ADMINISTRATIVE WAGE GARNISHMENT (AWG)
On behalf of the federal government, agencies such as TG handle the administration of the Federal Family Education Loan Program (FFELP), including claim payment, compliance with regulations, and collection of defaulted student loans. When a student fails to repay a FFELP loan and the loan enters default (becomes 270 days past due), the holder of the loan files a claim with TG to cover the amount. TG examines the claim and pays the holder if the claim was properly serviced. Once a claim is paid, TG files for reinsurance with the U.S. Department of Education. At the same time, TG begins collection efforts which may include the withholding of wages.
Legislative Authority for AWG
The Emergency Unemployment Compensation Act (P. L. 102-164, as amended by Public Law 109-171, 20 U.S.C. 1095a et seq.) allows TG to garnish up to 15% of the debtor’s disposable pay or the amount permitted by 15 U.S.C. 1673, unless the debtor provides TG with written consent to deduct a greater amount. Employers must garnish an employee’s earnings until the defaulted loan has been repaid in full, or until notified by TG to discontinue withholding. This law supersedes any state’s laws governing wage garnishment.
Procedure for Employers
- Read the Order of Withholding from Earnings (Order). It contains the instructions on how to withhold and pay the required amounts.
- Calculate and deduct the amount to be withheld from the debtor’s pay for the first pay period that occurs after the employer receives the Order. Deductions should occur at every pay period, whether weekly, bi-weekly, semi-monthly, or monthly.
- Remittance can be sent to TG anytime after the deduction is taken, but must be sent at least once each month.
- Repeat steps 2 and 3 each payday.
Download the AWG Employer Handbook for detailed information on the following topics and more:
- Amount of withholding
- How to remit withheld earnings
- Multiple garnishments
- When to stop withholding
- Employer compliance
Inquiries about the AWG process may be submitted by mail, phone, or email:
TG — AWG Team
P.O. Box 83100
Round Rock, TX 78683-3100
(800) 252-9743, ext. 4125
(512) 219-5700 (Round Rock)
(512) 219-4560 (For speech and hearing impaired)
For additional information regarding TG’s authority, you may also contact the U.S. Department of Education
at (800) 872-5327.