I’m Getting Hit With a Federal Offset Deduction for my Parent PLUS Loan


Dear Steve,

I am paying Parent Plus college loan in default.

I have had 50 months of federal offset deductions totaling about $10,000 over the last 4 1/2 years. The Dept of Ed ((through ECMC – federal guarantor company) says they have not received any payments. They are now threatening Wage Garnishment. I work Part time and make $11,000 a year.

Can they do this? Can Federal offset deductions and wage garnishment be paid at the same time?




Dear Mark,

For defaulted federal student loans you can certainly have an administrative wage garnishment but that is not what it seems you have because you mention that might be coming.

So to be brutally honest, I have no freaking clue what your “federal offset deductions” were for unless you initially received specific notice they were for a debt owed to another federal agency and you are a federal employee and you owe another federal branch and that is how the deductions originated.

First off, if your Parent PLUS loans are in default you should absolutely rehabilitate them. This is something you only get to do once. But it will bring the loan back into a good standing and you can then enroll the loan into an Income Contingent Repayment plan. Your satisfactory monthly payment could be as low as zero dollars a month.

I would certainly look into rehabilitating the loans as soon as possible. You can click here for more information on rehabilitation and benefits.

As far as the lack of recorded payments, this could easily be an administrative error as a result of an interagency payment transfer. I would suggest contacting the Department of Education Ombudsman office first for assistance to get to the bottom of this.


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Steve Rhode

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