For anyone getting a refund, tax season is the best time of year. But for those who have defaulted on their federal student loans, their potential joy can be seized by the IRS to pay down the federal debt.
It may not currently be tax season, but it’s never too early to start preparing to secure that refund. Specifically, if you have federal student loans that you’re behind on, it’s in your best interest to get in good standing before the Department of Education decides to collect your tax refund.
If you’re worried about the IRS taking your tax refund, you’re in the right place.
Note: Due to the coronavirus, the Department of Education is stopping tax offsets, and issuing refunds to those who received an offset. See this press release.
If you're not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.
2020 Coronavirus Emergency Relief For Offsets And Garnishments
Effective March 13, the President declared a state of emergency due to the coronavirus. As part of those measures, the Department of Education is suspending student loan collections after that date.
Any collection activity that happened after March 13 will receive a refund. It's unclear if anything before that date will receive anything, but it doesn't appear to be so.
Furthermore, collection activity is stopping for at least 60 days from March 13. So, if you're planning to file your taxes to get your Coronavirus stimulus check or tax refund, you are safe during this period.
See all the loan help options during the emergency here.
The Basics of Tax Offsets
First, tax offsets are legal. The Treasury Offset Program, created in 1986 and overseen by the Bureau of Fiscal Service, allows departments of the federal government to request that the IRS seize tax refunds to pay down debt owed to the federal or state governments.
Unlike for private loans, the federal government doesn’t need permission from anyone to garnish your earnings, including your tax refund, if you have defaulted on your federal student loans.
In the case of federal student loans, the Department of Education may send the Treasury a request to seize your tax refund to put toward defaulted loans. If they do this, they can take your entire tax refund. If the debt is paid off and any amount of your refund remains, it will be returned to you.
If you have a spouse with whom you file your taxes jointly, the IRS can seize the entire joint tax return, even if your spouse is not connected to your federal student loan. However, it is possible to get your spouse’s portion of the refund returned to him or her.
It’s important to note that, because there is no statute of limitations for federal loans, the IRS can offset your taxes for every year your federal student loans are in default.
Fortunately, the IRS is legally required to notify you by mail of their proposal to offset your taxes and allow you some time to respond.
If you have federal student loans that are in default, you may receive a letter in the fall notifying you that the IRS plans to take your potential tax refund and apply it to your education debt. The letter will include information about your loans and instructions on how to proceed.
Once you get the letter, you can do one of three things:
1. Request a review to challenge the offset.
2. Agree to pay the debt.
3. Do nothing.
Request a Review to Challenge the Offset
First, check all the information in the letter against your records and your loan accounts. You can even request an official copy of your loan information from the Department of Education. If anything looks incorrect, you have the right to request a review hearing, where you’ll have the opportunity to prove that your taxes should not be offset.
Here are some common reasons you might request a review hearing:
Challenging the offset can be difficult, so you need very compelling proof. If you’re set on this course of action, consider hiring a lawyer and the costs of doing so.
Agree to Pay the Debt
If you've agreed that you owe the debt, that doesn't mean that you are expected to pay all of it all at once. You certainly pay if all if you are able, but we're guessing that if you're here, you're not able to do that.
Instead, you can enter into a written agreement with the Department of Education to pay the debt. How will you pay the debt? First, you'll need to take steps to remove your loans from default. That could include default rehabilitation or consolidation.
After that, we suggest looking into federal repayment plan options so you avoid defaulting again in the future.
Of the various repayment plans offered by the Department of Education, borrowers who default would likely benefit most from income-driven repayment plans. In those plans, your payment amount is calculated each year based on your income and family size and can be as low as zero. Plus, after 20 to 25 years, any remaining balance is forgiven.
Of course, do thorough research before enrolling in any repayment plan. None of them are one-size-fits-all so make sure the one you choose works for your situation.
Do Nothing
If you choose not to take action, miss the deadlines to take action, or never received a letter warning you of the proposed tax offset, the IRS will take your tax refund. Thankfully, you’re not completely out of luck at this point.
If you believe your refund was taken in error, you can reach out to the Department of Education (not the IRS) to contest the offset. See the list above of common reasons to request a review hearing for the types of errors that would get your refund returned to you.
If your refund was not taken in error but you can prove financial hardship, you may be able to get at least a portion of the refund returned to you. This method is very difficult and is not guaranteed to be successful.
If you filed your taxes jointly with your spouse, he or she can file an “injured spouse” claim to get his or her portion of the tax refund returned. Learn more about filing Injured Spouse Form 8379 here.
Private Loan Tax Offset
If you have private loans and you fall behind, you don’t have to worry about not getting your tax refund; collectors of private loans have no way to seize the refund. However, your private loan servicer can take action to collect your loans much sooner than federal servicers can. Unlike federal servicers that can’t take collection action until loans are 270 days past due, private servicers can take collection action as soon as you’re late on just one payment.
If your private loans are delinquent, your private loan servicer can sue you for the ability to garnish your wages and freeze your bank account. Court approval is the only way a private servicer can take your earnings, so you have a much better chance of preventing it if you show up to court with a good defense.
How to Prevent Tax Offsets
If you’re approaching or in default on your federal student loans, it’s best to take action so they are not still in default come tax season. That means either curing the default through default rehabilitation or consolidation or entering into a repayment plan with more affordable monthly payments so you can work to stay current.
If you're not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.
We break down the process to get out of default here: How To Get Out Of Student Loan Default In 5 Easy Steps.
We'd appreciate hearing your thoughts and experience in the comments below.
Katie Brazis helps people get out of student loan debt. She is frugal with her personal finances and keeps a meticulous budget. She is a reader, a gamer, and an aspiring optimist.
Carmaletha Pointer says
So I called the offset number to see who I owe it says I only owe one dept and that’s child support but it didn’t say anything about my student loan am I safe
Robert Farrington says
If you have an offset (for loans or child support), they can take any Federal payment, including your tax return.
Angiegax says
The department of Education stopped my rehabilitation program after 4 months I spoke with them and they say my application is being viewed and I asked them if my taxes were going to be taken and she says no. I filled out and application for my student loan to be forgiven completely because I had received a settlement from the school I attended for being mislead and promises that were made. Is it possible for me to still get my taxes if I call the offset number and it says I have no offsets and could my student loan be completely forgiven?
Robert Farrington says
If you’re still technically in default (according to your credit report), you run the risk of an offset. What harm does it make to sort out your loan issues first, then file your tax return?
Myles Gallegos says
I went to college america in 2008. For computer science was told that I could get a good job if I were to get a degree in computer science and therefore make a future for myself fixing the mistakes I had made with the law well come to find out it would be nearly impossible to get a job in the career i was studying for with the felonies I have on my record. And then I find the credits from that school do not transfer if you wanted to go to a 4 year college. A lot went on there and I stopped going there. Well now that I filed my taxes this year I have an offset and they said they are taking my whole refund which I really need to take care of shit off notices and my daughters disabled. I want to go back to school though just not go through that school or that program I was studying for do you think they would give my loan back to finish school and give me at least half my refund back. And the other thing is college america only informed me about a Pell Grant for 3500 I was never aware of these other loans I think they were eefl or something
Robert Farrington says
Follow the directions above in the article. You’re not likely to get your refund back, but you can take steps to avoid this going forward.
Sall says
My student loans were in default,I started to work with a credit repair company and noticed the was a discrepancy with my student loans on my credit such as length of time I attended the school and the school saying I could obtain a job with my criminal record but obviously I cannot,I filed Jan 29, but disputed my student loans afterward, st first it said my refund was being deposited in Feb 27th now is saying it’s being used to pay for my loans, hows can that be when they are on forbearance while my case is being reviewed by the DOE?
Robert Farrington says
If you’re actuslly in forbearance they shouldn’t offset your tax return. However, are you sure your loans are in forbearance as of Feb 27? I would check your loans online at the NSLDS and see. If they are truly in forbearance, then you can dispute the offset.
Katre w says
Last year they took my refund so I enrolled into a payment plan I’ve been paying for about 6 months now will I get my refund back next year
Robert Farrington says
We recommend completing the rehabilitation program completely before filing your taxes. Given that takes 9 months, plus one month for your first payment under your new payment plan, that’s 4 more months to go! So file your taxes in March next year!
Cantrell Quanciene WilsonBarney says
My loan is in offset but i didnt get a letter and its not on my credit report either o found out when I called the tax number now I did talk to student loan so I can get a consolidation made my first payment waiting on paper work for my consolidation after I feel out my consolidation paper work and fax it will ill be out of default so I can get my taxes done. Or i meet will the offset be lifted
Robert Farrington says
You need to wait until it’s processed and you make your first payment under your new repayment plan. Then you’re safe. It can take upwards of 60 days for this to happen.
Dayna Norton says
What if my credit report says im in good standing but Dept of edu says I’m not
Robert Farrington says
It can take time to update your credit report. Only you know if you’re in default. If you’re in default, don’t game it – you’re getting your refund taken. Get out of default.
Hope says
I was told due to the coronavirus that the IRS wasn’t taking tax refunds but I filed a wk ago & just got a offset letter. What do I do?
Robert Farrington says
They won’t be and they’ve ceased collection activity due to student loan debt. See this: COVID-19 Student Loan Assistance Programs.
Chance are, the IRS system still needs updating.
Alyssa says
Even though I am in offset, can I file my taxes today and see my refund because of the Coronavirus?
Robert Farrington says
If you have an offset for student loans, yes, you’re safe right now to file and won’t see a garnishment.
However, you should also use this time to get out of default – since there are no payments due.
Jeremy says
What school did you go to if I may ask? I want to start looking into doing the same thing.
Robert Farrington says
Check out this article: https://thecollegeinvestor.com/18752/understanding-borrower-defense-repayment/
Amber says
Can you please elaborate on the school being misleading, and making promises? Also what, where, when, and who, did you talk to to accomplish a win in your favor? I ask because now I have a student loan for what i feel the same as yours wasted time wasted money and no degree nothing to show for the 16,000 I have to pay back. Because I was lied to. Thank you
Robert Farrington says
You can read this: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/borrower-defense
Shanice says
Hello my I ask what college did you attend to receive a settlement for being misled?
kevin says
My Last years refund was offset, i also was in a wage garnishment for about 5 months. once i noticed the garnishment i called in i am current in the default rehabilitation program. i have 1 more payment this would mark my 9th on time payment to get out of default. i was told because i was in the program and actively making payments towards my debt that my refund for this year wouldnt be offset. however to come find out. i filed for taxes on feb. 15th they were accepted feb 16th. the department of education put in to intercept my refund once again. i’ve looked into offset hardship but is it to late to try to get my refund back? even then im legit less than 30 days away from being in good standing? my rehabilitation program was making payments for 9 months, meanwhile my wage to continue garnishment untill the 5th on time payment was recieved. i really feel like i got fucked over here. they’ve taken over $3,000.00 between refund and wage garnishments on a debt of $10.000.00 after recieving my paper work from the collector i still owe $9.453.00 i need some advice on what i can do here
Robert Farrington says
Our advice (as in the post and all the comments) is always to complete everything before filing your tax return. You’re not alone in this (see the comments), which is why our advice is what it is.
Alyssa says
I’m currently in a Rehab program already and was going to make my 5th payment this month to get out of default. I was going to wait to file until I was done but with this virus I need to file ASAP.
Eric Frank says
Yes file asap they cant touch your return.. Folks please file now… Do not miss out.
Bridget says
hi, same thing happened to me!!!! I never got a letter from the Irs or US Dept of Educ saying they would take my refund!!!! And the damn loan is 27 yrs old ( and yes I have paid back some of it ) but never heard from them in over 7 yrs!!!!! It’s illegal that they just take the refund, and don’t even send a letter explaining this first, so a person has a chance to call reg this. They suck and I will contest it!!!!! And yes I tried calling them both in the last week or so, but of course u can’t get thru to anyone!!!! on hold forever !!!!!
Robert Farrington says
Sadly it’s not illegal – there’s no statute of limitations on Federal student loan debt.
Also, it’s not the IRS you need to dispute it with, it’s your lender/loan holder. But they are legally allowed to, so it’s time to take action and get out of default.
Katrina w. says
I am in default but I have filled out a borrower’s defense and they took my taxes today on March 18th 2020 and I received an email on March 4th 2020 stating that if I elected to be put in forbearance until the decision is made on my case I do not have to pay no more on my loan so how can they take my taxes? I contacted my EDD debt people and I said I may be eligible a refund because of the dates of email and when they took my taxes but I would have to wait 21 days for it to post on my account before they can even see that is there anywhere else I can go to get help so on the bottom of page under status messages on my Edge get. Gov it says that the fso suspended and top process complete.
Robert Farrington says
When did you file your taxes, versus when did you apply for forbearance? If you filed your taxes before you applied for forbearance, it’s not likely. If it’s the other way around, maybe, but still doubtful.
TASIMEON DENNISON says
If in the rehabilitation program and i made my first payment eill they still take my refund
Robert Farrington says
Yes, until you complete your refund, they can take your refund.
Brittany Mauro says
Hello so I have been in a rehabilitation program with doe. I filled a extension for my taxes. Everything was processed for them to deactivate my offset but haven’t yet what should I do
Robert Farrington says
Typically you’re offset is cleared for sure once you make your first payment after completing rehabilitation on your new repayment plan. So that’s why we recommend waiting until that point to file your taxes.
If you’re getting a refund, you have up to 3 years to claim it.
tatiana garcia says
I started my rehabilitation program in November . It’s April so it’s been 5 months. I’ve called the offset number and it always says I have a loan but today it says I don’t. Does that mean I’m safe to file my taxes?
Robert Farrington says
We don’t recommend you file until you complete your rehab 100%.
Paris says
I found out last minute that I was about to be put on an offset list by the DOE. I found out on Jan 27th which is also the same day I filed. They said I was going on the offset list on feb 6th. Unless I pay the debt in full by then or get approved for the loan rehab and make an eligible payment by the 30th. I talked to several different ppl there and was told different each time. I over-nighted the paper work and paid $100 by the 29th. They did however say the rehab paper work takes 10 days to be reviewed before approval. One rep said they send over offsets every Friday & the TOP takes 3-4 weeks to update their database. So my question is, can my taxes still be offset if I already filed, I have EITC, and my name won’t be turned over for offset until the 7th? Or will the offset not show up until after my funds have been sent to me?
