What Happens to Student Loan Wage Garnishment if Your Salary Increases?

If you have a student loan wage garnishment and your wages increase, there could be a change in the amount the government takes from your paycheck each time you get one. The government bases the amount of the wage garnishment on the amount of disposable income—that is, the income left over after taxes and other legally required deductions, such as social security and medicare.

What’s the Maximum Garnishment Amount?

If your disposable income is higher than $290 a week, up to 25% of the disposable income can be garnished. If you don’t make this much a week, you face garnishment of any amount greater than 30 times the federal minimum wage, currently $7.25 an hour or $217.50. 

If for any reason, you are having child support garnished for up to 50% of your disposal income if you are supporting another child or spouse, and up to 60% if you are not, with an additional 5% garnished for those who are 12 or more weeks behind, your student loan wage garnishment will be denied because you are already at the maximum legally allowed garnishment.

How Does the State Affect the Federal Amount?

Depending on the state you live in, there may be a different law in regards to the maximum amount of for student loan wage garnishment. If the state’s limit is less than the 25% federal limit, the lesser of the two garnishment amounts will be applied. For example, if the state you live in does not allow more than 15% of your disposable income to be garnished from your paycheck, then you will only see a 15% garnishment instead of the maximum 25%.

How Will a Better Paying Job Affect the Garnishment Amount?

No more than 25% of your disposable income will be garnished for student loan debt. It doesn’t matter how much more your job pays, because it just means more money is going to go to the debt and pay it off faster. If you are having issues with the amount of the garnishment, you could speak to the Wage and Hour Division of the Department of Labor.

Example Wage Garnishment Scenarios

  • If you make $217.50 or less a week in disposable income, your wages cannot be garnished for student loans.
  • If you make $290 a week in disposable income, you could see $72.50 a week in garnishments.
  • If you make $400 a week in disposable income, you could see $100.00 a week in garnishments.

How Wage Garnishment Affects Job Security

Though the Consumer Credit Protection Act, your employer cannot fire you for having a debt garnished from your paycheck. they can however, choose to fire you if two or more garnishments are processed separately. The law does not stop them from firing you at that point.

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