCS/awg.employers.guide.html It is great if your employer wants to help you but please don't forget if they go into Noncompliant Employer Status (which they soon will if they don't start witholding from your paycheck) They can be held liable for your loans and Dept of Ed can sue them for what you owe. If they're a good employer you certainly don't want them to end up in that position. After the 2nd notice is sent they have precious little time to get the Garnishment started. There isn't much you can do now except file an Untimely hearing. From what I've read it appears you'll want to file for a reduced amount. Ed will want proof of all of your necessary bills (rent, insurance, utilities etc). During the time your Hearing is being reviewed you will still be garnished since this is untimely. If you were terminated from your last job and have been at the new employer less than 12 months you can also appeal. (see links for more specific info). A word of warning: Simply quitting and moving on to another employer is a bad idea because come next year IRS will update to Ed again and they'll have your new employer.

If you haven't received your agreement and this is indeed the direction you'd like to go, I'd suggest calling the PCA and ask when it was sent and does it need to be resent. They won't call you if you don't return it. (Our agency does but that's more of a courtesy and there's no promise they'll do it...the agency will probably push rehab if you want to change your mind, the payout is better for them than a consolidation which they receive no credit for).

Please someone correct me if I'm wrong on something, I'm sleepy! LoL

Due to his health issues and extremely low income, it sounds like he may qualify for Income Contingent Repayment (ICRP). If he's previously consolidated or has judgements on the loan he may not but it's worth looking into. Though ICRP isn't as good as Rehabilitation (it's basically consolidation) it will help him get the loans out of default and he can see about deferments or forebearance. Realize he will have to provide proof of his income, rent, etc. but I've seen people get approved for as low as $0/mo. so it's definately worth a shot. The biggest thing for him I'm guessing is following up on the loan after the consolidation because he'll only have one shot at this, after that if he defaults again ICRP will not be an option. If anyone knows more than I do about this program (and I'm sure someone does) please add to my comment

YOU PAY INTEREST FROM THE DAY A LOAN IS DISBURSED UNTIL THE DAY IT IS PAID IN FULL. THE ONLY EXEMPTION IS A SUBSIDIZED LOAN IN AN AUTHORIZED DEFERMENT. PERIOD. Sorry to yell, but people that don't get this are in for a rough ride. I apologize if my comment made it sound like I meant there's a point where you don't accrue interest. The point I was trying to make is the Borrower will hear from Payroll what the Garnishment amount is (say in this case $10k) After 10k is witheld from the Borrower, they may think the garnishment is over but it isn't. There would be additional funds that would have to be witheld because the loan was accruing interest during the garnishment period. Many borrowers and Employers alike misunderstand that and have to have it explained time and time again (and sometimes they still don't get it). We have a good number of Employers that end up going non-compliant because they refuse to withold the remaining funds. Hope that clears things up a bit!

Regarding your situation. Please contact the Agency before the 15 days elapses. You must enter into that Rehabilitation now as the $312.67/mo will be taken from you involuntarily in the form of garnishment and then you will need to pay an additional payment on top of that in order to get through rehab. You're by no means in the minority by having your Hearing denied. Most borrowers do not qualify for even the reduced amount. At least you have the opportunity to get into voluntary repayment. My guess is that when you finish your rehabilitation you will see your payments drop. The $312.67 sounds like the calculation of 15% of your disposable income (if this is the case, that would put your monthly take home $2084.47). To clarify, if you begin the voluntary payments at $312.67/mo., that IS your rehabilitation payments and you won't have to pay additional monies to rehabilitate the account provided that payment meets or exceeds the minimum for Rehabilitation (which I'm quite sure it does). Regarding the fee your employer may charge, that depends on the state; some states permit the imposition of a fee or charge on the employee. Federal law does not address the issue. You should check your state's law. Also Quilty, I do not believe contacting the Ombudsman would do much good as even Ed's Ombudsman's site directs the Borrowers to file a hearing (Timely or Untimely) which results in the same end. With the kind of income he has I highly doubt he'd qualify for any sort of reduced amount.