Robert Farrington says
It will be close… I would guess you probably will see your tax return offset. Since you have EITC, your tax return won’t even be processed until 2/15, so you have that going for you.
Paris says
I’ve googled this stuff backwards and forwards trying to find a similar situation but can’t. All the personal comments I have read all have either started a rehab program before tax season or just coming out of rehab. Which says to me that they were on the offset list well before tax season. I haven’t seen anything about someone being put on the offset list during tax season and after filing. It’s driving me crazy not knowing. I was told by the last person I spoke with from the DOE (a supervisor) about the fact that the TOP takes 3-4 weeks to update their systems. I haven’t been able to find any solid proof regarding that, except the fact that some peopIe reported receiving their full refunds while being on the list. But if it’s at all true about the update time, I would be in the clear (until next year, which I plan to be out of default by then) since they wont turn my name over until the 7th. I have called the offset check line multiple times and nothing is found for my SSN on options 1 & 2. One DOE rep said to check the offset line after the 7th to see if I show up… he literally said “everything is up in the air as of now…” –stressful
Kellie Lamb says
Same situation except I filled out the loan discharge papers for a school I attended that closed it’s doors while I was attending. I did that on the 6 th of February. I called the DOP they said the offset was dropped. I then called the company that the DOP sold my loan to and they said my account is inactive at this time. I then called TOP and spoke with a man who told me my offset was taken off. He said there’s no reason I wouldn’t receive my refund. Is this accurate??
Robert Farrington says
If your loan went back into forbearance due to your filing for Borrower Defense to Repayment, you should avoid the offset.
Breonna says
The same thing is going on with me. I am scheduled to be put on the offset list February 19. I am overnighting my proof of public assistance hoping that the approve my payment plan before February 19. I already turned in my loan rehabilitation forms and check stubs I just didn’t send my proof of public assistance which is link. I am nervous as shit right now. Let me know how it goes for you.
Terra says
How are you finding out when the offset will happen? I’ve called every number for my loan and the DOE for my offset. And they can only tell me the amount and that it is going to happen. My refund is much more then my loan amount so it will be paid in full. I have the EITC and children.. but I really just need some sort of time frame for when i will receive the remainder of my tax return?
Hannah williams says
I did my taxes & I just founded out I had an offset from department of education to take my refund I never received no letter no phone call anything about this loan & i want to know how can I take action before taking my refund ? Is there a way I can stop or reverse , also it’s from a school that closed while I attending
Robert Farrington says
There’s nothing you can do to stop it at this point, but you can stop it in the future.
You need to get out of default. If your school closed, you could also look into Borrower Defense to Repayment.
Sam says
How did that work out for you?? I recently did the same thing but I still think they are gonna take my taxes.
Cameron says
So I filed taxes just to find out whole tax refund was taken. I never received a letter of offset and I even spoke with representative from law firm (of defaulted student loan) in August due to separate student loan issue and wasn’t notified by representative either. Even updated her with new address as they had wrong one on file. Is there anything I can do to fight this?
Robert Farrington says
For Federal loans they don’t need to notify you. It’s the law. The only thing you can do to fight it is get your loans out of default for next year.
Sara says
What about if your refund was 33% of your income that is already at poverty level, and you have a dependent? Never received a letter of intent to offset, are they required to send that certified?
Robert Farrington says
No, they send the letter to the address they have on file, which may or may not be correct if you haven’t updated it. It’s 100% your responsibility to maintain and manage your debt.
Ashley says
Same thing happened to me and i signed up for rehabilitation program and they said they would not take my taxes and i wake up this morning and they took them all.
Robert Farrington says
Correct – until you complete your rehabilitation and make your first payment under your new repayment plan, the government can still offset your tax return.
brenna says
wow i had the same thing happen-called navient they said they would not take my refund but today they did-i was in an income driven repayment-
Robert Farrington says
Did you already make a payment on your new loans or were you still rehabilitating it?
Gia says
The dept of ed and the collection company told me once i make my 5th payment out of the 9 in the rehabilitation program the offset would come off. Todd me it could take 3-4 weeks. That was 3 weeks ago and still nothing. Now the dept of ed isn’t even accepting phone calls. Im at a loss. Im about to be homeless with 3 kids.
Robert Farrington says
That’s rare to have happen before you complete rehabilitation so I’d work hard to make other arraignments without your refund.
Ebony N Braggs says
Thanks for this information I’m still waiting to get out default. I chose to consolidate my student debt made my 3 payments to Central Research and am now waiting to be transferred but it’s taking forever… Do you think I make this years taxes? Oh I did the standard consolidation
Robert Farrington says
If you’re owed a refund, there’s no penalty for filing late. If you owe taxes, your student loans don’t matter they are in default because you’re paying. So, just wait it out.
Ranita A Johnson says
What if you have made your first payment. On the fourth payment, of the loan repayment plan, but they still offset your taxes? I have to first become evicted or going through foreclosure to receive any of my income tax return back now, is that my only option. And I have proof of my four payments already and that I completed the contract forms and started my consolidation?
Robert Farrington says
You technically have to complete your 5th payment AND it has to be processed (usually takes 30 days)… So we always recommend people wait unless you want to see your tax refund offset.
Darriele M Washington says
Same thing just happened to me they took alll my tax refund and I have been making payments every month they draft money out of my account. So why take my refund!!!!????
Robert Farrington says
Are you making payments to rehabilitate your loan? If so, then you’re still in default and that’s why they took your refund. Read all the comments and my responses above.
Jack says
I paid over 12 thousand to the dept of treasury. I just found out today I have a offset for 500 to dept of education. Last year they took 5500 dollars from me and gave me a 1200 a refund. That’s the first refund I had in a long time. I didnt know anything about this 500 dollar debt. Are they gonna take my refund? I dont understand. Why didnt they take it last year? The loan is over 10 years old..
Robert Farrington says
Did you get the loan paid off and out of default? You need to find your loans and follow up on them. See this: How to Find Your Student Loans.
Kristina Walter says
Back in november i signed up for the rehabilition program i made my fifth payment on feb 13th 2020. Credit adjustments told me everything looks good on my end now waitin for them to lift the offset i havent filed my taxes yet due to i dont wanna lose them again this year i need my car fixed been homeless since last year when they took my tax money i got a new born just tryin to make a life
Robert Farrington says
It takes 30-60 days for that to process, so don’t file until then.
B says
They took 6,000 from me and still say i owe 7,000 I don’t think it registered or something because only had like 7,000 in loans
Robert Farrington says
No, at least 30% of what they took goes to fees and costs. So, it’s rare for any amount taken to go towards your loans in a significant way. That’s what makes this cycle so bad – you wasted so much money, and you still are in default and it will only continue to grow and get worse until you break it.
Edmund says
I got a letter from a collection agency about my defaulted student loans will my taxes be offset
B says
I just recently rehabilitated my loans and got accepted to REPAYE on December 19, 2019. My payment in January was $5 and I received an email that it was $0 in February and now $0 in March. Will I be getting my tax return?
Robert Farrington says
Yes, if you’ve completed rehabilitation and are under RePAYE, you’re out of default. You should get your tax refund.
Note: make sure you certify your repayments annually so you don’t default again.
Quinton Lamar Nero says
hi have a question last year they took my whole taxes and offset it to student loans now legally they were supposed to notify u and give u time to respond i recieved no letter nothing from irs in fact didnt see anything wrong with return was processed and given a deposit date then when date came checked it then said it was offset. they never legally sent me notice anything i could do
Robert Farrington says
You need to track down your loans and get out of default to stop that from happening again this year.
Markeshia Dysart says
Help!! Last year my my taxes were off set for a student loan of 4898…(full amount) except 62.00 I still received the remainder of my taxes 1,012 dollars. This year will they offset it for the 62.00
Why wouldnt they take it all last year and why would i still get the remainder of refund if I owed 62.00 also do you think I will get my taxes with no delay of they do take the 62 dollars
Robert Farrington says
The process of making your last payment makes this happens all the time.
Why don’t you just pay the remaining balance now to clear the offset. Call your lender and make a payment ASAP.
Shamirah says
My taxes are being taken I went on dept of Ed site and it says my loan is 108$ past due I’ve been doing deferments so can they still take my taxes
Robert Farrington says
If you’re in default, yes they can take your tax refund.
Brittany says
I am in the student loan rehab program, i have made 5 out of 9 payments. My agreement says if i had made 5 out of 9 payments they will stop garnishing my wages which they have from my paychecks. I never got the letter to tell me about the amount being taken out or the debit it is because it said my taxes will be offset. Does this mean i will still lose all of it or am i safe?
Robert Farrington says
It’s close… once you make your 5th payment, your servicer will send your information to the Department of Education. Basically, it takes 30-60 days to process everything and get it removed. So it’s close…
Latrice says
I have Tax topic 151 and I received my state taxes with no problem but they want me to call them with a reference number1242. I am confused
Robert Farrington says
Tax Topic 151 is due to a tax offset. IRS Error code 1242 is a freeze on your return. You need to call them and find out what’s up.
Lakeisha says
Just found out that I have a offset and my full refund was taken I did not get a letter in the mail, no warning that this was about to basically put me and my kids in a really bad spot. To the point that in 5 days we will be homeless. My question is I have all the documents that I need to do my hardship , and by the time they make a decision we will be out on the streets is there any way that this process to get my refund back go faster I am so scared I have 6 kids and one in oven. What should I do???
Robert Farrington says
That’s a terrible situation. You need to follow up on your offset and student loans. You need to then get out of default ASAP.
Crystal Thompson says
My defaulted student loans are being consolidated and I haven’t received a letter from the Department of Education last fall, so am I safe to file my taxes without them being taken?
Robert Farrington says
It depends on where you are at in the process. You sometimes won’t receive the letter until after the offset happens.
Ashley Harper says
I have been in loan rehabilitation since last year. I made all my payments on time and never missed one. I was told by the loan people my loans have to go to a new creditor cause I completed the loan rehabilitations program. I filed
My taxes and called the offset number and it said I had one for 250 then I had another one with the state. Cause my loans still hvnt went to the new creditor will my full return be taken or just the 250 plus whatever I owe the state
Robert Farrington says
Sadly, since you haven’t made a payment under your new plan, you still may technically be in default. This is why we recommend you always wait until after you’ve made the first payment on your new repayment plan.
Jessica Scott says
I am currently in a rehabilitation program to get my loans out of default. I filed my taxes and they took my entire refund. I was never notified of the offset. Can they do that?
Robert Farrington says
Yes, until you have completed your rehabilitation agreement, you’re still technically in default. Sadly, you probably should have waited to file your taxes (since you filed pretty early).
Finish getting out of default, then you won’t have to worry about this in the future.
Tasha says
So when you say wait you mean get a extension and file later after you set up a agreement and been paying ?
Robert Farrington says
If you’re expecting a refund, you don’t file an extension at all – you just don’t file. You only need to file an extension if you owe taxes. But, if you owe taxes, none of this matters because they aren’t garnishing anything.
Cantrell Quanciene WilsonBarney says
So can u file later than April and if u do a refund what’s the latest u can file.
Robert Farrington says
You have up to 3 years to claim a tax refund.
Precious says
If I’m in default but doing loan consolidation how long do it take to get out of default so i can file taxes?
Robert Farrington says
Every agreement is different, but typically about 3-6 months to be 100% complete and on a new repayment plan.
Carla says
I am in the consolidation program and they told me that my treasury offset has been deactivated so does that mean I can go file my taxes now??
Carla says
I have no repayment for the plan I was approved for as well
Robert Farrington says
Yes, but we recommend waiting until completion. If you read the comments above, you’ll see why.
Tara says
I consolidated my student loans after I filed my taxes this year, and was approved for an IBR with my payments at $0 a month. I was then informed that my taxes would be offset. The DOE took all of my return. Is there anything I can do? I’m waiting on the paperwork for my consolidated loans. I thought by doing it this way, I’d be safe
Robert Farrington says
No, you needed to fully complete the process, make a payment under your new plan, then you would have been safe. You’re technically still in default until everything is done.
Dell McDonald says
My student loan is in default. My bankruptcy was approved last August and I am in the process of going through a rehabilitation plan with DOE. I initiated review of my expenses to determine a payment plan October 2017 and started sending them $20 a month (5 consecutive payments thus far). However, they have continually requested additional information. Hopefully, I receive the approval over the next couple of weeks.
The agent for the DOE noted that my pay should not be garnished nor should my taxes be offset. I’m hesitant to file my taxes as I do need this refund. What is the risk of filing my taxes now while they are determining my case vs deferring filing my taxes for another 9 months until I’m out of default/rehab status?
Robert Farrington says
If you’re expecting a refund there is no harm to you in waiting. If you owe, you need to file on time. I personally would be doing your taxes, ensuring that you get a refund, and then waiting. That way you know you don’t owe.
Jennifer says
I am starting the rehab program. I have already successfully done this with another student loan that was a state loan not federal. Now Federal loan is going after my tax return. I started to file my taxes and put them on hold. I called the DOE and they said unless I am facing eviction or foreclosure, I can not apply for a hardship. Is this true. Because last year I filed a Hardship with the State Loans and was able to get my full refund back.
Robert Farrington says
You won’t get any type of exemption to the offset. You need to complete rehabilitation first so get your refund.
Remember – tax refunds are also optional. You can adjust your withholding with your employer so you owe taxes – then you get paid more each paycheck and never have to worry about this again.
moni says
This situation sounds like mine. How can I get an extension ?they’re being offset. While I was in process of starting income driven payments. Now I’m making 90 dollar payments every month and afraid to do my taxes DOE told me I could request an extension and I will be in good standing until I finish 3rd payment then I could do my taxes in October and get my refund .is this correct ?
Robert Farrington says
You can file an extension with your tax software or with an accountant.
Chaney says
My big tax refund was taken after I found that out I filed to make payment arrangements and get me out of default they haven’t taken my little tax refund yet am I in the clear so I’ll get that back called depaprtment of education and they said they’ll only take it if it’s participates in a certain program allowing them to take both state and federal taxes is that true
Robert Farrington says
What do you mean big and little refunds? Do you mean Federal and state? They typically only take your Federal refunds, not your state refunds.
