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Texas Payroll/Personnel Resource

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Mandatory Deductions
Student Loan Garnishments

Agency/Institution Compliance

A state agency or an institution of higher education must comply with an order to garnish the disposable pay of an individual who is not currently making required repayments of a guaranteed student loan.

The order may be issued by a guaranty agency (such as the Texas Guaranteed Student Loan Corporation) or a private entity with which a guaranty agency has contracted to collect the loan or the secretary of education.

An agency or institution that fails to comply is liable for the amount not withheld plus attorneys’ fees, costs and possibly punitive damages.

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Garnishment Amount

The amount of the garnishment may not exceed 15 percent of the individual’s disposable pay. A greater percentage may be deducted from disposable pay with the individual’s consent.

The amount withheld from an individual’s disposable pay should be made payable to the guaranty agency or other payee listed on the garnishment order. A Texas identification number (TIN) has been established for each guaranty agency or payee that is established with the Comptroller’s office. See Student Loan Wage Garnishments Payee List (login required). The guaranty agency will notify an agency or institution when to stop student loan garnishment orders.

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If An Agency or Institution Receives an Order

If an agency or institution receives an order involving a new payee, the agency or institution should contact the Fiscal Management Division at the Comptroller’s office so a TIN for that payee may be established.

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Additional Resources

To learn more about this payroll deduction, see Chapter 9 “Deductions” of the USPS Process Guide or the SPRS Deduction Code Table.

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Definition

Disposable pay
The part of an individual’s compensation from an employer that remains after the deduction of any amounts required by law to be withheld.

Sources

United States Code, Title 20, Section 1095a(a), (e) (West 2000); Texas Government Code, Section 659.002(d) (Vernon 2004).

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