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Tax Refund Offsets – be careful before filing your tax return.


Defaulted student loans can have serious consequences on your life.  For example, the U.S. Department of Treasury can garnish your federal and state tax refunds so that you can repay your debt.  The government also employs the use of tax refund offsets in collecting defaulted student loans.

Tax refund offsets can be challenged by requesting a hearing, appealing to the Department of Education.  There are multiple defenses to tax refund offsets, such as having repaid your loan, and permanent disability to the borrower, enabling them from being able to repay their defaulted student loans.  If you are eligible for a closed school discharge or false certification discharge, you may also qualify as a defense to tax refund offset.

Treasury Offset Programs allow the government to garnish money so that you can repay your federal student loan debts.  Garnishment can occur for a variety of government funds, such as federal travel reimbursements and state and federal tax refunds.  Your permission is not required for funds to be taken from you, but you will be given information about the amount and date of your offset.

By defaulting on your student loans, you put yourself at risk for your tax refunds to be taken away.  It is required by law for your guarantor to provide you with notice before offset occurs however.  The notice will note that you have defaulted on your student loan, and a claim is filed against you.  It will also include information such as the rights you as the borrower of the student loan has, ways to prevent tax refund offsets, the procedure of documenting your defaulted student loan, and information on challenging your tax refund offset.

By making off payments and setting up a satisfactory repayment arrangement, you can lessen the chances of having your tax refund seized.  By contacting your guarantor or enrolling with a student loan forgiveness program, you can learn more about how you can recover from defaulted student loans.

Enrolling with a student loan forgiveness program can also help keep you out of default, and get your student loans paid off.  Continue to visit and check back for more tips and help on paying off your student loans.