Bill says
I thought my student loans were in deferement and I have never received any kind of communication, written or electronic, that I was in default. Never received a letter about an offset from the IRS or the DOE but after my refund was supposed to be deposited and wasn’t there iearned of the offset. Am I not supposed to be notified of not only the offset, but that my loans were in default? My family is screwed.
Robert Farrington says
You should be notified, but that also assumes that all your contact information and such is correct. I would get a hold of your lender ASAP and see what’s going on.
Debra says
I did not owe a student loan went to court 2x and student loan did dismissal stating I owe nothing and still taking my tax return. I never heard of Loan tax offset. Question? will this work for me
Robert Farrington says
What do you mean? You mean your student loan was dismissed and you’re still seeing your tax refund taken?
Marlena says
My husband just entered into a rehabilitation program and his wages will start to be garnished next month. Can I call or complete a form or stop this from happening where they do not take out his tax refund?
Robert Farrington says
No, you need to get out of default by completing rehabilitation. As for your refund, don’t file your taxes until you’re done with rehab.
Kelly says
I have been in the rehabilitation program for my student loans now for 3 months…I waited to file my taxes until now. Will they still take my federal tax return?
Robert Farrington says
You must complete your rehabilitation agreement fully before you’re out of default and “safe” to not have your tax refund taken. What does your agreement say? It’s usually at least 6 payments (months), if not longer.
Jen says
Can you reverse the offset if getting major surgery and going to be disabled for 2 months? I was depending on this to pay my bills and child care. I have ovarian cancer and not going to receive any disability until May. I entered the rehabilitation program they took first payment. I heard while they read their script that you can get it back in 5 months if you continue to make your payments is that so?
Robert Farrington says
No, but if your income is zero your monthly loan payments can be zero.
If you’re in default you need to rehabilitate your loans.
If you are permanently disabled, you need to apply for a discharge.
Christina says
My student loan will be out of default in September. I filed for an extension for my 2017 taxes and the deadline is mid-October I believe and I will be filing then. If I am owed a refund, will it still be offset?
Robert Farrington says
Once you’ve completed your rehabilitation agreement complete, you should be fine.
Denise says
I just made my last payment for the rehabilitation program so how long should I wait to file my taxes?
Robert Farrington says
Until you’ve made your first payment under your new income-driven repayment plan.
Tammy shore says
My friend told me .. h&r block said they can only take your loans once every 3 years.. is this true??
Robert Farrington says
No, you can see your tax refund offset every year. But it gets worse – just because they take your tax refund, doesn’t mean it even goes to your loans. It usually just goes to collection fees and interest. So, your balance still grows.
You NEED to get your student loans rehabilitated. Read this: https://www.thecollegeinvestor.com/15577/student-loan-rehabilitation/
Eboni Robinson says
Hello, i am currently on offset of 4thousand. And im currently on the program to get off of default which will be on june 26th 2018.then my stuff will be switched back to dept of edu.and im going to get on a payment plan with them. How long do i need to wait untill i can file my taxes before December without them taking my taxes?please help
Robert Farrington says
After you’re out of default and make your first payment under your new payment plan, you should be fine.
Kimberly says
Hi Robert. I hope you can answer a question that no one else has been able to answer. My yearly income is only about 30-32k. A few years back I encountered a financial hardship and my student loan went into default. As a result the IRS offset my tax returns. I haven’t filed any taxes for 3 years. I entered a repayment plan last year and as of this month my student loan is now out of default. My question is: When can I file my current and back taxes and get my full return without any money being offset? And is there a way I can confirm it will not be off set, before I file.
Robert Farrington says
Once you’ve made at least one payment you should be good to go. Make sure you consult an accountant to file your past taxes.
Katie says
Why do they take a 8000 dollars income tax,rather then a 3200 ?This person was in the porcess of getting the student loan cleared,was cleared.
Robert Farrington says
When you get your tax return offset, it doesn’t just go to the loan, but also to collection fees and interest. Depending on the loan balance, very little may have actually gone to the loan (if any).
Angela says
I’ve completed my rehabilitation program in April. Today, I just made my first payment with the new payment plan. I called TOP and the automated line stated that there were not any offsets against my SS#. How much longer should I wait to file my taxes? I rather be safe than sorry. I would like to get my tax refund this year 🙂
Robert Farrington says
Once you make your payments on your new plan, you should be fine and shouldn’t have any more offsets due to your student loans.
Melody says
I have a student loan offset that has been seized for the past two years. I plan to return to school. Will my tax refunds continue to be seized while I’m a student?
Robert Farrington says
Yes, your tax refunds will continue to be offset as long as you’re in default. Furthermore, you can’t get any more Federal loans, and you likely won’t be able to qualify for any private student loans due to your credit.
Liliana Gonzalez says
I have completed 9 months of rehabilitation program, I am now being switched to another repayment program. When will I be okay to file my taxes with out fear of getting refund check garnished by Department of education?
Robert Farrington says
You’re typically fine after you make your first payment on your new repayment plan.
Liliana Gonzalez says
Thank you, I will keep you updated on how it goes 🙂
Jlee says
I will finish my rehabilitation agreement in October and I filed an extension … and I think the deadline to file with turbo tax is October … will I still be able to file my taxes in Nov or Dec? I just want to make sure the offset is taken off my taxes… and I read were you said to wait till you make your first payment on the new repayment plan?
Robert Farrington says
You can file a tax return for a refund anytime within 3 years. So, wait until you are 100% on your new payment plan and then file.
Brii says
Hello, my taxes were taken last year 2017 for $5,000 because my student loans were on default. This year, I gor an extension to file my taxes and as you know we have until mid-October. As of July 21, 2018 my loans are out if default and back in good standing and today I made my 1st monthly payment after the rehabilitation program. I called to check if there were any offsets still and the offset for 2017 ia still showing for $5,000. Am I still at risk for my refund being taken away this year?
Robert Farrington says
Give it a couple weeks. You should be fine.
Dana says
I saw on several post that it will be ok to file your taxes after you are making payments on the new payment plan. I’m unsure of what this is. I supposedly made my last payment July 16, 2018 to Performant (a collection agency for USDE), as well I’m on the income based program with Nelnet. I’m very confused. I completed the 9 month rehab with Performant, USDE says I’m not in default, but the offset 800 number says I still have a debt. I don’t know what to do . Please help
Robert Farrington says
Give it a few weeks and you should be fine. It hasn’t even been a month since you cleared your loan out of collections.
NJE says
Hi Robert, I hope you can help/give me some clarity. I’m concerned following all the research I’ve been doing about tax offsets. So, last year my Federal AND State refunds were offset (about $2,500 in total). At the time, I was not in any rehabilitation program and my wages were also being garnished. Fast forward to now, I finished paying off the loan related to the garnishment and was no longer having any wages taken as of 3 months ago. I also started a rehabilitation plan with the third-party collector and have made 5 consecutive on-time payments. I am also currently unemployed as of one month and a half ago. I am hoping these three things together will be enough to avoid another $2,500 offset this year. I am filing the Treasury Offset Request for Review paperwork this weekend, although I have not received any notice saying they were planning to offset (I didn’t receive any notice last year either, despite being offset). Additionally, I called the number to see if I would be offset. The automated message only mentioned last year’s offset, it did not say anything about an offset connected to my social security number for this year.
Robert Farrington says
It won’t be enough. You need to complete the rehabilitation program and get on an income-driven repayment. Only then will the offset be removed.
katie says
once they take your refund, will setting up payment agreement get my refund refunded back to me?
Robert Farrington says
No, but it will prevent it from happening again next year.
Christopher M Leal says
I’m in the rehabilitation program I have one more payment to make which I will do this in a couple of days. My tax advocate just sent out my tax papers today I do believe. So my final payment will be made b4 the DOE receives it. I wanna know if I will be getting anything back. Plus it would help since I’m also a single father of 2 kids.
Robert Farrington says
It’s very close to call. We don’t recommend submitting your tax return until after you make your first payment under your new repayment plan.
Christopher M Leal says
Last rehabilitation payment paid last week still waiting on the other agency for my repayment plan after the rehabilitation program… Still I haven’t received anything regarding an offset or anything… And I first filed back in February and once again in April and nothing yet.. We r almost in September now
Christopher Leal says
And also I called the offset line and it told me I had 2 offsets. And those offsets were taking out last year and one of them was for child support and I know I don’t owe anything and I talked to the dcs representative she said my case was closed since last year.
Christopher M Leal says
What does it mean if Its showing I have 2 offsets but the offsets that r showing are from last years tax season. Saying I made payments in February and may of last year. And one of the offsets is for child support but my child support case has been closed for a year cuz I paid it all off last year
Robert Farrington says
You need to contact the agencies that issued the offset to have it removed: https://www.irs.gov/newsroom/six-facts-on-tax-refunds-and-offsets
Leslie Rios says
Hello my problem is this. My loans were in deafult last year and $7200 of my refund was applied towards my student loans. I am on a rehabilitaion repayment plan now. And current. I have made have made 3 payments. Will my tax refund be offset as well?
Robert Farrington says
Once you complete your rehabilitation program and make your first payment under your new repayment plan, you should be good to file your taxes.
Casie says
I wish I would have read all this before today. I was told as soon as my loans were out of default I could file my taxes. That they could not take it. I sent them in today. I was just out of default last Saturday. I haven’t made a payment on a new plan yet. I called the offset number. I have one account in offset. They’re still going to take my money aren’t they!? 🙁
Robert Farrington says
It’s a risk that they will – it’s all based on how fast your paperwork to remove the offset and default process versus how quickly the IRS processes your return.
Marisa says
If they do take it even though your out of default what can you do to get your refund?
Robert Farrington says
You can try to dispute it, but that’s a hard dispute because you’re not out of default until all the paperwork is processed and you’re making payments to your new lender.
Arianna says
I am done with the rehab payment program as of 09/010/2018. I spoke with AFS and they stated my loans were out of their hands. with that being said, should I file my taxes? I haven’t started a new payment plan yet.
Robert Farrington says
To be safe, we always recommend waiting until you’ve made your first payment on your new repayment plan.
Marisa says
So I just made my last payment on my rehab default they now have switched me to a new Leander. And I am out of default. I have not made a payment to new Leander and have already filed my taxes will they take my refund ? I called and still have an offset they told me it could take 2 to 3 weeks. What can I do if I get my tax refund garnished ?
Robert Farrington says
It’s hard to say. You have two different organizations processing paperwork, and who-ever wins gets your money. That’s why we recommend waiting until you’ve made your first payment under your new repayment plan before filing your taxes.
Matt cox says
If i am still needing to file 16 and 17 taxes but in 18 an offset is granted, can they go after my 16 and 17 return?
Robert Farrington says
Yes, any Federal payments you get after the offset is grant can be taken.
Jenica Branson says
How do I go about getting the offset reversed? I am doing a reabillitation program and the representative told me that my student loans were not in jeopardy of being garnished or taken by the irs. Especially agreeing to go into the reabillitation program and making payments. I keep reading that being in a rehabilitation program is a valid reason to reverse the offset from the irs, but from what I have read on this website it seems almost impossible. What the the reasons to which the irs wouldn’t reverse the offset being in a rehabilitation program, or what factors WOULD make the irs agree to reverse the offset?
Robert Farrington says
They won’t until you’re done with your rehab program and make your first payment under your new repayment plan. Easiest way to avoid that is not file your tax return until you’re rehabilitated.
Ed says
I was already aware of my offset my question is I just filed my taxes for 16&17 2017 was for 5757 and that was offset but 16 was for 2800 they took 300 from that but I got the rest I wasn’t expecting a return at all cause I knew about my offset i still have to file for 2015 am I in the clear to get a return or no?
Robert Farrington says
You need to call and see if you still have an offset. If you do, then you’re not clear. If you don’t, then you’re clear. If your loans are still in default, you likely have an offset still.
Ed says
Why wouldn’t they take all of my 16 return? I don’t get why I received a return which it should of went to my student loan i called the offset and I don’t have an offset but I called my collector and I owe 1,400 still which is why I’m confused I got a return
John says
Ok. My student loans I guess have been in default since 2000. And at that point a tax refund was taken and I personally went to a IRS tax office to be sure I had no other outstanding balance with DOE to ensurey tax’s would not be taken again. Now fast forward I filed taxs for year 2013 and received a tax refund. Then didn’t file again until 2016. Then they was taken. Once again 2017. Cunfussimg as this sounds it is because I dug in to amount of my loan and discoverd that I owe an alarming total. And seemed to be a larger amount granted for the loan then I received when I was in college. Needless to say I not once ever filled out for any type of loan the entire time I was in college nor was I eligible for assistance because ofynparents income was to large. I understand there was some type of loan u still can get but if my parents paid for my tution every semester how could they issue a loan 1st of all I never applied for bit was told that “I had some money at the cashier office on campus and go pick it up” Any 18 year old going to spring break would sign there soul away not knowing the grave mistake they was making
Some I admit that I received a check in amount of 1200$ around April of 1996. But never applied for it then lastly after have rough spot in life a being incarcerated in 1998-2000, some type of form was filled out looks like on my behalf bye Good knows who and was totally not valid
I have the forms where I sent a had a letter notorized stating I didn’t do all this and sent copies of forms. Better yet in 2001 the IRS told me I had no other outstanding balances with them. One letter I received back said there finding showed that I am responsible for entire loan. Im broke at a low paying job because of being an convicted felon bye the Untied States of America. Repaidy debt to society in anform of 10 years in Federal prison. Any type of guidance would be helpful. On a ending note a 1200$ whatever u call it gave to a 18year old kid 22years ago I guess as grown to an 8000$ debt to DOE and isn’t Decreasing bye any amount due to collection agency charges. Please, Please Help me anyway u can Thanks..
Robert Farrington says
You need to follow the directions on the article above – get out of default by rehabilitating your loans and making payments on a payment plan.
The reason you’re not making any progress is that these tax offsets are going to interest and collection costs. These continue to grow every year, and when you file takes again, it barely goes to cover these. Your loan balance will continue to grow until you take action on the loan – even with the tax offsets.
