If the U.S. Department of Education is taking money from your paycheck or your federal tax refund because of a student loan, first identify the loan and read the collection notice. The notice gives you the deadline and instructions for requesting a hearing. A timely hearing request may temporarily pause collection, but it does not, by itself, get the loan out of default. To end default, compare the available resolution routes—consolidation, rehabilitation, a repayment agreement, or paying in full—and confirm the terms with the agency handling your loan.
This guide covers federal student loans. Federal Student Aid guidance reviewed October 9, 2026, describes the procedures below; the pages reviewed did not display publication dates, and the notice and current official instructions control your case. These sources do not establish how private student-loan collection works.
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First, verify the loan, the default, and who is collecting
Do not assume a paycheck deduction or refund offset is connected to a federal student loan until you confirm the debt and the agency handling it. Federal Student Aid says a federal loan generally enters default after at least 270 days without a scheduled payment. Its guidance also says involuntary collections may begin after more than 360 days without payment and no action. These are general thresholds, not a substitute for checking your individual loan status or notice.
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- Sign in to StudentAid.gov and inspect your dashboard and loan details. Federal Student Aid says a default warning may appear on the dashboard.
- Look for a letter from the Default Resolution Group (DRG). A DRG letter can indicate that a defaulted loan has been transferred there.
- If the loan is a commercially held Federal Family Education Loan (FFEL), check whether a guaranty agency handles it; it may be your contact instead of DRG.
- Confirm that your mailing address on file is current. Keep the actual collection notice, envelope if available, and any later correspondence.
For a loan transferred to DRG, MyEdDebt.ed.gov provides loan status and payment history. Its login is separate from your StudentAid.gov login. Follow the contact details on your notice to confirm which organization can answer questions about your specific debt and payment options.
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It matters who holds or services the defaulted loan because that organization can confirm the balance, payment history, forms, and submission route for your case. Do not assume every federal loan is handled through the same office: a commercially held FFEL loan may be handled by a guaranty agency, while loans transferred to DRG can be reviewed through MyEdDebt.ed.gov. If the notice and online account appear inconsistent, contact the organization named on the notice and ask it to confirm the status and the deadline in writing if possible.
Know which collection is happening
| Collection method | What it can affect | What to check first |
|---|---|---|
| Administrative wage garnishment | The Department may order an employer to withhold up to 15% of disposable pay for a defaulted federal student-loan debt, without first taking the borrower to court, according to Federal Student Aid guidance reviewed October 9, 2026. | The wage-garnishment notice date, its hearing-request instructions, and whether a garnishment has started or is scheduled. |
| Treasury offset | The government may withhold a federal income-tax refund or certain federal benefits to collect federal debt. | The Treasury offset notice, the date you received it, and the deadline and mailing instructions for disputing the debt. |
These are different procedures with different notices and deadlines. A Treasury offset is not the same as an employer withholding part of your pay. Do not use the deadline or instructions from one notice for the other.
Federal Student Aid describes administrative wage garnishment this way: “Administrative Wage Garnishment (AWG) is a process through which ED can order your employer to withhold up to 15% of your disposable pay to collect your defaulted debt without taking you to court.” The stated maximum is based on disposable pay, not gross pay. The guidance reviewed does not provide enough information to calculate what a particular borrower’s paycheck deduction will be, so ask the agency handling the case to explain the amount and process shown in your notice.
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If your wages are being garnished, act on the wage notice
Federal Student Aid says you may request a hearing to avoid administrative wage garnishment. Its FAQ states that the request must be postmarked no later than 30 days from the date the administrative wage-garnishment notice was sent. Use the notice and the current form instructions to determine exactly how to submit your request and what documents to include.
- Find the date the wage-garnishment notice was sent and calculate the 30-day postmark deadline. If the notice gives more specific instructions, follow them.
- Get the U.S. Treasury’s Administrative Wage Garnishment Request for Hearing or Eligibility Determination form identified in Federal Student Aid’s guidance.
- Complete the form and provide the supporting information required for the issue you are raising. Send it by the method and to the destination specified by the form or notice.
