The Higher Education Act authorizes the Department of Education's guaranty agencies (General Revenue) to garnish up to 15% of disposable earnings (the amount left after legally required deductions are made). Fair or not, they're completely within their rights.
Three things you can do:
1) Request a garnishment hearing: This can occur even after the garnishment has been placed, and can be done in writing, in person or over the phone. (I would recommend a phone hearing.) Explain your financial situation to the judge, but also offer a consistant repayment plan you can manage in place of the garnishment.
2) Attempt to finances your loans through the William D. Ford program. This may not be possible with the way the economy is (fewer consolidation opportunities are available), and it won't stop your garnishment until the consolidation has funded, but A) It WILL lift the garnishment within 90 days (max); B) It will set you up on an income-contingent repayment plan; C) It will remove the default loan(s) from your credit report within six months.
3) Continue with the nine-month program, if at all possible. This will have a similar effect to the William D. Ford program, lifting the garnishment and removing the default status from your credit report.
Remember, General Revenue doesn't have to work with you. Legally, your husband's loans are due in full ... TODAY. (Actually, the day they defaulted.) While frustrating frightening, you have to look at the situation for what it is. What you need (financial hardship relief), isn't a luxury you're going to get, and is something that General Revenue isn't allowed (by original guarantor of the loan) to even consider.