Alicia says
I called the offset number and it says I have no offsets but could change as they’re added daily. I pressed the option to hear about debts and it told me about my student loan. Will they still take my refund if it’s a debt and not an offset?
Robert Farrington says
Are you in default on your loan? If yes, then yes, they will take your refund. If no, then they won’t.
Brianna says
Hello I have a question I have a student loan from 7yrs ago an I called the offset line an it says I don’t owe anything an on my credit karma it say charge off. Will they still take my tax return?
Robert Farrington says
What type of loan was it?
Evonne says
How do I know if my taxes will be taken? I always get a refund and am confused I have no garnishment and I spoke with a 3rd party who was going to enroll me into a forgiveness program and she couldn’t see anything stating they would take it. I need my refund so I am just wondering how I can go about finding out if it will be taken from me? I am enrolling in a rehabilitation program today so if theyre going to take my refund I’d rather file for an extension.
Robert Farrington says
If you need to rehabilitate your loans, that means you’re in default. If you’re in default, you’ll likely see your taxes offset.
Ian Font says
My student loans are currently in loan rehabilitation (3 months in out of the 9 months), am I still at risk of them taking my federal tax return?
Robert Farrington says
Yes, you will have your tax return taken until you’re out of default and fully rehabilitated. My suggestion is to wait until you’re done with rehabilitation, make your first payment under your new repayment plan, then file your tax return.
Asonji says
Hello, just wondering has anyone received a refund due to the Coronavirus??? It said if our taxes were taken after March 13,2020 we would get our money back. If not, does anyone know of the date to receive our refund?
Robert Farrington says
They said it would take up to 60 days, but we expect most to have it back within 2 to 4 weeks.
NHurley says
Hello! I filed my taxes in early February and received a notice at the end of February that my return was going to be offset and applied to my almost 20 year old student loan debt. Well sure enough, they took the full amount and applied it on 3/10/20. I received an e-mail today from the Default Resolution Group that I am owed a refund back for the full amount taken and would receive it in the mail 30-60 days. I keep reading online that anything that was taken 3/13 or later only would be refunded. So this is good news for myself and others? Did they change this to go back even further retroactively of 3/13?
Robert Farrington says
We’ve seen some reports (i.e. comments) that they’ve extended the period to early March. So you may be luck!
Nico says
I was never notified of my student loan being in default never got a letter. I was in prison for over ten years and never gotten a letter, I got out, got a job and have a family. Call DOE and they said I made a payment which they offset last year’s taxes but my balance is the same WTF why is that even possible and nobody giving me answer and when I ask to talk to some one that can help me they give me the run around…what can I do who can I call.
Robert Farrington says
Here’s a guide we have on how to find your student loans: https://thecollegeinvestor.com/19370/how-to-find-out-who-owns-your-student-loans/
Taiyana says
Hi, my my wages are currently being garnished for my student loans and I’m now in a Rehabilitation program. I’ve made 3/5 required payments to have the garnishment suspended and elig to make a regular payment plan. I’m curious about how long it will take to remove the treasurey offset once i complete the 5 payments and if I’ll more than likely need to get a tax extension and give it a few months.
Robert Farrington says
Once you make the first payment under your new repayment plan, you’re in the clear.
Shemere says
Hello, I too discovered an federal offset the hard way! I’ve graduated from my rehabilitation program to a new lender in October. I’ve been making payments to the new lender ever since. As silly as this sounds, I’m also curious to know if it’s safe to file without fear of being offset/garnish?
Robert Farrington says
Yes, if you’re on your new payment plan and out of default, you should be fine. You can double-check the offset hotline as well.
Katie says
So I have a question, I defaulted on my student loans of about 25,000, over the past couple (2-3) years my tax refund had been taken and applied to that. I am out of default on my credit report and owe just little over $5,000 left. With me being on good standings does that mean they will still take this years return as well or am I good to get the refund? I have 2 kids and I’m due in March with my 3rd.. I really need this money I can’t go another year without it.
Robert Farrington says
If you’re 100% out of default because you completed rehabilitation or consolidated your loans, you are good to file. You can always call the offset number to validate.
Granny says
This is so confusing. I consolidated my college loans, have a $0 amount payment due since November. So this counts as monthly payments for 3 months now, right?
How do I find out if the offset has been removed? When I called it said my total loan amount and what the offset/took in 2016, it says nothing about pending. I have not yet filed for 2017. Is it safe to file now? Or do I have to wait until they give me a real dollar amount to pay? Reading through other’s comments, I see 3 months, 6 months and 9 months; which is right? thank you
Robert Farrington says
If you’re on an income-driven repayment plan with a legal payment of $0, then that counts as a payment. You can call the offset number and validate the offset has been removed.
Rehabilitation typically takes 6-9 months, and you would know if you’re completed with it because you would be back with a major loan servicer and on a specific payment plan getting monthly statements reflecting that.
Viola Patterson says
So i called the irs off set line to see if they’re still taking my taxes from student loans and it said there was nothing listed. So does that mean I’m ok to file my taxes and that i should get my refund this year?
Robert Farrington says
Should be if there wasn’t anything listed. Are you expecting there to be something? Did you change anything from last year?
Robert says
If my last payment for the rehabilitation program is in March. How often does it take to get to a new lender so I could make my first new repayment plan I would like claim my taxes but want to be totally out of the woods.
Robert Farrington says
Last rehabilitation payment is in March, first payment under your new lender/repayment program will be in April. Then file your taxes.
Will bishop says
If I complete the three consecutive months of payments on my rehabilitation. Can I file my taxes then? Or will the still be taken?
Robert Farrington says
Most rehabilitation agreements are six or nine months. I’ve never seen a three month agreement. Are you sure that you only have a three month rehabilitation plan?
The bottom line is you want to wait until you make your first payment on your new repayment plan – NOT the rehabilitation plan.
Medina says
So I’m currently in the rehabilitation process last month for payments is February 15th… I spoke today with the agency that I am making my payments to as long as February payment is made they will not take my taxes. I called the hotline and it states that I don’t have any offsets. But obviously my student loan is in default since I am in the rehabilitation program. Question is will they still take my taxes if I file tomorrow since the line is stating I do not have an offsets?
Robert Farrington says
We recommend that you wait until you make your first payment under your new repayment plan. Especially with the shutdown there may be delays in getting your paperwork processed. The best thing you can do is wait and file after you’re on your new plan.
Brenda L Castillo says
What do u mean new repayment plan?
Robert Farrington says
Once you complete your loan rehabilitation agreement (for 9 months), you then are transitioned back to a regular loan servicer and you resume payments under a regular income-driven repayment plan. You should wait until this happens before filing a return.
John says
Hello,
I had my taxes offset 3 years ago and entered the rehabilitation program paying 5$ a month for 9 months which took me out of default. I left it the way it was and never followed up. This October 26, 2018 I received a letter stating that DOE holds my defaulted student loans for offset again, today I called the new debt collector which now added another 3,500$ on fees to my loan making it 17,000$ total. They told me I wasn’t eligible for another rehab program and can make monthly payment arrangements of 143$ a month and I would be taken off the offset immediately after I made that payment of 143$ authorized by the manager I asked him and he said that the representative had misinformed me and she read me the offset rules again saying that I would pay 143$ for 12 months and then call again and work on another suggested nation wide average payment meanwhile I would still remain in default for lifetime of the loan, but my offset would come off after 5 full payments starting today. IRS owes me 6,000$ this year, another option was debt consolidation and they said something about 3 months…. I already made the 143$ payment I’m a little angry that she told me the offset would be gone after the first payment. What should I do? Also my credit score has jumped from 540 to 770 in 2 years…. it seems this loan for 11,000$ which i got in 2007 (today is 17,600$) has fallen of my credit report, by making this payment am I opening another can of worms? And is that true that after 5 monthly payments of the 143$ the offset with be gone?
Robert Farrington says
After your rehabilitation program three years ago, did you just stop making payments? If so, then it makes sense you’re in default again.
You have to get out of default AND then continue paying off the loans.
Rehabilitation is a one time thing. If you did it once, your only option left is to consolidate your loans again. Your tax return will be offset again until your loan is out of default.
You can still get your tax refund, just consolidate first and get back on track, then file your taxes.
Rhonda Ramstack says
Hello,
I received a letter from Navient saying that I completed rehabilitation and was in good standing. Do I have to worry about my taxes being off set. I haven’t filed yet.
Robert Farrington says
If you’re in good standing and have made at least one payment on your new plan you’re safe.
Lydia Anthony says
I have a defaulted federal student loan but I have recently entered in the loan rehabilitation program but I am waiting for NC to change my status from default. I have been trying to do this since March 2018 and they were just giving me the run around I was successfully entered in the program in Jan 2019. Is there any hope of getting my 2018 tax return? The offset number I called still says i owe a debt for student loans. Is there any way to fix this because I did my part for the loan rehabilitation they just dragged their feet for months so it couldn’t be completed.
Robert Farrington says
You have to complete rehabilitation first – so after you make your 9 payments and start making payments under your new repayment plan, you can file your tax return.
Storm Cantu says
If my weekly checks have been getting garnished due to a pay raise and i’m now eligible for that to happen, would it be possible to file to see my tax return again now that a good portion of my checks have been going to paying off my college loans for the last year or would it be a pointless attempt?
Robert Farrington says
No, you need to get out of default first. Also, the garnishment of your wages is likely barely going to your loans – likely just going to interest and collection fees. So, you are honestly just throwing your hard earned money away!
Go get out of default and start making payments, then you can file your tax return and get your refund once you’re out of default.
Trev says
Hey Robert,
Possible quick question:
Last year I had an offset and still filed because I started a rehab payment plan and thought that would help. It didn’t. Anyways, I fell on hard times and my account went back into default.
I got a letter in the mail today from the lender saying “Participating in loan rehab can prevent wage garnishment and tax offset. Additionally, successfully completing loan rehab can remove the default record from your credit”. I called TOP and I don’t have an offset. I’m going to call the lender tomorrow and get on the rehab program again before they assign an offset. So, is the letter true? If I get on the program now, will they not offset me? Or is it just a ploy to get me to pay again and they will still offset me here soon anyways?
Thanks!
Robert Farrington says
They will offset you if you’re in default. You need to complete rehabilitation.
Also, I don’t believe you’re eligible to rehabilitate again – it’s a one time deal and you failed the first time around. Your only option left is to re-consolidate your loans.
The only thing that’s going to help you is to get out of default (and you need to do it anyway beyond your tax refund issue).
Trev says
Apparently it was through a different lender or something because I was able to enroll in the rehabilitation program. I made the first two payments and I also paid the original lender a payment as well.
It said in the letter that participating in loan rehab can prevent tax offset. Why would they say that if they are just going to offset me anyways? I’ve been checking the treasury line the last week or so and still no offset. Is it possible that they won’t offset me? Last year by the time I got my w2 and called the treasury I had an offset.
Also, what do you know about the hardship paperwork you can send in to get your tax refund back after they take it? Does it usually work?
Robert Farrington says
It’s about completing rehabilitation – you’re still technically in default until you complete the rehab program. We recommend waiting until after that first payment is made on your new plan to ensure you’re safe – government bureaucracy and paperwork take time.
If you file your taxes jointly with a spouse, your spouse can file for injured relief and definitely get her portion of your tax refund. As for the hardship paperwork, typically doesn’t work unless you really have some extenuating circumstances.
A better idea is to get out of default. And also to adjust your W4 withholding from your paycheck so you’re not getting a big refund, but rather get bigger paychecks.
Tejana says
I completed my 9 month rehabilitation program back in Nov 18 it was transferred back to Navient. I talked with Navient and they said I had 3 more payments of $5. I made a payment Jan 7 and now have Feb, Mar. I kept asking if I file my taxes will I be offset they reassured me that I would not. But to check the offset list to be safe. who do I contact about offset list?
Robert Farrington says
Once your rehabilitation is complete and you’re back with Navient, you should be fine. But you can all the number in the article above.
Chantell Moore says
I recently learned of a offset of my students loans. I have NOT filed my tax return yet however a few weeks ago I consolidated my loans (before learning my refund would be offset) will consolidation clear my offset so I can file?
Robert Farrington says
Yes, it should clear your offset. But you should wait until you make your first payment on your new consolidation loan.
Michael says
Hello I just Realized that my tax refund is in offset due to unpaid student loans. I called and got into a consolidation program. I have to make 3 payments 20 days apart and then will be sent to a new lender. They are saying 30-60 days ( they couldn’t say if that was after my last payment or not). I do not work and have no income. My husband works an all the income we report on our taxes is his. Is there anyway to know how long it will be before the offset is lifted and we can file? Also is there any way for him to file without the offset effecting him. Can we file with me being a dependent and then amend later after the offset is resolved?
Robert Farrington says
Is there anyway to know how long it will be before the offset is lifted and we can file?
The offset will be lifted when you’re completely out of default. This means you have a new loan on a new repayment plan. That’s why we recommend you make your first payment on your new loan before filing. That 60 days is about right, but we would recommend 90 – that extra 30 days to make your first new loan payment.
Also is there any way for him to file without the offset effecting him?
No.
Can we file with me being a dependent and then amend later after the offset is resolved?
No.
Michael says
Is that 30-90 days once I started the process? I started this past week. So would that mean 30-90 after that date or 30-90 days after the last of my three payments? Thanks for your help!!
Robert Farrington says
Should be about 90 days from last week – but you need to keep track by payments, not by days.
Amber says
A little confused about the offset line & debts owed. I completed a rehabilitation on my student loans last year and have been making payments to the lender that took over the loan for about 4 months now. I called the tax offset line and it says “we found one tax offset, your 2017 taxes were offset in the amount of $x.xx (my full refund) by the department of education any questions please call them at xxx-xxx-xxxx. But then immediately after this information it says “We have found no debts for the social security number entered, but we add debts daily”
I’m assuming this means I have no debts for 2018 taxes? Why are they giving me the info for 2017 though? I never had them list the prior years info on the tax offset line. I’m so confused. I listened to the recording 3 times to make sure I was hearing it correctly. Can anyone tell me what this means? Thank you!
