I’m Being Garnished for Student Loans My Grandmother Paid Off


Dear Steve,

I got behind on my student loans several years ago. My grandmother was a co-signer. She ended up paying my loans off in June of 2007. My credit report also shows this. However, the Dept. of Education is stating that I still owe this debt. They are now garnishing my wages for this debt. Unfortunately, my grandmother passed away in 2013 so I have no way of getting any kind of proof. We tried contacting her bank and they only go back 5 years. I am trying to get a hold of her credit reports (not sure if that will help) but trying deal with the credit reporting agencies is not easy.

What can I do if they aren’t going based on my credit reports in which all three of them show the debts paid. Not only do all three of my credit reports show paid, but there are 4 different loans showing paid on all three credit reports. How can I stop this garnishment.



Dear Frank,

The answer to this mystery is first going to start with a little data mining. The first thing you will need to do is login to the National Student Loan Data System (NSLDS) and gather information on the status of your loans. The NSLDS site is the definitive word on federal student loan status.

If you are getting your wages garnished with an administrative garnishment you should have received notice of the pending garnishment and how to appeal the garnishment before it began.

Getting your hands on the credit reports is not helpful in this case. It doesn’t matter what the credit report says, only what NSLDS says. A credit report is not a creditor official document, just a listing of information reported.

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While the NSLDS system may only give you summarized data regarding payments on your loans, the MYEDDEBT.ed.gov website can give you your payment history on your defaulted federal education debt.

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So the first task in your detective efforts is going to be to discover what is being reported about your federal student loans. When you login to both portals, print the information out so you have it easily at hand.

Then, if there is some disagreement about the data reported, you will have to attempt to gather evidence of payments made. This is going to be tough to do since the bank may not give you access to her accounts without some legal authority to do so.

There are several options and guesses as to what actually happened here. It’s possible your Grandmother thought she was paying off your loans but only paid for a co-signer release. But it has not been common for a federal student loan to have a cosigner in a long time. I wonder if you had any private student loans that typically use cosigners.

Federal student loan versus private student loan.

So go do your homework and update me on what you find in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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