Federal Student Loan Defense Attorney Serving New York and Nassau County

Federal student loan default is one of the few situations in consumer debt law where a creditor — the U.S. Department of Education — can garnish your wages, seize your tax refund, and offset your Social Security benefits without going to court first. There is no lawsuit, no summons, no 20-day window to respond. The consequences begin automatically once a loan reaches default status.



The options to stop them exist. They are specific, procedurally demanding, and time-sensitive. Aronow Law P.C. has navigated federal student loan defense for Nassau County and Long Island clients for 23+ years.

Federal Loan Garnishment Happens Without a Court Order — It Can Also Be Stopped   •   Rehabilitation and Consolidation Are the Primary Tools for Exiting Default   •   Hardship Discharge Through Bankruptcy Adversary Proceeding Available in Qualifying Cases   •   Student Loan Defense Handled Alongside Bankruptcy in a Single Engagement   •   Free Consultations With No Time Limit

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Understanding how agreement—or conflict—shapes the process.

Filing Chapter 7 stops a wage garnishment immediately through the automatic stay. But if the garnishment stems from a judgment creditor, the underlying judgment remains on the record until it is formally avoided or discharged. Aronow Law handles the full resolution — not just the filing.



For clients carrying student loans alongside dischargeable debt, Aronow Law assesses both in a single engagement. Federal student loans survive Chapter 7 in most cases, but filing can still provide meaningful relief by eliminating all surrounding unsecured debt and freeing up income to address loans directly. In some cases, an adversary proceeding for hardship discharge of student loans may also be worth evaluating.

If you have a suspended vehicle registration alongside your debt issues, that can also be addressed as part of the same engagement.

What Chapter 7 Cannot Discharge

What Federal Student Loan Default Actually Does to You

A federal student loan enters default after 270 days of missed payments. Once that threshold is crossed, the consequences that follow do not require a court order or a lawsuit. The Department of Education — or a guaranty agency on older FFEL loans — can act administratively.


Default consequences include:


  • Administrative wage garnishment: Up to 15% of disposable income withheld directly from your paycheck, without a court proceeding
  • Federal tax refund seizure: Your federal tax refund — and in some cases your state refund — intercepted and applied to the loan balance
  • Social Security offset: For borrowers receiving Social Security benefits, up to 15% of monthly benefits can be withheld
  • Loss of repayment plan eligibility: Income-driven repayment plans, deferment, and forbearance are unavailable to loans in default
  • Loss of eligibility for additional federal aid: Borrowers in default cannot receive new federal financial aid for education


The credit impact of default is also significant and long-lasting. Unlike most collection actions, federal student loan default has no statute of limitations — the government can pursue collection indefinitely until the debt is resolved.

How Federal Student Loan Default

Is Resolved

Loan Rehabilitation — Exit Default and Remove the Default Record

Rehabilitation is the only way to remove a default notation from your credit report for a federal student loan. The process requires making nine voluntary, on-time monthly payments within a ten-month period, at an amount determined by your income and expenses. Once rehabilitation is complete, the default status is removed from your credit history, wage garnishment stops, and you regain eligibility for income-driven repayment plans and other federal programs.



The amount of each rehabilitation payment is negotiable and is calculated based on a percentage of your discretionary income — for many borrowers, this results in a very low monthly payment during the rehabilitation period. Aronow Law negotiates the rehabilitation payment amount and manages the process through completion.

Direct Consolidation — A Faster Exit From Default

Federal Direct Consolidation can resolve a defaulted loan faster than rehabilitation — often within 30 to 90 days — by combining the defaulted loan into a new Direct Loan and simultaneously enrolling in an income-driven repayment plan. The default status is resolved, wage garnishment stops, and the new loan enters repayment immediately. The tradeoff is that consolidation does not remove the default notation from your credit report the way rehabilitation does.



For borrowers facing active wage garnishment or an imminent tax refund seizure, consolidation is often the faster tool. Aronow Law evaluates which path — rehabilitation or consolidation — produces the better outcome based on timing, credit impact, and long-term repayment goals.

Income-Driven Repayment — Managing Payments After Default Is Resolved

Once a defaulted loan is rehabilitated or consolidated, income-driven repayment plans become available again. IDR plans cap monthly payments at a percentage of discretionary income — as low as zero dollars per month for borrowers below certain income thresholds — and provide a path to loan forgiveness after 20 to 25 years of qualifying payments, depending on the plan. Aronow Law evaluates which IDR plan is appropriate given your income, family size, and loan types, and assists with enrollment and annual recertification.