Robert Farrington says
If you completed the rehabilitation program and have been making payments to your new lender, you are safe to file (at least for your student loan debt).
Amber says
Thank you
Lindsay says
I called the TOPs hotline and it says I have one debt that may be offset, does that mean my return will definitely be offset. I didn’t receive a notice. My student loans had been sold and I only finally figured out who had them when I called the hotline.
Robert Farrington says
If you’re in default its pretty much a guarantee your refund will be offset.
Charlene says
Last year my tax refund was taken with the exception of like $1,300. They said it was offset for student loans and they sent me what was remaining. When I filed this year I got an offset code along with my DDD for my return. When I called the offset line it said it was for almost $3,500 for department of education….why is that if they took my refund last year and I got some back after they took it?
Robert Farrington says
If you didn’t take any action on your student loan to get it out of default, your loan spent the year growing, adding collection costs, and more. That small amount they took didn’t cover everything, and so now you’re in worse shape.
You have to get out of student loan default ASAP!
Rebecca says
Hello,
I am currently in a rehabilitation program. The person who I am dealing with in the collection company said since I have made 5 consecutive payments and have turned in all the proper paper work that my loan accounts should be taken out of the offset program. When I call the Treasury Offset number I only hear information from the offset from last year, not this year.
What should I do?
Thank you
Robert Farrington says
You should wait to fully complete rehabilitation and make your first payment on your loan with your new servicer before filing… just like we say in the article above.
Reina Rivera says
They said the same for me fhcann associates they told me after 5
Consecutive payments u are in good standing and can file, but I’m going to call the dept of education just to make sure it’s off
Kaitlin says
Hi, l completred a student loan rehabilitation program in October of 2018. The company that now has my student loans received the letter and dismissal from default december 28th 2018.
I had to call the IRS to get paperwork and had them check my status. They say I am still flagged for garnished refund.
How do I get that off the record ?? I didn’t file my 2017 taxes because of the default. And will be filing both at once. I don’t want to lose all of that refund.
Thanks !
Robert Farrington says
Make your first payment under your new repayment plan. Give it a bit of time. The government shutdown delayed a lot of things…
Kaitlin says
Hi,
My first payment is in forebarance because I’m a full time college student.
But now bc of all of this defaulted loans not updating I can’t get my financial aid. I’ve faxed, emailed, called everyone I can think of.
Can I fax the loan out of default letter to new York state higher education and IRS?
Robert Farrington says
You would be in deferment. That’s fine, just wait until you get your first monthly statement then (whether you have to pay or not).
R. Stevens says
I received a letter that says it’s from US DOE about possible withholding of 15% of my SSI. When I called the DOE they said it was turned over to a collection agency (Coast Professional) I have no had contact with or received any paperwork from. So I called the Dept of Treasury and they said there aren’t any current offsets when I entered my ssn. I’m confused if this is a possible scam. The Department of Treasury Logo is not one on the website or in the correct color. I’m trying to find out if it’s a scam who do I contact? I have called the. Scam number and it lead me to some constant ads they wanted me to sign up for. I just want to get to the right people and I’m on a goose chase for info.
Robert Farrington says
The question is, are you in default on a student loan? If yes, then that makes sense. You can find out who owns your loans by following this guide: How to find your student loans.
Once you’ve found them, you will se garnishments if you’re in default. You need to get out of default to fix this.
patricia says
Does the DOE not put there offsets on the offset number. It says I have no offsets at this time under my social but when I just made my 5th payment through the rehab program they said I have to wait 3 to 4 business days for payment to post and DOE still has a offset on my file and after this payment goes through. they will update with DOE and they will lift offset. I’m just wondering why the DOE offset does not record on the offset number?
Robert Farrington says
We’ve found the offset number to be unreliable. If you’re in default, it’s a guarantee you’ll be offset, but not a guarantee you’ll be listed on the number.
Brandy says
I didnt get notice of an offset. I check my mail religiously
After filing, I found out that I have an offset. I’ve been working on loan consolidation. The consolidation isnt ready yet, but I’ve made my 3 payments and the consolidation is in the process.
If the consolidation goes through before the irs happens to process my tax return, is there a sliver of a chance I could get my refund? If theres a chance, is there anyone I should asknt ohhh call the irs or treasury dept or whoever?
Robert Farrington says
If the consolidation goes through, maybe. But why don’t you just wait another month or two to file your tax return?
Christy Stuart says
I am currently in the process of consolidating my loans that are in default. I called the Tax Offset Program number and it says I have no offsets at this time. How accurate it that hotline? I did receive a letter that stated a possible tax offset would happen. Then I started the consolidation process which isn’t complete yet. Even though the TOP says I have no offsets should I still wait to file for my refund? Also, does everyone do a Rehabilitation first before you get your income driven payment plan? Thanks in advance!
Robert Farrington says
The hotline is 50/50. The letter is accurate.
Complete the process of consolidation 100%, make a payment on your new loan, and then file your tax return.
Shay says
I have a offset but I paid all of my federal loans off the offset is for state loans they already took my state’s tax refund so are the going to tax my federal to
Robert Farrington says
Yes, they can go after Federal payments like a Federal tax refund too.
Darby says
I’m alittle confused. I am currently on a rehabilitation program for my defaulted student loans. I was aware that they could still possibly take my Federal refund, which was ok with me considering the amount I am supposed to receive is well over the amount owed. Today I checked on my state return and it says I will not be getting a refund. When calling the number to check about an offset it said that my state refund was taken and applied to my to DOE. Can they take your state taxes for a federal loan?
Robert Farrington says
Yes, they can take everything. And offsets typically don’t go to cover what you owe on the loan – they go to collection costs and fees, accrued interest, and more. If you don’t take action to get your debt out of default, this will keep happening.
Tommy says
I just started a rehabilitation program for my federal student loans. I have made my first payment and they said to call the Offset number to check the status in a few days (this was last week.) I just called the number and it says I have no Offset. Am I ok to file my taxes or would I have to wait a couple months when the rehabilitation is complete?
Robert Farrington says
Our recommendation is to fully complete your rehabilitation if you want to get your refund. Anything else is a risk.
Shay says
Hi is there anyway I can stop them from taking my federal taxes they took my state last year to that’s when I found out that I had a offset what can I do so they won’t take my federal taxes and why didn’t they just take the money when I paid off my federal taxes back in 2007
jeremy parks says
My student load was in default and I didn’t get a return because they took it. Do I get credit towards the total amount owed after they have taken my money? What happens with the money I was supposed to be returned?
Robert Farrington says
The money they took goes towards your student loans – but most (or all of it) will go to collection costs and fees, and accrued interest. Rarely will you see any actually go to your loan balance. Your loan will still continue to grow and be a problem until you get it out of default.
Chris says
My loans are in default and I call the númber for offset and even called the 3rd party and I still don’t have an offset and a lady told me that on March 10 I will know if I am in offset and that I am ok to file my taxes as long as it’s before March 10th is this true or they will still take it away even though I have no offsets yet
Robert Farrington says
Your risk is very high. If I was to gamble on your scenario, I would put all my money on you having your tax return offset and taken.
A-Teague says
How can I get a data sheet of all of the past taxes that have been taken to pay off my loan versus how much is left and also to see if it is going to the debt itself instead of just the interest? I’m trying to figure out exactly how long it will take to pay it off entirely. I have financial hardship, not documented but would like to get out of debt!
Robert Farrington says
You can use the NSLDS to find your loan information and balances: https://thecollegeinvestor.com/22787/nslds-and-student-loans/
Likely almost none of what’s been taken from your past tax returns has gone to your loan. In most cases, it all goes to collection costs and fees, and accrued interest. As a result, most people’s loans continue to grow (and so the fees and interest get bigger as well).
The only way to stop the cycle you’re in is to rehabilitate your student loans and get out of default. It might be much more affordable than you think… read this: https://thecollegeinvestor.com/22174/student-loan-default/
La Trica says
I’m currently on a plan and just got informed that they are taking my taxes what do I do next?
Robert Farrington says
You finish rehabilitating your loans 100% before you file your tax return. That’s what we say in the article above…
Cheyenne c. says
I am in a payment agreement with the debt collector of my student loans and they take money monthly. But yet all my refund was taken. Can they do that? I have a letter stating them taking money out of my account?
Robert Farrington says
Yes, until your account is out of default, they can totally take your government payments. That’s why we recommend waiting until your out of default before filing your taxes.
If you’re just on a payment plan, not rehabilitation, this will continue to happen.
Andrea says
So here’s my situation. I have two different loan holders. I have completed the rehabilitation process with one, and am in the middle of the consolidation process with the other one. A couple of weeks ago, my SSN was showing up in TOPS as possible offset from the DOE. Now I’ve checked back every day, several times a day, since Thursday and it’s saying there is no debt associated with my SSN. As I stated, I’ve completed rehabilitation with one holder of multiple loans, and I’m in the middle of the consolidation process with the other one, but it’s not complete yet. Since TOPS showed a debt but now it doesn’t, is it safe to file my taxes? I’m looking at a RAL because I had a situation arise that is requiring me to have about $500 by the end of the week. If I didn’t need it so bad, I would just wait until the consolidation was complete too, just to be sure. But I really can’t wait anymore, so I’m hoping TOPS is accurate.
Robert Farrington says
I would wait until your consolidation is complete to be safe, as we’ve seen plenty of people not have an offset showing see their tax refund taken (see the comments above – there are some stories there).
If you want a RAL, check this: https://thecollegeinvestor.com/18859/early-tax-refund-anticipation-loans/
You might also just go the route of a personal loan: https://thecollegeinvestor.com/22621/best-personal-loan/
Andrea says
Thank you for the help and quick response, and all the help you lend on here! Just one more thing… I called the IRS and the Bureau of Fiscal Services, and actually spoke to a person at both, both saying I’m good to go to file my taxes. I also called the loan holder of the one’s I’m trying to consolidate who says I am “certified” for an offset. The only one I haven’t called is the Dept of Edu. First, what does certified mean. Second, why is the loan holder showing it but not the IRS or the BFS? Is it possible it just hasn’t made it to them yet and the previous offset was for the one’s I successfully rehabilitated?
Nevertrustcolleges says
Ok , so I have many questions! Back in 2013 I was told for my daughter to get more of a loan for her stafford loan I would have to apply for a parent plus loan . I was reassured that I would be turned down since my husband was on disability and only worked part time . Needless to say that was a lie . This happened every year . So hear I am in major and I mean major debt for parent plus loans !!! Which should be illegal to begin with , seeing how we have no income other than my spouses and now my credit is total garbage . The past 3 years I have been on the income driven plan with $0 payment plan . I worry every year that they will take my taxes that we literally live off of. Is there anyway I can get the loans dropped since my spouse receives disability and will be on it for his entire life ? Any help is greatly appreciated!
Robert Farrington says
Here’s our guide to Parent PLUS Loans: https://thecollegeinvestor.com/17101/options-if-you-cant-afford-your-parent-plus-loans/
If you’re on an income-driven repayment plan, and your monthly payment is $0, you’re not in default. They won’t take your tax refund. Furthermore, as long as you certify your income annually, you’ll eventually get loan forgiveness: https://thecollegeinvestor.com/11856/secret-student-loan-forgiveness/
The bottom line is, you’re doing everything right and stop stressing about it.
Emily G says
I never received a letter in the fall about my federal being taken. My federal tax return was taken last year, but I entered into a rehabilitation program for my defaulted loans in January 2019. And I haven’t received a letter about the department taking it again. Should I expect them to take the refund again, and can I fight them taking the refund since I’m currently enrolled in the rehabilitation program?
Robert Farrington says
They will take it until you complete the rehabilitation program and get out of default.
Lizzy says
I just noticed all of my federal refund will be taken because of default. I just started working again in December. We had filed for divorce in August, but have received no help from him for our kids til this day. All of the income from takes was for my ex. We filed married filing jointly. I also have extreme hardship since I was unemployed for so long. I started a new repayment plan and the first payment has been made, but it was made a few days after I filed. I desperately needed the refund. Would the best way to get it, is to go back and get his portion back since he was primarily the one working? I have 3 kids and needed that to catch up on bills and not lose my house. Any help is appreciated.
Robert Farrington says
There’s no way to get it. If you’re rehabilitating your loans, you need to complete this process first – 9 payments, then make your first under your new repayment plan. So you’re looking at 10 months before it’s safe to not see your tax return offset.
Ieisha Essex says
When I call the number it says that I am in offset and my tax refund may be taken. Will it be taken for sure?
Robert Farrington says
Yes. 100% it will be taken. Get your loans out of default before filing!
Nicole T. says
Hi, Robert, I wanted to know how to go about this I had been doing a financial hardship deferment With NELNET student loans I normally renew my student loan in Dec. So in 2017, I went online to print off the form to mail in. I never heard anything back normally they send out a letter letting me know that I am in deferment and how long it will last. Now I’m being told I filled out the wrong docs and that my loan was returned to DOE in 2018. I called the offset number to check to see if I owed a balance None of January had a balance the day I go file my taxes after they have been filed it says I have an offset I’m hearing some ppl say they wouldn’t take them your first year and then I called the collection agency who has the debt for DOE and he has given me two options rehabilitation or consolidation neither will work for my situation if they are going to take my entire refund. What options do I have to not have my refund taking?
Robert Farrington says
If you’re in default, they can take your refund – plain and simple.
Rehabilitation is the best option. Consolidation is a runner up. You need to do this because honestly, your tax refund will become your smallest financial problem if you keep ignoring it.
If your income is low enough, your legal student loan payments could be as low as $0. Read this: https://thecollegeinvestor.com/22174/student-loan-default/
Nicole T. says
Same person I was also never notified I called to update my address wit nelnet thats how i found out my loan was returned to DOE. They never contacted me by mail or email for notifications. I was homeless for 3 years with 2 kids living in cheap hotels I finally have a place and I needed that refund. What can I do to get the refund?
Robert Farrington says
The only thing you can do is get your loans out of default. You can also adjust your W4 withholding so that you don’t get a big refund, but rather bigger paychecks.
Marissa s Smith says
Just because your debt is in the treasury offset hotline does it mean your tax refund will be withheld or are they just letti.g you know what debts you owe?