- Keep a complete copy of the request and attachments. Retain proof of mailing or delivery and any confirmation you receive.
- Continue to monitor mail and respond to follow-up requests. A hearing request does not itself resolve the loan’s default.
Federal Student Aid says a timely wage-garnishment hearing request temporarily pauses garnishment until after the hearing. That pause is procedural; it does not erase the debt or remove the loan from default. The agency’s stated limit is up to 15% of disposable pay, not 15% of gross pay. The amount taken in an individual case depends on the applicable process and facts; the guidance reviewed does not establish a case-specific amount.
Prepare carefully for a wage hearing
A hearing request is an opportunity to raise an issue through the process identified in the notice; it is not the same as applying to rehabilitate or consolidate the loan. Read the form for the grounds it asks you to address and the documents it requires. Avoid sending an incomplete request or relying on a generic online address when the notice or Treasury form provides a specific destination. The 30-day rule in Federal Student Aid’s FAQ is measured from the date the notice was sent, and the request must be postmarked by the deadline; do not wait until the last day to assemble materials.
After submitting the request, keep tracking both the hearing and the underlying default. A temporary pause lasts only until after the hearing under the guidance described here. If the hearing does not resolve the dispute in your favor, or if you need to get out of default regardless of the hearing outcome, you will still need to discuss a resolution route with DRG or the guaranty agency handling the loan.
If your tax refund is being offset, use the Treasury notice’s separate process
The Department says Treasury mails an offset notice to the borrower’s last-known address. The notice states that offset and negative credit reporting are scheduled to begin in 65 days. Federal Student Aid’s FAQ says a borrower seeking to dispute the debt may request a hearing within 65 days of receiving the offset notification and mail required documents to DRG.
- Read the Treasury notice and note when you received it. The FAQ describes a 65-day window measured from receipt for requesting a hearing to dispute the debt.
- Use the address, form, and submission directions on the notice. If documents must be sent to DRG, follow the notice’s instructions rather than relying on an address found elsewhere.
- Send the required documents within the stated window and retain copies and proof of mailing.
- Watch for the hearing decision and any requests for more information. Federal Student Aid says an offset hearing request temporarily pauses collections until after the hearing.
The 65-day hearing window is not the same as the 30-day wage-garnishment window. A hearing can provide a route to dispute the debt and may temporarily pause collection while the matter is considered, but it does not by itself resolve default. If both wage garnishment and Treasury offset are involved, follow each notice separately.
The offset notice is especially important if you have moved or do not regularly check the mailing address on your federal loan account. Federal Student Aid says the notice is sent to the last-known address, so keeping your address current helps you receive the notice and act on the stated timing. If you have a copy of the Treasury notice, use its own instructions to identify what to send, where to send it, and how to document delivery. Keep a copy of every attachment as well as the notice itself.
Choose a route to get the loan out of default
A hearing addresses a collection or a dispute; resolving default requires a separate step. Federal Student Aid identifies consolidation, rehabilitation, a repayment agreement, and payment in full as routes to resolution. Compare the time, payment requirements, collection effects, and credit-history consequences before choosing. Confirm eligibility and terms with DRG or the relevant guaranty agency.
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|---|---|---|
| Direct Consolidation Loan | May be a faster online route than rehabilitation. | Interest capitalization and collection costs may increase the amount owed, and the default history may remain on the credit record. |
| Rehabilitation | Generally requires nine on-time voluntary payments. Direct Loan and FFEL borrowers make them during 10 consecutive months; Perkins borrowers make nine consecutive payments. | It takes several months. Involuntary collections may continue until the loan is out of default or at least five rehabilitation payments have been made. Successful rehabilitation removes the default status and stops collections. |
| Repayment agreement | The FAQ says a first payment within 65 days of the notice can avoid Treasury offset, while a first payment within 30 days can avoid wage garnishment. | The default record remains on the credit history, and the agreement can take several months. Check the relevant notice and agreement for the deadline and terms that apply to you. |
| Pay in full | Federal Student Aid identifies paying the debt in full as a route to immediate resolution. | Confirm the payoff amount with DRG or the guaranty agency before sending payment. Paying in full may not be financially realistic for every borrower. |
There is no single route that is best for every borrower. A route that may be faster can have credit-history and cost consequences; a route that can remove the default record may require months of scheduled payments. If you are already facing garnishment or offset, compare the resolution timing with the collection dates in your notices. Ask the agency handling the debt what happens to the specific collection while an application or payment plan is pending; do not assume that simply starting an application stops collections.
