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U.S. Code as of:
01/19/04
Section 1095a. Wage garnishment requirement
(a) Garnishment requirements
Notwithstanding any provision of State law, a guaranty agency, or
the Secretary in the case of loans made, insured or guaranteed
under this subchapter and part C of subchapter I of chapter 34 of
title 42 that are held by the Secretary, may garnish the disposable
pay of an individual to collect the amount owed by the individual,
if he or she is not currently making required repayment under a
repayment agreement with the Secretary, or, in the case of a loan
guaranteed under part B of this subchapter on which the guaranty
agency received reimbursement from the Secretary under section
1078(c) of this title, with the guaranty agency holding the loan,
as appropriate, provided that -
(1) the amount deducted for any pay period may not exceed 10
percent of disposable pay, except that a greater percentage may
be deducted with the written consent of the individual involved;
(2) the individual shall be provided written notice, sent by
mail to the individual's last known address, a minimum of 30 days
prior to the initiation of proceedings, from the guaranty agency
or the Secretary, as appropriate, informing such individual of
the nature and amount of the loan obligation to be collected, the
intention of the guaranty agency or the Secretary, as
appropriate, to initiate proceedings to collect the debt through
deductions from pay, and an explanation of the rights of the
individual under this section;
(3) the individual shall be provided an opportunity to inspect
and copy records relating to the debt;
(4) the individual shall be provided an opportunity to enter
into a written agreement with the guaranty agency or the
Secretary, under terms agreeable to the Secretary, or the head of
the guaranty agency or his designee, as appropriate, to establish
a schedule for the repayment of the debt;
(5) the individual shall be provided an opportunity for a
hearing in accordance with subsection (b) of this section on the
determination of the Secretary or the guaranty agency, as
appropriate, concerning the existence or the amount of the debt,
and, in the case of an individual whose repayment schedule is
established other than by a written agreement pursuant to
paragraph (4), concerning the terms of the repayment schedule;
(6) the employer shall pay to the Secretary or the guaranty
agency as directed in the withholding order issued in this
action, and shall be liable for, and the Secretary or the
guaranty agency, as appropriate, may sue the employer in a State
or Federal court of competent jurisdiction to recover, any amount
that such employer fails to withhold from wages due an employee
following receipt of such employer of notice of the withholding
order, plus attorneys' fees, costs, and, in the court's
discretion, punitive damages, but such employer shall not be
required to vary the normal pay and disbursement cycles in order
to comply with this paragraph;
(7) if an individual has been reemployed within 12 months after
having been involuntarily separated from employment, no amount
may be deducted from the disposable pay of such individual until
such individual has been reemployed continuously for at least 12
months; and
(8) an employer may not discharge from employment, refuse to
employ, or take disciplinary action against an individual subject
to wage withholding in accordance with this section by reason of
the fact that the individual's wages have been subject to
garnishment under this section, and such individual may sue in a
State or Federal court of competent jurisdiction any employer who
takes such action. The court shall award attorneys' fees to a
prevailing employee and, in its discretion, may order
reinstatement of the individual, award punitive damages and back
pay to the employee, or order such other remedy as may be
reasonably necessary.
(b) Hearing requirements
A hearing described in subsection (a)(5) of this section shall be
provided prior to issuance of a garnishment order if the
individual, on or before the 15th day following the mailing of the
notice described in subsection (a)(2) of this section, and in
accordance with such procedures as the Secretary or the head of the
guaranty agency, as appropriate, may prescribe, files a petition
requesting such a hearing. If the individual does not file a
petition requesting a hearing prior to such date, the Secretary or
the guaranty agency, as appropriate, shall provide the individual a
hearing under subsection (a)(5) of this section upon request, but
such hearing need not be provided prior to issuance of a
garnishment order. A hearing under subsection (a)(5) of this
section may not be conducted by an individual under the supervision
or control of the head of the guaranty agency, except that nothing
in this sentence shall be construed to prohibit the appointment of
an administrative law judge. The hearing official shall issue a
final decision at the earliest practicable date, but not later than
60 days after the filing of the petition requesting the hearing.
(c) Notice requirements
The notice to the employer of the withholding order shall contain
only such information as may be necessary for the employer to
comply with the withholding order.
(d) No attachment of student assistance
Except as authorized in this section, notwithstanding any other
provision of Federal or State law, no grant, loan, or work
assistance awarded under this subchapter and part C of subchapter I
of chapter 34 of title 42, or property traceable to such
assistance, shall be subject to garnishment or attachment in order
to satisfy any debt owed by the student awarded such assistance,
other than a debt owed to the Secretary and arising under this
subchapter and part C of subchapter I of chapter 34 of title 42.
(e) "Disposable pay" defined
For the purpose of this section, the term "disposable pay" means
that part of the compensation of any individual from an employer
remaining after the deduction of any amounts required by law to be
withheld.
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