Robert Farrington says
If you have an offset, your refund with be withheld.
Kim says
So me and my husband filed jointly and this year my student loan defaulted. I called the company FH CANN that handles collections. Set up a plan and will be off the default status after the months I paid for it.. question is when me and my husband filed our taxes this year we filled out the injured spouse form that is supposed to cover him and my child from getting offset. How accurate is this? Or has anyone else done this?
Robert Farrington says
It works, but the amount of the refund will be prorated to reflect just that amount.
Second, you could have just waited until you were out of default and got the whole amount. You’re never going to get your portion back and that money is just going to go to waste.
Steven says
I’m not in default but I still got the tax topic 151 will they still offset my tax return?
Robert Farrington says
Yes, are you sure you’re not in default? It could also be due to taxes owed or other debts as well.
Christian says
The tax return has been withheld for 3-4 years. My student loan balance has not reflected those payments. I don’t understand why? I can’t even get a real person on the phone to ask why.
Robert Farrington says
Yes, those offset payments go to collection costs and accrued interest – rarely to your loans.
The only way to resolve this is to get your loans out of default and start making payments on your loans.
Jennifer says
If you call the offset number and they say you have a debt does that mean that they will DEFINITELY take your tax refund? Also when they say “debt” is that an offset?
Robert Farrington says
Yes, 100% they will take your refund.
Shaunell says
I started on a voluntary repayment agreement a couple months so I’ve made three payments so far to the default rehabilitation program does that mean I’ll still be offset or will they see that I’m making payments to the rehabilitation program?
Robert Farrington says
You need to complete rehabilitation and then get back on a normal repayment plan (i.e. be out of default), then you’re safe.
Jay Pettus says
I’ve just started the Rehab process. I didn’t know I would be offset for my returns this year… is there any way I can keep them from taking my refund?
Robert Farrington says
Negative. You have to complete the process and then you’re in the clear.
KeKe says
I completed my rehabilitation program and called the offset line and pressed option 1 to see if I had any offsets. It said NO, I had to call the IRS to get some information about my taxes and was told I had a hold on my taxes for a debt, she told me to listen to option 1&2 that I didn’t do the 1st time and it said I he 2 debts. Long story short I had 2 different lenders and all my other 8 loans were in good standing except 1 with College Foundation. I am so upset because the simple fact I’m confused as to why all my loans were not with US DOE. So my question is, “is there anyway I can just get them to take half of what I owe and make Payment arrangements? “
Robert Farrington says
Sadly, there is not.
Use this guide to make sure you find all your loans: https://thecollegeinvestor.com/19370/how-to-find-out-who-owns-your-student-loans/
Jameise says
I defaulted on my student loans and apparently missed the deadline to make arrangements towards repayment and may be subjected to my taxes being taken. I haven’t filed my taxes yet. My student loans are in collection. If I make a payment arrangement with the collection agency, will they still take my refund?
Robert Farrington says
Yes, they still will take your refund. You need to complete the process and get out of default to be safe.
dstewart says
i recently just applied for a loan settlement with 90 days to pay it but i did this after I already had an offset on my tax refund, will they still offset my refund after the settlement aggrement has been approved, and if so will it be for the full amount or the settlement amount?
Robert Farrington says
A settlement doesn’t change the offset. Only rehabilitation or consolidation will. However, once you settle, the loan should be done and paid so then it will be clear.
Rachael says
I owe 10,000 in student loans and am in the process of consolidation but have not completed I am expecting them to take my taxes so if they take my full 8,000 that would only leave me 2,000 left to pay do you know if it would go straight to my loans and if it will come off of my credit report?
Robert Farrington says
They would take the full amount, and it would mostly go to collection costs and fees – so very little if any would go to your loans.
My suggestion is that you wait until you complete the consolidation process and get out of default, then file your taxes, then use that money to pay off your loans.
Shannon says
I Am Currently In The Rehiblation Program And They Took My Tax Check I Was Not Notfied By The US Department Of Education I Make My Rehiblation payments on time every month. I am not sure what to do at this point!
Robert Farrington says
They will still take your refund until you complete rehabilitation and are back on a normal repayment plan.
Michael L Prisbrey says
My loans got sent to a collection agency and I have been making payments to them for at least 6 months but now my return is being taken is that ok?
Robert Farrington says
That’s to be expected… read the article and the comments above.
Jonathan says
I have made my first payment on rehabilitation program for a federal student loan. When I call 8003043107 it still says I have one offset with doe. Should I wait to file this year’s taxes till it says there isn’t an offset when I call ? Or will it be okay because I have already made a payment. How long before the IRS is notified I am not in default . Thank you
Robert Farrington says
You should wait to file until you complete your rehabilitation program and make your first payment on your loan with your new lender under your new repayment program. Otherwise, you’re going to see your tax return offset like all of the commenters above.
Tony Myers says
My wife doesn’t work (no taxable income) and hasn’t worked for years, we got married last year. we filed jointly this year. Can my refund be taken for the debt she made before we got married, like child support?
Robert Farrington says
Yes, but there is a form you can file called “Injured Spouse Relief” and have your portion of the return protected.
Toya says
Never received any notification about loan was in collections or offset. Called offset number ssn didn’t have any debts or anything. So I’m lost on how they were able to take my refund.
Robert Farrington says
You need to find your student loans and see what’s going on: https://thecollegeinvestor.com/19370/how-to-find-out-who-owns-your-student-loans/
Sarah Armstrong says
So I just found out that my taxes were taken because of student loans. I did not receive a letter, email or phone call about this. Is there any action I can take because I was not made aware of my loans being in default before doing my taxes? Mind you I have already talked to DOE and they just ignored me saying how I never received a letter warning me of this.
Robert Farrington says
No, if you’re in default on your loans, you’re subject to having all government payments offset. They don’t need to make you aware, as you were in default and it’s your responsibility to know the status of your debt.
Tiffany39 says
I applied for borrowers defense 2/12/19 my claim went under review 02/13/19. I spoke with myeddebt.edu 2/14 and I was told that stopped collections was placed on my defauleted account immediately as of 02/14/19, not to worry if my taxes were taken, that I would get them back just would take about 45 days to request a refund, but most likley because of the stopped collection I wouldn’t be offset because my stopped collections effictive 02/13/2019 or what ever date the myeddebt.edu received the update from borrowers defense. I was told 3 times I would recieve a refund do to the borrowers defense claim and all collections have stopped and that my account was inactive.
I spoke with TOP 02/21/19 they said they had a debt for school loans that may be offset, but the refund hadent posted yet… and that they were waiting for there system to update. I call friday night because I am a weekly update and it says my whole $5680 tax refund was offset for school loans. and that next 2/27 was my deposit date.
… My question to you is,
1. Is this true?
2. Can that offset be reversed due to stop collection before deposit date?
3. Have you ever heard of borrowers denfese claims receieving offset refunds back with defaulted school loans?
4. And if so how long will it really take for me to get my refund back?
Robert Farrington says
Did you file your tax return before you filed your borrower defense claim?
1. Is this true?
– Yes, it’s probably true but we don’t know, we’re not you or the BFS
2. Can that offset be reversed due to stop collection before deposit date?
– It can be if you’re out of default and the Department of Education removes the collection before your payment is disbursed. You’re running a high risk – these organizations move slow…
3. Have you ever heard of borrowers defense claims receiving offset refunds back with defaulted school loans?
– Never have seen it
4. And if so how long will it really take for me to get my refund back?
– I’ve never seen an offset refund given back. I highly doubt you will.
Tiffany39 says
No I didnt file before I my taxes. The process for me went very quick honestly with in 3 day of filing my application it was put in review with stopped collection almost immediately..
I actually just spoke with the team member, she stated that due to my account being inactive / suspended as of the 15th before my refund was credited to my student loans my entire tax refund will be refunded to me my refund. Once offset post to my account they will request refund which will take about 45 days… Then 3 to 4 weeks after that to receive refund.
Robert Farrington says
That’s great – come back and let us know if it actually happens!
Tiffany39 says
I was wondering how you know so much about the student loan process? Do you work for to know so much information? the DOE, IRS are you a lawyer, student, or ?????
Please reiterate for us…
Robert Farrington says
Check out my about page! I’ve been helping individuals and writing about student loan debt for almost a decade.
If you have success, you’ll be in a rare place. I’m asking you to come back and share because that would be a great win.
I do sense a bit of sarcasm in your reply, so I’d also caution you that you’re getting my free opinion and resources here. It’s the internet, and we have no relationship nor ever will.
Hollie says
Hi Tiffany, your situation is the exact as mine. I found out on February 21 that my taxes were being offset for student loans from 16 years ago. I immediately filed for forebearence and stop collection 3 days later. How did you find out it was accepted right away? What should my next steps be to find out information like you did?
Natusha says
I had part of my taxes offset I was not sent a letter I made arrangements to start a payment plan next week my taxes have not yet been released will they stop my whole refund take out the offset amount and then send it at a latter date to my bank account? Also will the us education department get offsetting my taxes while I’m on a payment plan and making my payments on time?
Robert Farrington says
Read the article and the comments above. Until you get out of default by completing rehabilitation, you’re going to see your tax return offset.
Joe says
I am 4 payments/months into a rehabilitation program (5 to go). When I file my federal income tax return, I expect to receive a refund. I should wait to submit my federal return until I’ve fully completed the rehabilitation program, correct? And if so, how do I know exactly when I can file my return? That is, they view the student loan as out of default and won’t take my return. My last rehab payment will be in August. Who/where do I check/verify it’s safe to file my fed return?
Robert Farrington says
Yes, that’s our opinion – you should wait until you complete rehabilitation and make your first payment under your new Federal repayment plan. You’re safe when you’re student loan is no longer in default status – which you can also check on the NSLDS or your credit report.
monica says
i called the offset number and it said i didnt have a offset when i choose option 1 and then i press option 2 and they said i had a student loan offset but they may or may not take them and i check my status for refund deposit on santa monica and republic bank and they dont have any records of my deposit so does that mean they took my refund already and keep in mind im making payments and im caught up in good standing but when you check the dep of education they say im still at default how is that???
Robert Farrington says
Who are you making payments to? A debt collector or an actual student loan servicer? Are you on a rehabilitation plan?
Brandon O'Reilly says
I tried to track my return and it said that it was taken due to a past debt and i was given a number to contact the bureau of fiscal services. i called the number and entered my information and it says at this time there are no debts associated with my social security number. Is there still a chance i can get my refund?
Robert Farrington says
If it’s already been taken, you’ll receive a letter in the mail stating why and options to dispute if you believe it to be incorrect.
Brandon O'Reilly says
Looked up the status of my return and it says it was offset. I called the BFS number and it says i have no debts linked to my social security number. So am i getting my refund or not? And if not, any clue as to where it’s going or what i can do to find out why it is in offset?
Robert Farrington says
If your return is offset, they’ll send you a letter explaining it, and options to dispute if you believe it to be incorrect. If you are in default (which you would know), then it’s probably valid.
Laurence says
How likely is it to get a hardship refund if you qualify under their criteria?
Robert Farrington says
Its rare, and a process, but it does happen rarely.
Chave says
My refund from 2017 last year was taken due to the offset program. Can I use the amount that was taken as a deductible for my 2018 taxes. Been calling all the numbers that are provided but nothing that can answer my question.
Robert Farrington says
No, the amount that was offset has nothing to do with your taxes – that was due to your debt.
Maria says
My entire taxes were taken because of my student loans that i am
NOT in default! What do i do now? I am so upset.
Robert Farrington says
If you’re 100% sure you’re not in default, you need to dispute it. You’ll get a letter to dispute it, but you can also call the Department of Education.
However, make sure you check your loans first and validate: https://thecollegeinvestor.com/19370/how-to-find-out-who-owns-your-student-loans/
Essence says
I had a student loan that went into default.My 1st two years of filling they took the whole thing both times. Then afterwards i received my return as normal for 3 years straight. This year i was garnished again. How is that possible?
Robert Farrington says
The Department of Education has been changing debt collectors over the last few years, and your loans could have been part of the changes.
Did you ever remember seeing things about your loans being transferred or returned to the Department of Education?
Kathy says
If they have questions taken your taxes for a default but you know that your income would’ve made the payments $0 a month right now, is it possible to still get your refund sent back to you?
Robert Farrington says
No. And if you know your income driven payments would be $0, why not get on that plan and out of default ASAP?
Mary Beth Walls says
My daughter’s federal tax refund this year will be greater than the amount that she has to repay the IRS. Will she still receive a refund for the remaining amount or will they take all of her refund and then send her the overage?
Robert Farrington says
She should refund of anything not needed for the offset.
Edna Soto says
I have had my refund taken for the past 3-4 years. Does the money they take go towards any of the interest or principle of the default student loan? If the account is with an agency where do I go to find this out? The agency or the DOE?
Robert Farrington says
It goes to collection costs, fees, accrued interest, then any remaining amount goes to your loan balance. But, if you’re in default, you’re loan then goes another 12 months of interest and fees, so when you get your next tax return garnished, you’re probably in a worse spot than before.
So, unless you had a tiny balance, you likely are seeing your loan grow and grow even with the tax offsets. You need to get out of default ASAP: https://thecollegeinvestor.com/22174/student-loan-default/
Deanna says
My taxes was taken and I didn’t even know I was in default. I had to search to find out who these people are that took my taxes. The only people that I knew of was navient and it’s not them, that took my taxes. I’m didn’t receive a letter, no phone call, nothing! What can I do about this? I want to fight this, if I would have received a notices, I would have handle the situation properly.
Robert Farrington says
First step is to find your loans and see what’s going on. We’ve seen things where you had 1-2 loans that weren’t at a loan servicer (like Navient) and were missed. Read this: https://thecollegeinvestor.com/19370/how-to-find-out-who-owns-your-student-loans/
Harry says
I had no federal offsets in place, I called prior to filing, the day before I was supposed to receive the refund, and even now, 10 days after them sending my refund to US Dept of Education, there are still no offsets in place, but yet it was taken. I was in-between a bankruptcy and prior to that, I was in a rehab program. Can they still take my refund even if I have no offsets in place?
Robert Farrington says
If you were in default, they can 100% take your refund.
