My employer received a letter from a creditor agency ("Central Research") ordering that they garnish up to 25% of my salary for the loan. The language that they used in the letter to them was unnecessary, they make it sound like I'm some violent thief. Also, what this agency is charging me is very high compared to the loan itself.

Can I pay the Education Department directly and bypass this creditor agency?

What alternatives do I have to pay the ED instead of a creditor?

This is a loan from the U.S. Department of Education. I haven't been able to pay due to economic issues I was having.

This is the first paragraph of the letter:

One of your employees has been identified as owing a delinquent nontax debt to the United States. The Debt Collection Improvement Act (DCIA) permits Federal agencies to garnish the pay of individuals who owe such debt without first obtaining a court order. Enclosed is a Wage Garnishment Order directing you to withhold a portion of the employee's pay each pay period and to forward those amounts to us.

And this is the next section. I recently started with this company, so you can imagine what they must think when these people use "I ORDER YOU" or "you are furthered ORDERED". They use this phrase about five times:

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They even misspelled "hereby":

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Finally, the only detail in the whole letter that they sent my employer that they could not get on their own is my name, SS#, and employer name and address.

  • 1
    Why haven't you been paying your student loans like you should have been?
    – RonJohn
    Dec 17, 2019 at 21:37
  • Is the loan a government loan or a private loan?
    – mkennedy
    Dec 17, 2019 at 21:39
  • 1
    Please add a country tag. Otherwise this question is impossible to answer. Dec 17, 2019 at 21:41
  • 2
    I am not a legal expert, but I would've thought they would need to get an order from a court, and until they do that, the employer isn't required to do anything. I could easily be wrong however. Dec 18, 2019 at 12:58
  • 1
    To add to the comment by @user253751, if there is a court order your employer must comply. If there isn't a court order the collection agency may have broken the law by sending that letter. It's very important that find out if there was a court order and judgement against you. (I'm guessing there is though because I doubt a company would screw up that badly and send the letter if there wasn't.)
    – TTT
    Dec 18, 2019 at 15:47

2 Answers 2


In the US, a student loan in default can go to a collection agency. The collection agency charges a collection fee. Prior to being sent to collections they would have communicated what you could do to avoid collections and having the default status reported to the credit bureaus.

Central Research is a collection agency that the Department of Education contracts with. Wage garnishment is one way they collect.

Unfortunately, this all seems legitimate and is the fallout of ignoring the loans. Ideally you would have entered into an income-based repayment plan at some point, and been in contact with your loan servicer when any difficulty arose.

What you can do now, is contact your loan holder (it may or may not be the collection agency at this point, I'd start with your original loan servicer) and find out what it would take to rehabilitate your loan. By adhering to the loan rehabilitation plan they work with you to create, you can get the loan out of defaulted status and put an end to wage garnishment. I don't believe any fees added by putting the loan into collections would be removed.

Here is a handy reference on Loan Rehabilitation from the Department of Education.

Also, just because they have a right to make debt collection efforts including wage garnishment doesn't mean the collection agency is doing things properly. They often over-step in their collection efforts, so it is useful to read up on what they can and can't legally do. Here's a list of some common problems with student loan collection agencies.

  • Thanks. By "loan holder" do you mean the U.S. Department of Education?
    – Joseph
    Dec 18, 2019 at 16:00
  • It's who you would have been making payments to before the collection agency showed up. If the collection agency is legit, they are your loan holder now; your previous loan holder sold the debt to them rather than continuing trying to collect from you.
    – chepner
    Dec 18, 2019 at 16:03
  • @Joseph Edited that section, I didn't think the collection agencies could own the debt, but they might, I'd start with the original servicer (the people that provided statements before collection activity) and they may direct you to contact the collection agency. In any case you are entitled one chance to rehabilitate a defaulted loan.
    – Hart CO
    Dec 18, 2019 at 17:15

letter … ordering that they garnish

Is the letter simply a threatening letter from the agency, or is it a court order?

If it's a court order, your employer is required to deduct the money from your pay.

very high compared to the loan itself

If you haven't paid it for a while, the interest charges could be quite high.

The court may also have awarded court costs, and other damages.

Can I pay the Education Department directly and bypass this creditor agency?

I don't know specifics of this agency, but many companies sell their debts to other companies. E.g. if someone owes me $10,000 and it's going to cost me a lot to be able to collect it, if at all, I might sell the debt to a collection agency for $6,000 and simply write the loss off as a bad debt.

The collection agency can potentially make a $4,000 profit, or it might get nothing. That's no longer my problem; I now have no legal connection whatsoever with the debt or debtor.

I haven't been able to pay due to economic issues I was having.

In most jurisdictions, the court system doesn't care about why you haven't met your obligations. They will however take you current situation into consideration when determining the amount that they garnish from your wages.

But before all this happened, you should have received notices of the court actions (determination of debt, and determination of financial situation).

If this really is the result of a court action, I suspect that you simply ignored the notices and requests to appear.

  • Thanks. It's a threatening letter from the agency.
    – Joseph
    Dec 18, 2019 at 15:01
  • 2
    Again, the agency can threaten all they want; without a court order to back it up, it's just so much noise. What does the letter actually say?
    – chepner
    Dec 18, 2019 at 16:02
  • I've included the first paragraph of the letter.
    – Joseph
    Dec 18, 2019 at 18:53
  • @Joseph The letter says "Enclosed is a Wage Garnishment Order". Is such an order enclosed?
    – ceejayoz
    Dec 18, 2019 at 20:26
  • They included a filled form SF-349B, which can be downloaded from the treasury site. The agency filled it out: fiscal.treasury.gov/files/forms/SF329.pdf
    – Joseph
    Dec 18, 2019 at 20:42

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