How do go about declaring economic Hardship on a 8 yr old student loan?

Probably not. Declaring economic hardship is usually done while applying for a deferment or forbearance--a process that permits a borrower to postpone payments for awhile, usually as a result of a temporary situation such as a period of unemployment. It isn't intended to be used to avoid wage garnishment on a defaulted loan. If the loan is a federal student loan, once it has gone into default and been assigned to a collector, the entire balance becomes due and payable and the borrower loses the right to pay in payments or put the loan into deferment. This is clearly set out in the terms of the loan listed on the Master Promissory note that the borrower signs, and is also covered in the entrance and exit counseling that every federal student loan borrower is required to complete.

There are a number of options that your friend could have used before going into default, including income contingent payment plans that could have resulted in a payment as low as $1.00 per month. Your friend apparently had 8 years in which to either repay the loan or make arrangements for a payment plan with the lender. The fact that he didn't do either indicates that he can't be trusted to voluntarily repay, so that decision has been taken out of his hands through wage garnishment. From this point on, the only option is to declare bankruptcy and hope that a court will discharge the loan. However, that is highly unlikely because this usually only happens if the borrower has a good reason why he isn't unable to make any payment at all--something that isn't true in this case because the borrower is working and has an income that can be garnished.

The wage garnishment may be making it impossible for you to pay other bills, but why should those debts take priority over this one? A bill that you haven't made a payment on in 8 years will generally come before one that is more recent, such as this month's electric bill. To solve that problem you have 2 choices: 1) Reduce spending (move to a less expensive rent, buy cheaper groceries, eliminate luxuries like a cell phone, cable TV, eating out, etc.) or 2) Increase your income (get a second job, take on a roommate, sell stuff on Craig's list.....).

I'm sorry I couldn't give you an easier out. It's always difficult when the hammer finally comes down, but your friend pretty much created this mess, so now it's up to him to work his way out of it over time.

Once a student loan has gone into administrative wage garnishment, there is *nothing* you can do but pay the debt. When wage garnishment papers are sent, there is information about how to contest the garnishment but that requires going to court. You have to take paperwork in at that time to prove economic hardship would be caused by the garnishment. The student loan is a bill too and must be paid. There is NO way around it. Garnishment will continue until the loan is paid in full. It is too late to "work out a payment plan". That was done for 8 years and your "friend" didn't comply.

My wages were garnished for 3 years before I was able to start making voluntary payments on top of the garnishment and get the loan out of default. There truly is no way out of it except to pay. Period.

Probably not. I'm going to guess that they're garnishing wages because you never made a payment. The court said they could because by their measurements, you have enough money to pay the monthly garnishment payment.

If like many other people, it's about budgeting and not bills, you need to start cutting the fat, and now. Don't make excuses. Breathe. Then cancel your cable, stop eating out, don't get your hair cut/done, no manicures, and more. You can do this, you just need to regroup. If at all possible, talk to someone who seems to be thrifty/good with money. Humbly ask for help. It can be done. Good luck.