You are in a terrible situation however AWG is something I can help you with. You have 2 options to escape Garnishment: 1: Filing an Untimely Hearing. The AWG Hearing Process ED starts the garnishment process itself by sending the borrower a Notice of Intent to Garnish (SO2 Letter), which gives the borrower 30 days to file a request for review of objection(s) to the garnishment action and states his rights under the process. If the borrower?s request is filed timely (within 30 days of the date of SO2 Letter), ED suspends further action until ED has considered and ruled on all objection(s). However, if the request is filed untimely, ED does not suspend action while ED considers the objections, and proceeds to issue a garnishment order to the employer. However, if ED has not issued a decision regarding the objections within 60 days of the hearing request, ED will notify the employer to suspend garnishment until ED has issued a decision ruling that garnishment should be pursued to enforce the debt. If ED determines that the objections raised in the request for review are not proven, ED then notifies the employer to resume withholding pursuant to the garnishment order. The debtor may object to garnishment on a number of grounds: The debtor may object that garnishment in the amount or rate stated in the Notice of Intent to Garnish would create an undue financial hardship for the borrower and his or her family. Understand the likelyhood of this being approved is very slim, especially if you lack dependents. The fact remains that Ed approves very few Hearings and even less Untimely Hearings and you will not be seeing a representative in court, it will most likely be over the phone at a date and time over which you have no control. It is more likely you will see no change, possibly a reduction in the witholding but not a full dismissal. Even if your Hearing is approved and Ed halts AWG, it's only for 6 months and then the entire process starts over again. If you get an approved hearing you better make plans to start paying on that loan right away! ED uses contractors to assist in the garnishment process. Contractors may, for example, assist by gathering documents and information needed to evaluate the debtor?s claims, and may negotiate repayment agreements on behalf of ED. Only the ED hearing official has authority to determine the validity of the debtor?s objections to garnishment, and only ED issues the final decision on the merits of those objections. Ed is telling you here that the PCA's can't tell you if you qualify or not, all they can do is give you instructions C) Current enforceability of the claim is barred by law: The debt cannot be enforced at this time because the borrower has filed for relief in bankruptcy and the automatic stay is still in effect. The borrower has been reemployed within the past 12 months after being involuntarily terminated from the previous job. The borrower is responsible for providing documentation or evidence to substantiate any objection(s) raised in defense to the enforcement of the debt. PDF file with form is here: http://www.ed.gov/offices/OSFAP/DCS/forms/...For.Hearing.pdf Send it here: U.S. Department of Education Atlanta Service Center Attn: Hearings Branch 61 Forsyth Street, Suite 19T89 Atlanta, GA 30303 Fax: 404-562-6110 The other option is to quit but here you run into a dilemma: IRS updates to ED and if they can't find your employer that way, they'll scrub for it and will find it that way. At best it's a temporary fix. I would never suggest this to anyway as it's extremely foolish. What if you're making less? I've had so many people who end up in SWG and less than 2 months later I've had their accounts reinitiated with their new employers. The garnishment will always follow you. The best option is to rehab on top of garnishment. At least this way in 9 months you will not only be out of Garnishment, you will be out of default as well. I would be happy to answer any other questions you have to the best of my ability.

An idea regarding the $14k from your 401k, I know that if a borrower makes a down payment of good size, the rehab payments are then figured from the remaining principle + interest. Simply put: The more you make a down payment, the less you make in monthly payments. Just like if you were paying on a car. I'm not going into much detail here but it's definately something to consider. Also, I agree w/dropping cable and keeping the phone and getting dial up. Cable costs way too much anyway

Lynn where can I find a basic explanation of the difference between FFELP loans (which apparently I know nothing about and that infuriates me) and Federally defaulted student loans that the PCA's handle (GSL/Direct Loan/Perkins/Plus/F)? I'd love to read some description side by side by I'm not finding what I'm looking for.

Miss Bliss... I am floored. I truly hope that everything works out wonderful for you! You get to a point where you think there's not one person left in this country who can pick themselves up from a terrible situation without pointing fingers and blaming someone else but holy goodness you just made my day and renewed my faith a lil bit. Oh the joy of losing a bit my cynicism! Madbomber, she just gave you the best advice you could ever get and I truly hope you take it and run! While AWG would be a terrible thing, the gov't doesn't want to garnish you, it's really almost more trouble than it's worth. You just have to decide what can be cut from your budget to free up your money so you can pay something. I really hope it works out for you, I know how rough it can be to be stuck in a pit with seemingly no money. Btw, if you're working a set scedule, why not get a 2nd job? My husband and I have 4 jobs between the two of us and once you get used to it, it really isn't all that bad. The fact of the matter is I actually find my 2nd part time job refreshing change of pace from my full time job. I love retail and it can pay decent once you get a lil experience!

I don't pretend to know everything but I hope what lil advice I can give is a help to you and if I'm wrong about anything I'm sure someone will correct me.

To be more specific, if your wages are approximately $1600 after taxes, insurance, etc. then they would be able to withold $240/mo. through AWG. If you are already losing some of your income to a previous GAR then the Ed is able to withold 15% or up to 25% (example: You are losing 12% of your income to Child Support, Ed may then withold 13% because 25 - 12 = 13).