Current Status Bill Number:4913 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19980331 Primary Sponsor:Boan All Sponsors:Boan Drafted Document Number:BBM\9800MM.98 Residing Body:House Current Committee:Ways and Means Committee 30 HWM Subject:Student loans, defaulting on; garnishment of wages, when; Colleges and Universities, Tuition, Employment Security
Body Date Action Description Com Leg Involved
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House 19980331 Introduced, read first time, 30 HWM
referred to Committee
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TO AMEND ARTICLE 1, CHAPTER 111, TITLE 59, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO EDUCATIONAL SCHOLARSHIPS AND LOANS, BY ADDING SECTION 59-111-70 SO AS TO PROVIDE FOR GARNISHMENT OF THE WAGES OF AN INDIVIDUAL WHO DEFAULTS ON A STUDENT LOAN AGREEMENT WITH THE SOUTH CAROLINA STUDENT LOAN CORPORATION OR THE STATE EDUCATION ASSISTANCE AUTHORITY; AND TO AMEND SECTION 59-115-50, RELATING TO POWERS OF THE STATE EDUCATION ASSISTANCE AUTHORITY, SO AS TO PROVIDE FOR GARNISHMENT OF THE WAGES OF ONE WHO DEFAULTS ON A STUDENT LOAN AGREEMENT WITH THE AUTHORITY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 1, Chapter 111, Title 59 of the 1976 Code is amended by adding:
"Section 59-111-70. (A) For the purpose of this section:
(1) 'Claimant entity' means the South Carolina Student Loan Corporation, referred to as the 'corporation', or the State Education Assistance Authority, referred to as the 'authority', in the case of loans made, insured, or guaranteed by the corporation or the authority, or a guaranty agency, or the United States Secretary of Education in the case of loans made under the Federal Family Education Loan Program.
(2) 'Guaranty agency' means a state or private nonprofit organization that has an agreement with the United States Secretary of Education under which it will administer a loan guarantee program pursuant to the Federal Higher Education Act of 1965, as amended.
(3) 'Disposable pay' means that part of the compensation of an individual from an employer which remains after the deduction of any amounts required by law to be withheld.
(4) 'Employer' means a person, business, or the State of South Carolina and all of its departments, agencies, subdivisions, institutions, or political subdivisions that hires one or more persons to work for wages or salary.
(B) Notwithstanding any other provision of law, the claimant entity may garnish the disposable pay of an individual to collect the amount owed by an individual who is not making payments required by a repayment agreement with the claimant entity.
(1) The amount deducted from a pay period may not exceed ten percent of disposable pay, except that a greater percentage may be deducted with the written consent of the individual involved.
(2) The individual must be given written notice, mailed by the claimant entity to the individual's last known address, at least thirty days before initiation of proceedings to garnish his disposable pay. The notice must state:
(a) the nature and amount of the loan obligation;
(b) the intention of the claimant entity to initiate proceedings to collect the debt through deduction from pay;
(c) the individual's right to a hearing on the issues of existence and amount of the debt, and administrative appeal procedures available to the individual; and
(d) alternatives available to the individual which may prevent garnishment.
(3) The individual must be given an opportunity to inspect and copy records relating to the debt.
(4) The individual must be given an opportunity to enter into a written agreement, pursuant to terms agreeable to the claimant entity, to establish a schedule for the repayment of the debt.
(5) The employer must make payments to the claimant entity as directed in the order of withholding issued in the garnishment action.
(C) The notice of the order of withholding to the employer may contain only the information necessary for the employer to comply with the order.
(D) An employer may not discharge from employment, refuse to employ, or take disciplinary action against an individual because his wages are withheld in accordance with this section. The court shall award attorney's fees to an employee who prevails in an action against an employee pursuant to this subsection, in addition to other remedies."
SECTION 2. Section 59-115-50 of the 1976 Code is amended by adding:
"(i) To garnish the disposable pay of an individual to collect the amount owed by him if he is in default on a repayment agreement with the Authority, subject to the provisions of Section 59-111-70."
SECTION 3. This act takes effect upon approval by the Governor.