34 CFR 34.30 - Application of payments and accrual of interest.
We apply payments received through a garnishment in the following order -
(a) To costs incurred to collect the debt;
(b) To interest accrued on the debt at the rate established by -
(1) The terms of the obligation under which it arises; or
(2) Applicable law; and
(c) To outstanding principal of the debt.