What to know before choosing consolidation
Consolidation may be the faster route, but speed is not the only consideration. Federal Student Aid warns that interest capitalization and collection costs may add to the debt, and that the record of default may remain on your credit history. Ask the agency handling the loan what amount would be consolidated and what costs would be included, and confirm what the option means for your particular loan before applying.
Before deciding, compare the expected timeline with rehabilitation and confirm that consolidation is available for your loan. The guidance describes it as a potentially faster online route, not a guarantee that every borrower will qualify or that collection will stop at a particular point in the application process. Get the current official instructions and ask how any pending wage garnishment or Treasury offset will be handled while your application is processed.
What rehabilitation requires
Under the standard rehabilitation agreement described by Federal Student Aid, the monthly payment is 15% of annual discretionary income divided by 12. If that payment is unaffordable, the borrower can submit the Loan Rehabilitation Income and Expense form to seek an alternative amount based on current finances and vital expenses.
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Rehabilitation is therefore a longer route with a defined payment commitment. If the standard amount does not fit your current finances, ask for the Loan Rehabilitation Income and Expense form and provide the information it requests about income, expenses, and vital costs. Federal Student Aid says the form can be used to seek an alternative payment based on current finances and vital expenses; do not assume that simply stating a payment is unaffordable will automatically change the amount. Confirm the proposed payment and the count of qualifying payments with the agency administering the agreement.
Also plan for the fact that collection may continue before rehabilitation is complete. Federal Student Aid says involuntary collections may continue until the loan is no longer in default or at least five rehabilitation payments have been made. Completing the required payments successfully removes the default status, stops collections, and restores federal student-aid eligibility under the guidance described here.
What a repayment agreement can and cannot do
A repayment agreement may help avoid a particular collection if you meet the notice-dependent first-payment window: the FAQ gives 30 days for avoiding wage garnishment and 65 days for avoiding Treasury offset. Do not treat those periods as a general payment grace period; verify the triggering notice date, first-payment requirement, and agreement terms that apply to your case. The agreement does not remove the default record from your credit history.
The repayment agreement is different from rehabilitation: it may avoid a collection when its first-payment condition is met, but it can take several months and leaves the default record on your credit history. Ask whether the agreement applies to the collection method you are facing and confirm what amount, payment date, and ongoing terms it requires. The FAQ’s 30- and 65-day windows are tied to the relevant notices; a payment outside the applicable window may not provide the same protection.
When paying in full is being considered
Federal Student Aid lists paying the debt in full as a route to immediate resolution. Before making a large payment, confirm the payoff amount and payment instructions with DRG or the guaranty agency named in your notice. The amount to pay may need confirmation from the organization handling the account, and the sources reviewed do not establish a universal payoff figure or payment method. Keep the confirmation and proof of payment with your records.
Keep records and use official, no-fee help
- Save every notice, form, payment record, and hearing decision. Record when a notice arrived and when you mailed or submitted a response.
- Use the contact information and submission instructions on the actual notice for case-specific deadlines and forms.
- For loans transferred to DRG, use MyEdDebt.ed.gov to review status and payment history; remember that its login is separate from StudentAid.gov.
- Do not pay a company merely to enroll you in a default-resolution service without checking what it actually does. The Department says DRG does not charge for its services and warns borrowers to be wary of enrollment, subscription, or maintenance fees from companies offering default help.
Federal Student Aid notes that rehabilitation documents may need to be mailed or faxed and that libraries may offer free printing and faxing. Buying equipment is not a prerequisite established by this guidance.
