I defaulted on my student loan about 2 or 3 years ago. the balance now with all the fees is over $10,000. My loan is assigned to Financial Asset Management Service. They called my work today and said i was about to go into wage garnishment and i was supposed to contact them back today. I did and I asked them if i can enter into rehab and he tells me no I can't because the DoE audited my account and put it up for wage garnishment and they would garnish my wages at the amount of 15% of the total balance. he also stated that i would receive a 4 page letter saying i was going into garnishment and my only other options was to pay the full amount of the loan, ask for a special hearing or just take the garnishment. Can they do this? I thought if i asked for rehab they would let me enter into it. Please help me i am trying to get my life turned around and repay my loan but i also can't afford the 15% of the balance each month that they want.

Sorry for this post to be so long....

Ive dealt with them for my rehab..they tried the same thing with me....pay now or Im calling your payroll dept. States have certain limits on wage garnishment...only a certain % I believe.

They can garnish though so don't think they cant.

They have to allow you into rehab....and it has to be at a level you can afford. Dont pay it over the phone...you need the paper trail.

Get ahold of an ombudsman and explain your situation and how they're strong arming you. They can help, but your allowed to go thru rehab. Just dont default on the rehab or you start all over again.

I don't have any personal experience with wage garnishment, but here's what I remember from reading here.

I have seen others post that they simultaneously did garnishment and rehab. That is, they made a rehab payment on top of the garnishment. Even with the garnishment going forward, I believe you can still enter rehab.

If I were you, I would be on the phone to the DOE ombudsman now. See if you can stall the garnishment (ask for the hearing, whatever), and try to work out going into rehab. The ombudsman may be able to help you work with the CA to set up an agreement.

Here's some info from the DOE on Administrative Wage Garnishment - http://www.ed.gov/offices/OSFAP/DCS/awg.html

Good Luck

Audited your account? what the h-ll does that have to do with anything....he has to allow you into rehab.

And dont fall for the "Hold on while I connect you to our accountant" bull..it's the guy sitting next to him on the phone. He'll throw all these #'s at you and confuse you.

Stick to your guns and get into rehab...the guy I talked to said either pay now or Im callind payroll..I told him go right ahead...this call is being recorded and Ill use it against him for threatening me. (of course he knew the line was recorded when he called)

I am in garnishment now ... it SUCKS SUCKS SUCKS. And once you've defaulted and gone into a wage garnishment situation, they DO NOT have to let you into rehab. Well, that's not entirely true ... you CAN rehab, at the same time you are dealing with the garnishment. In addition to the 10% they are taking out of my check, I have to pay them an additional $70/month to "rehab" it and get it out of garnishment. Let me tell you what I learned, allbeit a little late.

Go to this website and read everything you can find there. http://www.ed.gov/offices/OSFAP/DCS/index.html Then read this, if you don't stumble over it ... http://www.ed.gov/offices/OSFAP/DCS/disput...ml#Hardship-AWG

And don't forget this one ... http://www.ed.gov/offices/OSFAP/DCS/awg.html This is perhaps the most important one because it tells you about appealing the garnishment decision (the one I wish I had found BEFORE garnishment began). Even if your garnishment starts before you can get your appeal info together, you can still appeal; they will continue to withhold for up to 60 while they are processing your appeal, but it will eventually stop until a decision has been reached. This is where I am now.

I was not that far behind - I was supposed to start making payments in Jan 2003 and just flat out forgot about it. I lost my house to foreclosure, I had to uproot my kids for the fourth time in three years to move across town AGAIN, and frankly, I never had very good contact with the lender to begin with. I found out that the garnishment was going to start, not by them calling me or by letter, but rather when I called the state guarantee corporation and asked for the loans to be consolidated! It was only then that I learned of their intentions - the paperwork had already been dispatched to my payroll dept, but I had seen nothing other than a letter in May that the $210 payment I had agreed to make was past due (I never agreed to such a payment).

It took some time to get all the documentation together to file the appeal, but I have my fingers crossed that it will work out. I have two kids and it's tough giving up almost $450 a month for this. I did point out in my letter attached to the appeal that by the time they would stop the garnishment, I would be caught up to the point where I would have been if I had been making payments, that I had learned my lesson and that I had NO INTENTIONS of letting it get behind again. I also offered to make double payments every month (which is only $140 instead of $450).

This is the form you will need to start your appeal process http://www.ed.gov/offices/OSFAP/DCS/forms/...For.Hearing.pdf ... Good luck!