Bankruptcy doesn’t discharge your student loans in 99.999% of cases. If you were in a rehab program but then stopped, then you probably are back in default.
Jaqueline says
so I had my entire taxes offset for student loans but at the moment I was waiting for those taxes because I lost my job and I’m currently behind all my bills.. I called and they gave me a number where I can try and tell them of my situation but they won’t answer and I’m desperate to at least get some of that refund back…
Robert Farrington says
Sadly, if you don’t have a qualifying reason to get your offset back, you won’t get it. If you take action on your loans, your monthly payment could be as low as $0.
Jay says
I rehabilitated part of my loans last year and recently had all of my loans consolidated. None of my loans are currently in default. I previously had one offset for a defaulted student loan. After this loan was consolidated and came out of default, the servicer advised they lifted the offset and sent a letter to the TOP to update the offset. However, when I call the hotline, the offset is still on there. Should I wait to file taxes until the TOP hotline is updated? How long does it take for the TOP to update? When I talk to the servicer that put the offset on, they keep saying i don’t have an offset but if my refund gets sent to them then they will forward it to me. I honestly don’t trust that information and want to make sure it’s safe to file. Your support is greatly appreciated.
Robert Farrington says
How long ago was this? I would wait until it’s clear, unless it’s been a significant amount of time.
Given the backlog due to government funding and the shutdown, I wouldn’t be surprised if it took 60 days or so to clear it.
Jay says
The consolidation was complete in January and the servicer confirmed they lifted the offset around the 15th of January. It hasn’t quite been 60 days yet, but it’s updated on my credit. I was getting concerned there might be an issue with the offset being lifted, but I will give it some more time. Thank you for your advice!
Robert Farrington says
Have you made your first payment under your new repayment plan then? If so, you’re usually safe, but since you also don’t have to file your taxes for another month, I’d wait.
Jay says
The consolidation company applied a forbearance on my account so my first payment isn’t due until April. Would it help if I went ahead and made a payment?
Robert Farrington says
I would just wait – your tax return isn’t even due until April anyway.
Korbyn says
My student loans are in default but I started a loan rehab back in April of 2018. I’m went back to school in August 2018 paying out of pocket because I cant get finaid until my loan is out of default. Can my refund still be offset for the amount I’m paying for school?
Robert Farrington says
Yes, it can be offset until you complete the rehabilitation agreement. You started that in April 2018 and they usually last 9 months, so are you done yet?
Maurice says
Does the balance decrease with every tax return they take? My tax return has been taken for the past 7 years.
Robert Farrington says
Rarely. What usually happens is you refund goes to accrued interest and fees. But, then you’re not making payments all year – so the balance and fees continue to grow. So by the time you’re seeing your next tax refund taken, you’re in a worse spot than before. And it will only continue to get worse.
Brittany says
I received a date of March 13, 2019 to get my taxes back but then found out that they will be offset. Do I have time to contact the department of education to stop the offset?
Robert Farrington says
No, anything you do to stop your offset will only start now and hopefully you complete the process before next year’s taxes are due.
Ashley Gilpatric says
so my husband owes about 25 thousand in student loans. I know that I will be responsible for this as well and my tax return will be offset. We havent set up payments yet but are about to. Do we have to pay off the entire loan in order to stop the offset? or can I make a certain amount of payments and stop the offset? I earned most of the tax money myself, and my husband stays home with the children. Is there any way they could give me back my portion on the refund? any advice?
Robert Farrington says
If you filed jointly, you can file injured spouse and get your portion of your tax refund.
To stop the offset, you need to get out of default. Here are your options: https://thecollegeinvestor.com/22174/student-loan-default/
Adrian says
Last year my tax refund was taken due to defaulting in student loans. I just found out that my return was approved today. I called the offset number to see if it would be taken but it didn’t list anything that will garnish my return. Does that mean I’m in the clear of getting my tax return??
Robert Farrington says
Did you get your loans out of default last year? If not, then yes – you’re probably going to see your return offset this year as well.
Adrian says
I didn’t. but I called the offset line and student loans wasn’t listed on the automatic line.
Samantha says
Hi so I started a loan rehabilitation program about 4 months ago but I started a loan consolidation with NLDS (I believe) for the income driven repayment program or one of those that’s like $0 a month. I haven’t started paying on the consolidation yet because it takes them a while to consolidate the loans. So even though Im still in the rehabilitation program and consolidating my loans, after I make my 1st payment on the loan consolidation I should be ok to file my taxes? Or can I not do both at the same time(rehabilitation and consolidation)
Robert Farrington says
You shouldn’t do both at the same time. Why are you rehabilitating and then consolidating?
For taxes, you need to ensure whatever process you pursue is completed.
Samantha Stewart says
Because my student loans are in default. I would like to do whichever one would make it so I can file my taxes sooner. Should I just consolidate?
Robert Farrington says
We don’t recommend that: https://thecollegeinvestor.com/22174/student-loan-default/
Samantha says
I have a tax offset. I researched what to do. The 1st thing that I kept reading about was doing the rehabilitation for 9 months. But then I heard of loan consolidation and that doesn’t take as long. I would like to do whichever one would help me to file my taxes sooner. Which one should I do?
Robert Farrington says
We strongly recommend rehabilitation vs consolidation. We break it down here: https://thecollegeinvestor.com/22174/student-loan-default/
Bottom line is that rehabilitation will help your credit, and consolidation will keep the default on your credit.
Samantha says
But if I want to file my taxes sooner, I should do a loan consolidation instead of rehabilitation? Since rehabilitation takes 9 months and consolidation takes them about a month I was told to get everything together. I understand my credit is important. But right now my family needs this tax money badly.
Sam says
I entered into a lump sum settlement with Lender. I still have 60 days left but they took my tax returns.
1. Can I contest since I entered the lump sum agreement?
2. Will the amount go towards Lump Sum Settlement?
3. If no, Can I get a refund of my tax returns if i make the lump sum payment?
Robert Farrington says
1. No, only if the agreement was completed could you fight the offset
2. I don’t know – that’s between you and the collection agency that you setup the agreement with. I would argue with them that you should get that amount taken off.
3. No.
Samantha Stewart says
But doing the consolidation would go faster and I’d be able to file my taxes faster then waiting the 6 more months for the rehabilitation?
Robert Farrington says
Consolidation will be faster – it will take about 2 months. But it also will damage your credit for the long run. So, your refund today is say $2,000, but due to your poor credit, things will cost you more than that over the next few years.
Wendy says
My husband and I filed our taxes last year as married filing jointly. Our entire refund was taken for my defaulted student loan …. I am currently working on setting up a payment plan with them to get my loan out of default …. It is time to file taxes again. I have very little to no income not even enough to receive a 1099 . So if my husband and I filed separately would that stop them from taking his tax refund this year ? I have already been told my return would be taken again this year …. Thanks !
Robert Farrington says
Yes, he can also file for injured spouse as well.
It sounds like you’re close to setting up your payment plan, so you can also wait to file until that is complete.
Christalyn says
My income taxes were taken for an offset, but I was told by the company that has my loan the ask for a hardship. How do I go about doing that? I’m in a repayment agreement with the loan company already. Is there a form online or a number to call? They told me to call the department of education but they are so busy it disconnects you. Thanks for any help.
Robert Farrington says
You can contact the Department of Education Default Resolution Group: https://myeddebt.ed.gov/borrower/contactusSubLinks.action
Ashley says
I did consolidation My student loan says default i made my tgree payments waiting for new lender but im out of offset can i file my taxes
Robert Farrington says
I would wait until you make your first payment on your new consolidation loan to be safe.
Ashley says
ok So even if they took me off offset they can still take my taxes
Amber says
Hi-
I just entered a payoff agreement with a collection agency and have 90-days to pay off the loan. Taxes are due in the meantime and i received an offset notice in the fall. Will they still take my taxes? Thank you for the advice.
Robert Farrington says
Yes, if you’re getting a refund, wait until after you payoff the debt and the offset is removed!
Yashira Ortiz Rosado says
Hi, I have a loan rehabilitation and recently March 21,2019 I made a repayment, In my credit report doesn’t have anymore the student loan default and either when I call the offset number… My taxes were taken on February 27,2019 and when I call DOE what it says ( no debt) Do you think I can get my taxes refund back?
Robert Farrington says
No, you filed your taxes too early… read the article and comments above.
Sally says
Thank you for all the information. My loan is 19 years old, and refund was taken. Is there a number I can call to find out if I owe more money or if my refund took care of the full amount owed? I do not know the holder of my loan. Thank you.
Robert Farrington says
You can find the contact information here:
Department of Education Default Resolution Group: https://myeddebt.ed.gov/borrower/contactusSubLinks.action
Also, look at this guide to find your loans: How To Find Your Student Loans
Yvonne L says
What if I just revived the letter in January from the Department of Education and returned everything they wanted, found out in March what the payments were going to be along with my due date in April. How can they take taxes if I just got back all of the information I needed to complete a payment?
No where on the letters does it state that I need to send a payment in within the 60 day time frame that they are now stating that I did not comply with.
Robert Farrington says
You’ve also been in default way longer than when this letter arrived. Just being in default gives the government the ability to garnish your tax return. You also don’t have to file your taxes right now, you can wait until you sort it all out with the Department of Education.
Marq says
I am in repayment with pioneer (Navient/Ascendium) and was told they weren’t suppose to take. I’ve been approved for it to be returned but been waiting since Feb 22/ March 18/ March 22. I was told I’m waiting for Dept of education to approve and say “cut check” I feel like I’m being thrown around. I just want my 6400.00. She claims it was due to gov shutdown but sheesh..they shutting me down at this point. I’ve been on hold for over an hour waiting for someone to give me and my family A REAL DATE THEYRE RETURNING MY MONEY!!!
Robert Farrington says
If they took the refund and you’re getting it returned, it usually takes about 9 weeks. It’s a long time…
Shika says
I just got in the rehabilitation program, do I need to do an extension for my taxes. The program says it takes 5 out of the 9 months to stop taking garnishments. Will they take my taxes in June?
Marq says
Who do I contact to expedite? I was told they cut checks every Friday but nobody seems to know who has authority but they were quick to intercept? Naivent said they’re waiting on ascendium and ascendium said they’re waiting on navient.i called dept of ed they claim it should have been returned since Guarantor returned it
Robert Farrington says
And it will be returned. It just takes about 9 weeks sadly. There isn’t anyone to call to expedite.
Rachel Young says
So my fiance stays home with our son and does not work but his student loans are in default, will my refund be garnished if I put him down as a dependent?
Robert Farrington says
Claiming him as a dependent should not have any impact on your return.
Nina says
So my situation is last year I had my taxes taken for student loans so I applied for the income-based payment plan I had $5 taken out of my account every month yet this year my taxes were taken again. Apparently I did not provide all the information needed to qualify for the income-based program yet they continue to take $5 from my account and refused to refund me the $5 or the tax refund. My question is if I am making payments how is it legal for them to also take my tax return. If I did not qualify for the program money should not have been taken out? Right!??
Robert Farrington says
Until you complete loan rehabilitation and get on a real income-based repayment plan, you’re technically in default. As long as you’re in default, they can take your refund.
Amanda Leon says
So the irs took my tax refund this year for my student loan debt. What can I do so they won’t take it again, or is it just bedt to let them take it to pay down the debt?
Robert Farrington says
Really bad idea to let them keep doing this – your loan grows, this amount taken only goes to fees and interest, and the cycle continues. You have to get out of default. Read this and follow the directions: https://thecollegeinvestor.com/22174/student-loan-default/
Jeremy says
I have been in a contract for repayment of my student loan for several months.Its not the rehab, it’s repayment but my tax return was just taken by the doe.I thought they couldn’t take it since Im in a repayment contract and have made several payments on time.
Robert Farrington says
You need to complete your rehabilitation agreement before you’re considered out of default.
T says
I just filed my taxes from 2016 and 2017 they still haven’t been processed as of yet. However I am defaulted on my student loans. I called the number a few times to check if anything was sent for offset and it kept saying nothing was sent over. That was until I called last week. Would that mean my back taxes are subject to be offset or just anything from the point it is sent over? I still haven’t completed my 2018 refund as I don’t know if I should wait until after consolidation is complete.
Robert Farrington says
Yes, any payments you receive (whether from back taxes or current taxes) are subject to offset.
Chelsea says
I just completed my 9 payments for my rehabilitation program through Fh Cann. They are currently looking for a new lender. I wanted to make sure that when I file my taxes next year, they won’t be taken. I am going to continue to make payments until they find a lender, but I just wanted to be certain that this wasn’t going to interfer.
Robert Farrington says
It shouldn’t “take time” to find a lender. Your loan is pretty much automatically transferred back to the Department of Education. If it’s been more than 15 days since you made your final payment and you haven’t heard anything, you need to follow up and also check your NSLDS.
Joslyn says
My son…A 80% disabled Marine Vetran , sole custody of 2kids, & 1 on the way, is in offset w/federal student loan. $5k+ Tax return has been seized w/no advance warning! Now the $ he intended to buy car for kids & get ready for #3 is gone. He is not working in the field he recieved the training & loan for, 2010-14 (tons of expensive tools) now working a min-wage job, barely able to stay afloat, more than not going into more debt every mo..
Is there any kind of program to help get him out of default so he can actually get a refund in the future. He was a desiel mechanic in the Marines & then got certified & loans for licensed mechanic. But working in this field causes PTSD flairs & flash backs! Any help or ideas that U might have to help us would be GREATLY APPRECIATED!!!!
Thank U for U’r time!!!
Robert Farrington says
He needs to get out of default by rehabilitating his loans and then getting on an income-driven repayment plan. If his income is truly that low, his legal monthly payment could be $0 or very little.
Read this: Get out of student loan default.
Jordan Monroe says
Thank you for the article. I have a question. I filled a 2018 extension on my taxes, and during that time i started the student loan rehabilitation program. Since then my name has fallen off the offset list. I’m sending in my filing now before my extension deadline of 10/15. Will this allow me to get my 2018 refund back?
Kindly,
JM
Robert Farrington says
If you’re no longer in default, they won’t take your refund.
Ashley Anderson says
Hey.