Can Federal Student Loans Be Discharged in Bankruptcy?

Federal student loans survive most bankruptcy filings. The standard test — the Brunner test, applied in the Eastern District of New York and most federal circuits — requires a borrower to prove three things to obtain a hardship discharge:


  1. That repaying the loan would prevent the borrower from maintaining a minimal standard of living based on current income and expenses
  2. That the financial circumstances causing the hardship are likely to persist for a significant portion of the repayment period
  3. That the borrower has made good faith efforts to repay the loan


This is a difficult standard to meet, but it is not an impossible one. Borrowers with permanent disability, severely limited earning capacity, or long-term financial circumstances that make any realistic repayment path unavailable have succeeded in obtaining hardship discharges in EDNY adversary proceedings.



For clients whose circumstances do not meet the Brunner standard, bankruptcy can still provide meaningful relief. Discharging surrounding unsecured debt — credit cards, medical bills, creditor judgments — through Chapter 7 eliminates competing obligations and frees up income to address student loans through IDR or rehabilitation after discharge.


Aronow Law evaluates whether the facts of each client's situation support pursuing a hardship discharge adversary proceeding, and handles that proceeding within the bankruptcy engagement if the analysis supports it.

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Frequently Asked Questions About Federal

 Student Loan Defense in New York

  • What happens if I default on federal student loans in New York?

    After 270 days of missed payments, your loan enters default. At that point, the Department of Education can garnish up to 15% of your wages without a court order, seize your federal tax refund, offset Social Security benefits, and terminate eligibility for income-driven repayment plans and new federal aid. These consequences begin administratively — no lawsuit or court proceeding is required. They can be stopped through rehabilitation or consolidation, but the process for doing so is strict and time-sensitive.

  • Can my wages be garnished for federal student loans in New York?

    Yes — and unlike a private creditor, the federal government does not need a court judgment to begin garnishing your wages. Administrative wage garnishment begins automatically once a federal loan enters default. Up to 15% of your disposable income can be withheld from each paycheck. Loan rehabilitation or consolidation stops the garnishment, typically within 30 to 90 days of beginning the resolution process. Aronow Law initiates that process immediately and manages it through the point where garnishment ceases.

  • Is there a federal student loan attorney near me in Nassau County?

    Yes. Aronow Law P.C. is located at 7600 Jericho Turnpike, Suite 115, Woodbury, NY — in Nassau County — and handles federal student loan defense for clients across Long Island and the five boroughs. Federal student loan defense is handled as part of the same engagement as bankruptcy or other debt matters, without requiring a separate firm for each issue.

  • What is the Brunner test for student loan discharge in bankruptcy?

    The Brunner test is the legal standard used in the Eastern District of New York to determine whether a federal student loan qualifies for hardship discharge in bankruptcy. It requires proving that repayment would prevent a minimal standard of living, that the hardship is likely to continue over the repayment period, and that the borrower has made good faith efforts to repay. Meeting all three prongs is difficult but achievable for borrowers with permanent disability, severe income limitations, or long-term circumstances that make any realistic repayment path unavailable. Aronow Law evaluates whether the Brunner standard is met as part of every bankruptcy engagement involving student loans.

  • Can I stop a federal student loan garnishment quickly?

    Yes, in most cases. Initiating Direct Consolidation is typically the fastest route — consolidating the defaulted loan into a new Direct Loan while enrolling in an income-driven repayment plan can stop the garnishment within 30 to 90 days. Rehabilitation takes longer — nine payments over ten months — but removes the default notation from your credit report, which consolidation does not. Aronow Law evaluates which option fits your timeline and long-term goals and begins the process as quickly as possible after the initial consultation.

The Garnishment Can Be Stopped. The Default Can Be Resolved. Let's Start.

Federal student loan default has a defined resolution process. It is strict, time-sensitive, and consequential if mishandled — but it is navigable with an attorney who knows it. Aronow Law serves Nassau County and Long Island clients from the firm's Woodbury, NY office, handling federal student loan defense alongside bankruptcy and every other debt matter the firm takes on. The consultation is free and has no time limit.