My Student Loan Was Consolidated But I’m Still Being Garnished


Dear Steve,

In September of 2016, I had a defaulted student loan that went into wage garnishment. At the time of garnishment, I owed approximately $5000 and additional $2000 in fees and interest for a total of $7000. When the garnishment started I decided to let it go assuming it would be paid in full in 16-18 months. In December 2017, I applied for a loan consolidation for other student loans I had that were not in default. After checking in to all of this, I found that ACS/the agency garnishing my wages stated that I still owed $7000, when at the time they had already garnished over $7300 from my wages. How is this possible? How is this legal? Where do I go for help or answers? When I spoke with ACS about this, they sent me pdf file that listed every garnishment and date. Each garnishment was approximately $250 and It appears that approximately $50 of each went towards interest and fees and $200 went towards principal. However, the balance never decreased.

To add insult to injury, I had to add the full amount to the consolidation. They were paid in full on 2/22/18 and have continued to garnish 2 paychecks since that time.

I Never received any notice other than an initial letter informing me of the garnishment. They should send something informing that regardless of how much money they receive, the loan will never be paid.

Thanks in advance.



Dear Paul,

Without looking at an accounting for your loans it would be impossible for me to guess how your payments are being applied. It is a mystery how the defaulted loans could be added to an existing consolidation. That would not be possible without having the loans out of default and consolidated into a new loan.

So it sounds as if the defaulted loans are still in default and that would explain the continued garnishment.

See also  We Offer Free Legal Advice in Miami. A Client is Being Garnished.

I’m curious if you have explored rehabilitating your defaulted loans so your wage garnishment would stop after five payments and you would be eligible to consolidate those loans out of default and get a lower payment?

If you don’t know about rehabilitation, click here.

You can also login to the National Student Loan Data System and look at how your defaulted loans are being reported.


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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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