The order is served on the employer, and that single fact explains most of what surprises people. A garnishment is not a demand on the debtor. It is a direction to a third party who happens to be holding money owed to the debtor, and that third party, the garnishee, becomes the one under legal compulsion. The employer must withhold, must remit, and generally has no discretion. Federal student loan rules say so explicitly: 20 USC 1095a(a)(6) makes an employer that fails to withhold liable for the amount it should have withheld, and allows the government to sue for it plus attorneys' fees, costs and, at the court's discretion, punitive damages. The regulation goes a step further at 34 CFR 34.22(d), directing the employer to disregard any assignment or allotment by the employee that would interfere with compliance, except one made for family support. Asking payroll to stop is therefore not a route, and the employer has no authority to grant it.
Four mechanisms reach wages, and they differ in every respect that matters.
Published material on unsecured debt works through the first row and its exceptions. The point of setting them side by side is that the question "how much can they take" has four different answers, and the one most people have heard is the one that applies only where a creditor has already sued and won.
Administrative wage garnishment is the route with the fewest gatekeepers and the most procedure. Federal student loans in default can be collected by garnishment without any court involvement, but 20 USC 1095a attaches a defined set of borrower rights to that power. The amount deducted for any pay period may not exceed 15 percent of disposable pay unless the borrower consents in writing to more (a)(1). Written notice must be sent to the borrower's last known address at least 30 days before proceedings begin, stating the nature and amount of the obligation, the intention to collect by deduction from pay, and the borrower's rights (a)(2). The borrower may inspect and copy the records relating to the debt (a)(3), may enter into a written repayment agreement instead (a)(4), and may have a hearing on the existence or amount of the debt and on the terms of a repayment schedule (a)(5). The timing of that hearing is the part worth acting on: under 1095a(b), the hearing must be held before a garnishment order issues if the borrower files a petition for one on or before the fifteenth day following the mailing of the notice. Request it later and the hearing still happens, but the garnishment does not wait for it.
Two further protections in the same section are easy to miss. Under 1095a(a)(7), someone reemployed within 12 months after an involuntary separation cannot have anything deducted until they have been continuously reemployed for at least 12 months. And under (a)(8), an employer may not discharge, refuse to employ, or take disciplinary action against a person because of a student loan garnishment, and that person may sue the employer, with attorneys' fees awarded to a prevailing employee and reinstatement, punitive damages and back pay available at the court's discretion.
That protection is materially stronger than the general one, which is a distinction worth carrying. The Consumer Credit Protection Act's job protection at 15 USC 1674(a) says only that "no employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness", with a criminal penalty of up to $1,000 or a year's imprisonment at (b). Read the words: it protects against discharge for the first debt, not the second, and it creates a penalty rather than an obvious private remedy. The student loan provision covers refusal to hire and lesser discipline as well as firing, and gives the employee a court to go to.
When more than one order reaches the same paycheck, they queue rather than stack. The federal student loan regulations set out the arithmetic. 34 CFR 34.19(b) requires the employer to withhold the lesser of the amount in the Department's order or the 15 USC 1673(a)(2) amount, meaning the excess over thirty times the minimum wage. 34 CFR 34.20 then handles competition: unless another federal law requires a different priority, the Department is paid before later orders, but a family support withholding order served at any time takes precedence, and where an earlier order or a support order is already running, the Department's share is capped at 25 percent of disposable pay less the amounts already being withheld. So an existing order can reduce a later one to nothing.
State law sets a floor under all of this, and it is the one point that must be stated in the statute's own words rather than summarized. 15 USC 1677 provides that the federal subchapter "does not annul, alter, or affect, or exempt any person from complying with, the laws of any State (1) prohibiting garnishments or providing for more limited garnishment than are allowed under this subchapter, or (2) prohibiting the discharge of any employee by reason of the fact that his earnings have been subjected to garnishment for more than one indebtedness." The federal cap is therefore a ceiling and not an entitlement, and where a state protects more, the state's rule is the one the employer must observe. How much more, and which states, is a question of state law and is not answered here.
