Of course, this difference in collection powers leads to the question of:
Why can the federal government start wage garnishment without a court order?
The answer comes down to power.
Congress gave the federal government the power via federal law to start an administrative wage garnishment once you default on a federal loan. It did not give that power to holders of private student loans.
What’s an Administrative Wage Garnishment
It’s a garnishment of your wages pursuant to administrative order (that is to say, rules set in administrative guidelines) rather than court order.
This fundamental difference in collection powers makes private student loan debt a better candidate for favorable settlements than federal student debt.
Last year, I settled over a million dollars in student loans. What I learned doing that is this: private student loans regularly settle for less than 60% of the loan balance. That’s much better than the 90% typically seen with federal loan debt.
So while student loans don’t settle for pennies on the dollar like credit card debt that’s been sent to a collection agency, you can save thousands (depending on your loan amount and interest rate).
Private Student Loan Collection Powers
Now that we’ve established you can’t be garnished for your private loans until you lose a lawsuit, the next worry is what other collection powers do private loan holders have?
Depending on state law, once a court order is entered, money may be taken out of your bank account via a levy and a lien may be placed on your home or other real property you own.
While a lien might make it difficult to refinance or sell your home, you have no risk of going to jail.
You won’t go to jail for not paying your student loans.
Nor do you have to worry about your tax refund or social security benefits being taken. That’s only something the federal government can do after a federal student loan default.
How to Stop Wage Garnishment for Private Loans
Once you’re being garnished for a private loan, your options to stop it are limited.
Unlike with federal student loans, you can’t set up voluntary payments, enter into loan rehabilitation, or apply for a consolidation loan. Private student loan rehabilitation isn’t a thing. And the same is true for the other student loan repayment options.
Related: How to Stop a Student Loan Wage Garnishment Quickly 
Instead, you can try:
- Paying off the loan balance (even if you have to get a new loan).
- Asking for a repayment plan instead of being garnished.
- Filing bankruptcy.
On its own, the bankruptcy may not get rid of the loan, but it will stop the garnishment. To get rid of the loan, you’ll have to file an adversary petition to discharge the debt.