The U.S. Department of Education partners with both guaranty agencies and the U.S. Department of Justice across U.S. States and territories to help make the Administrative Wage Garnishment program a success.

Guaranty agencies handle the administration of the loan program at the state level on behalf of ED, including the loan guarantee, claim payment, compliance with student loan regulations, and collection of defaulted loan. When a student fails to repay the loan and enters default (becomes 180 days past due), the holder of the loans files a claim with the guaranteed agency to cover the amount. The guaranty agency examines the claim to ensure that it was properly serviced by the lender and pays the lender. Once a claim is paid, the guaranty agency files for re-insurance on the loan with ED. At the same time, the guaranty agency collection efforts, including everything from phone or letter contacts to withholding IRS refunds, from defaulted borrowers.

The U.S. Department of Justice conducts all U.S. Department of Education employers and borrowers lawsuits in Federal Court.  It represents the Government in legal matters rendering legal advice and opinions, upon request, to the President and to the heads of the executive departments. The affairs and activities of the Department are generally supervised and directed by the Attorney General.