Be cautious about anyone who promises to erase the debt, stop collection automatically, or secure a particular outcome in exchange for enrollment, subscription, or maintenance fees. The Department says DRG does not charge for its services. Use official Department or guaranty-agency contacts to confirm whether a payment or document is required, and do not share account details with a company merely because it advertises help with default. If you need help preparing paperwork, a library may offer free printing or faxing; a printer or scanner is optional, not a condition for pursuing rehabilitation.
What if you ignore the notice?
Ignoring a notice can mean missing the opportunity to request a hearing within the stated window. The consequences described by Federal Student Aid include administrative garnishment of up to 15% of disposable pay, Treasury offset of a federal tax refund or certain federal benefits, and negative credit reporting. The Department’s offset notice says offset and negative credit reporting are scheduled to begin in 65 days. The FAQ also says involuntary collections may begin after more than 360 days without payment and no action. Check your own notice rather than assuming that any one timeline applies identically to every case.
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Missing a hearing deadline does not mean you should stop communicating with the agency. It does mean you should not assume that the hearing pause described for a timely request will apply. Contact the organization named in the notice to ask what steps remain available to dispute or resolve the debt, and compare the four resolution routes. If the notice concerns both a wage garnishment and Treasury offset, the deadlines and procedures remain separate even if they involve the same loan.
Limits of this guidance
The procedures here are for defaulted federal student loans, based on Federal Student Aid pages reviewed October 9, 2026; the pages did not display publication dates. Deadlines and available options can change, and your notice and current official instructions govern how to act. The sources reviewed do not establish private-loan collection procedures, state-law defenses, or whether a particular borrower qualifies for a hearing or discharge. For an individual case, verify the loan type and contact the organization named in the notice.
Do not apply the federal procedures in this guide automatically to a private loan. The official guidance described here does not establish what a private lender may do, what state-law protections may apply, or what defenses are available in a particular dispute. If you are unsure whether the debt is federal, check StudentAid.gov and the loan details before relying on these timelines or forms.
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Frequently Asked Questions
How do I get out of default and stop involuntary collections?
Federal Student Aid identifies Direct Consolidation, rehabilitation, a repayment agreement, and paying in full as routes to resolve default. The timing and trade-offs differ. A hearing request may temporarily pause a collection if it is timely, but it does not itself resolve default. Confirm eligibility and what happens to your specific collection with DRG or the guaranty agency handling the loan.
What are my rights if the Department is garnishing my wages?
Federal Student Aid says you may request a hearing to avoid administrative wage garnishment. Its FAQ says the request must be postmarked within 30 days of the date the wage-garnishment notice was sent. A timely request temporarily pauses garnishment until after the hearing, but does not remove the loan from default. Follow the notice and Treasury form instructions.
How long do I have to dispute a Treasury offset?
Federal Student Aid’s FAQ says a borrower seeking to dispute the debt may request a hearing within 65 days of receiving the offset notification. Use the address and submission directions on the actual notice, send required documents as instructed, and keep copies and proof of mailing. The FAQ says an offset hearing request temporarily pauses collections until after the hearing.
What happens if I ignore a defaulted federal student-loan notice?
You may miss the stated opportunity to request a hearing. Federal Student Aid describes possible administrative garnishment of up to 15% of disposable pay, Treasury offset of a federal tax refund or certain federal benefits, and negative credit reporting. Read your notice promptly; timelines and collection status can vary by case.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteCan a student-loan company charge me to use the Department’s Default Resolution Group?
The Department says DRG does not charge for its services and warns borrowers to be wary of enrollment, subscription, or maintenance fees from companies offering default help. Use the official contact information on your notice to confirm services and payment instructions.
The Bottom Line
Start with the notice, not a guess: confirm the loan and agency, then follow the separate deadline for a wage-garnishment or Treasury-offset hearing. A timely hearing may pause collection but does not cure default. Compare consolidation, rehabilitation, a repayment agreement, or paying in full with DRG or the guaranty agency, and keep proof of every submission and payment.
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