I did the 6 payments rehab program and still paying but after my 6months they said I was good to file so I filed 1 month after they sent a letter to the offset treasury department. Well my tax advocate today said there was an offset for the U.S. Department of Education. Well I called and spoke to a supervisor and they said I did everything right and I didn’t everything I was suppose to do and they said they escalated the issue and they said they would send me a check and it could take up to 45 days . Anyone ever been in that situation?
Robert Farrington says
Yes, many people have – see the comments above. That’s why we always recommend you complete rehabilitation 100% (i.e. doing the full 9 months) before filing.
SHARELLE L NEWBY says
Ashley did you ever get your refund from them?
Michelle says
So I had private loans back in 2003. My credit report shows them closed in 2009, and paid in full. and all loans state $0. So now the DOE has taken my tax refund because this private non-profit loan company was taken over by the DOE in 2011. How can they go after my tax return? How can the government take my refund if I never signed loan documents with a Federal Loan Program? Any advice if I should fight this.
Robert Farrington says
Are you 100% positive you didn’t have federal loans? A lot of the same private loan companies also service (or used to service) Federal loans as well. In other cases, people have a mix of loans, assumed all were one type, and had this happen.
It’s worth consulting a lawyer to validate the debt and see what can be done to stop the offset given what you said here.
Jasmine says
Will they take your income tax if you are under an economic hardship deferment?
Robert Farrington says
If you are on a deferment, you’re not in default. However, a better option than an economic hardship deferment is usually to switch to an income-driven plan, where your legal payment could legally be $0 per month.
Samantha says
Hello,
Past tax season my taxes were offset the entire amount because of my defaulted student loan. I just started into the Rehabilitation program (october 2019) will my taxes still be offset come February 2020…do i need to wait the 10 months before filing my taxes so they will not be offfset?
Robert Farrington says
We recommend you complete your rehabilitation program before filing your taxes. See all the comments above and our article!
Jennie Clay says
Hi. I received a letter from The Department of Education back in March 2019 saying The collection Bureau of Maryland had my student loans and I was set for offset. I called and the guy set me up on the repayment plan making 6 consecutive payments and the offset would be cleared. So I began that. I called in September to check status as I would be filing by October 16th. That person said I had other student loans that were not eligible for rehabilitating repayment and the offset was not cleared and I needed to call The Department of Education. The person at DOE said that they aren’t handling anything with me it’s all been turned over to the collections, but that my offset cleared in August 2019 and that I would get my refund. So I have conflicting information. I filed my taxes on October 11. The where is my refund page shows approved, but there is a topic 203 statement, but when I call the Treasury offset number it has no offsets showing for my social. Do you think I will get my refund? Also, the agency that has my loans does not do consolidations, how can I get a new agency to consolidate so I will have one payment. How many loans can be offset at one time?
Robert Farrington says
You need to follow this guide and find all your student loans and check the status of each and every one: How To Find Your Student Loans.
As for the offset, you’ll likely NOT receive your refund.
Aremoja says
I was attending a community college, and my employer third party was paying for school, the school changed their payment plans and the third party never payed them, they added the full balance to my student acccount, I never knew until it was sent to collections, recently the school took a tax relief that my state issued, i had no type of loan just a balance, is the school allowed to just take any of my tax returns?
Robert Farrington says
Possibly – your state likely has a law about it for state tax returns. It’s best you work with your employer and the school to get this settled ASAP.
Sandi says
Who can tell me if the TOP offset hotline says NO OffSET but I was offset last year and i still am in default…do they have to redo the offset? Send me a new letter? Give me oprion to fix? Or is the first letter i received before last year offset emough? Like last year 2 weeks before filing i checked offset hotline was told no offset…and i am again today
Robert Farrington says
No, if you’re in default, they will take your tax refund. The option to fix it is to simply get out of default. Read this: Get Out Of Student Loan Default.
Lynn Payne says
So I’ve had my income tax taken and they told me at the student loan that my money didn’t count towards paying on loan that it was an involantary payment when it was enough to pay off my loan. They have taken like 3 different tax returns who would I need to talk to about this as it’s in a collection agency I’m tired of letting this be a problem , how could someone take your money and say it don’t count we worked hard for that money and it makes me so mad to be treated this way
Robert Farrington says
The money they take goes to fees and collections costs, accrued interest, then principal. And since your loan grows all year, it doesn’t make a dent.
You need to follow the steps in the article above, get out of default, and start putting that money towards your loan instead of letting them profit from you.
Monica Noriega says
I didn’t receive any notification that my taxes were going to be held last year my question is is there anything that I can do now to stop them from withholding them again and me possibly entering into some kind of repayment program or is it to late
Robert Farrington says
Yes, read the article above – rehab your loans, start making payments again. It takes 10 months. You’re likely going to want to resolve this, then file your taxes late next year.
Catherine says
I have completed the 5 monthly payments. Should I wait to file my taxes til I have completed the full 9 months? Also will they still take my taxes?
Robert Farrington says
That’s what we recommend.
Kenya Slater says
Hello I just started making payments to Us Dept of Ed. And he told me I have to make 5 months of payment so they wont take my taxes. If I file in March will they still take my taxes.
Robert Farrington says
We recommend you complete rehabilitation completely before filing.
T. Smith says
My student loans are in default. Last year my taxes were offset and they started garnishing a percentage of my check. If I file bankruptcy now, I know it will stop the wage garnishment, but will I be able to receive my tax refund from 2019, if I file now January 2020?
Robert Farrington says
No, bankruptcy will not help you with your student loan debt (or your tax refund). You need to get out of default on your loans – read the article and start the process.
Ryan says
I’m in rehab payments, but will not have paid on it long enough to file and not have the offset. Would it be best to not file or file and apply the refund to next years return? I wasn’t sure if I apply it to next year’s return as a credit, if that means they cannot take it.
Robert Farrington says
There’s no harm in not filing until you’re done with rehabilitation.
Shevonne says
In 2018 my taxes were off set due to my student loans immediately after i found that out i signed up for repayments, I’ve been paying my monthly payment through the repayment plan i have set up. Am i safe to file this year?
Robert Farrington says
You should be, but you can call the offset number and confirm you don’t have an offset.
Shika says
I have an offset with DOE, I just got in the rehabilitation program, do I have to file for an extension to receive my taxes? The letter I received said that after 5 of the 9 payments all garnishments will not be taken, so do this mean I can file for my taxes in June??
Robert Farrington says
Correct – you don’t have to file anything if you’re expecting a tax return. Just file when you’re out of default.
Liz says
I am getting my wages garnished for student loans. Can they still take my income tax return@
Robert Farrington says
100% they will. You need to get out of default to stop the garnishments and get your tax return. Plus, all these garnishments aren’t even going to your loans – just collection fees and interest.
Din says
I’ve been on an approved IDR for the past several years, and last year 2018 and now 2019 TOP states that my student loans are in default. I’ve never been notified of any issue. How do I show that I’m not in default?
Robert Farrington says
Are you sure you’re not missing a loan? Sadly, we’ve seen people get on a repayment plan for almost all their loans, only to find out they forgot or didn’t know about one. Check out this guide to track down your loans.
Brandi says
I have already filed my 2019 tax returns only to find out afterwards that I have a tax offset for student loans in default. I have entered into a loan rehabilitation program but just started making payments is there a way I can still receive this years tax refund ?
Robert Farrington says
If you’ve already filed, no. It will be offset.
SayItAintSo says
I have completed my rehabilitation program last summer after having my refund offset last year. My current loans after the rehabilitation program were transferred to another lender and I have made my first income based repayments months ago with this lender and I called the offset number and says that I have no offsets as of today am I good to file? I also have a full payment coming up on the third of February I am also in the process of changing my payment plan to a income based driven repayment plan to lower the payment that I have coming up. I need my refund and cannot lose it two years in a row.
Robert Farrington says
Yes, if you’re out of default you’re good to file your taxes.
Latrisha Brown says
So i got a letter from the irs about my tax offset in dec. 2019. The Department of education set me up with a mini. payment plan and i paid my first payment Jan 10th 2020. I called the number for offsets and the student loans are the only thing I have in offset. So if i am in the payment plan will they still take my tax refund from me when i file my 2019 return?
Robert Farrington says
Yes, they will take your refund until you’re out of default. Complete the rehabilitation program and then file your taxes.
Malia says
My Student loan was in default, and turned over to collection agency. My whole tax refund was taken. I am in a rehabilitation program and it has been 5 months going on 6 months of paying. I called multiple times to the agency handling my student loans, confirming if they will take my tax refund, they (have their names and dates I spoke with them) informed me that they will not. Reading the comments, I am not comfortable with filing my tax return.
Robert Farrington says
We agree – complete the process. Wait until you’re done and then file.
Mal says
I had defaulted on my student loans, but went on a rehabilitation plan to get them back in good standing. Now it is tax season and I am hoping to keep my return this year!
I contacted the rehabilitation service I have been making payments to, and the woman I spoke to said that I am now “invalid” for having my taxes seized. However, on the NSLDS website, my loans are still listed as defaulted. Will my tax return still be taken for student loans? The woman at the rehabilitation service said it could take up to 60 days to have the default status removed from the loans. But I’m not sure where that leaves my tax return. Some insight please! Thank you so much!
Robert Farrington says
We recommend waiting until you make your first payment on your new plan out of rehabilitation to make sure you’re good. Too many people try to file their tax return immediately, and see it garnished. Patience – wait it out. It will save you a lot of headaches.
Tim says
They took my return last yr and it says my school loans are all paid off and closed so why did something just take them again this year on my mohela it says loans been paid in full so what took my refund
Robert Farrington says
Are you sure all of your loans are paid off? Sadly we see too often people didn’t know they had a single loan (maybe an older Perkins loan or similar). Check this: How to find your old student loans.
Tim says
I haven’t got letter or nothing saying they taken it but I got direct deposit of 50 dollars from taxes but was susoose get 1057 so how can I find out why it gone or who took it
Robert Farrington says
The letter sometimes takes a few weeks to arrive at your home. You can always contact the IRS or BFS (see the above article).
Note: it could have also been an error on your return (not an offset). If there was a simple mistake or math error, the IRS will just fix it themselves and send you a letter alerting you to what you did wrong and what they fixed.
Amanda Hailstock says
Last year our entire income tax was offset for my husband’s student loans. We immediately started a payment plan for the loans. Will he lose his ince tax again this year?
Robert Farrington says
If you’re still in default, yes. If you’re out of default and back on a repayment plan with your lender, then no.
Amanda Hailstock says
It’s a payment plan through a collection agency
Nicole M Farrell says
If spouses file a joint tax return and a refund is applied to one spouse’s past-due debts, the “injured” spouse can file Form 8379 to get their share of the refund. An injured spouse form can be filed with a joint tax return, amended joint tax return, or afterward by itself.
Robert Farrington says
Correct – see this: Filing Injured Spouse Form 8379 for Student Loan Debt Offsets.
Nicole says
They took my tax return last year without an offset notice and I called and they weren’t on there and now they are when I filed today. I am assuming they are taking them again. However the money they took last year is not showing that it has been applied and they are going for the full amount again! Kind of dumb I have to pay back loans from a school that got sued by the federal government and the degrees are now worthless!!!
Robert Farrington says
Well, two things. If you’re in default, they will take your return again. And your return gets applied in this order – collection costs, accrued interest, loan balance. Rarely does any money make it to your loan balance.
Second, to stop this madness, you simply have to get out of default. If you were defrauded, you can apply for Borrower Defense to Repayment and see if you can get your loans forgiven. But simply taking no action won’t change anything.
Molly says
Last year in October of 2019 I started making payments to get my loans out of default with collection agency. I was not given any notice by DOE they would offset my tax refund. I also did not know that I needed to wait to file my taxes until the 5th payment had been made to the collection agency. I filed my taxes end of January this year only after the 4th payment had been made to collection agency (if I was notified of this I obviously would have waited to file after February). Is there any chance I could appeal the offset since I was not given any notice they were going to do this? In the letter I received once my taxes had been filed it stated that they are required to notify me explaining the amount and type of debt I owe, the rights available to me, and the agency’s intention to collect the debt by applying my refund.
Robert Farrington says
No. You needed to complete rehabilitation to avoid the offset.
Cindy says
I am in default with my student loans I made alogin with fsaid and was able to view the debt I owe. I want to start a payment program to start paying it again. My question is if they are in default and I start at repayment with them will they still take my taxes or is it best to wait?
Robert Farrington says
Yes, they will take your tax return until you’re out of default and back on a “normal” repayment plan with your lender. If you rehabilitate your loans, that takes 9-10 months.
B.J says
So about how long would it take for me to get the remaining amount back after taking what’s left of my student loan? Say I owe only $1,000 but am getting $3,000 back. I am with a company making payments but due to just starting it my taxes will still get taken. Which I don’t really mind because it will be paid off. But would like to know how long till I see the rest of the money?
Robert Farrington says
Within 6 weeks… but if you only owe $1,000 – can you find a better way to pay it off without losing so much of your refund to fees and collection costs?
Alexandria Threats says
I currently have an offset from my student loans. I made my 5th payment yesterday and was told that after the 5th payment they would sent my papers to treasury and have the offset removed. Any idea how long it takes for this to be processed?
Robert Farrington says
45 to 60 days… Honestly, you’re risking it to file quickly. We recommend waiting until you’re complete.
yo momma's tired says
I received an offset this year, does that mean for sure they will garnish my wages? If so, how long typically until I see paperwork for that? I did not receive ppwk about the offset even though they say they sent it to me back in September. My loan went to collections recently.
Robert Farrington says
At some point, yes, they will. It can take months to years.
yo momma's tired says
My loans are upwards of $80k, sounds like I can only make a payment plan with the collection agency. I cannot afford that much per month, wondering if they typically base the plans on income or if a low payment works for them…kind of scared to call them and make contact. Not really sure what to do and I could afford a small payment but I definietly can’t afford a 15% garnishment. Is there some formula to this…?
Robert Farrington says
You want to do rehabilitation. It’s income-based. I’ve seen as low as $5 per month if you have low income. Check out this guide: Student Loan Rehabilitation.
yo momma's tired says
Couple questions…
Will they only consider my income or my husband as well? The loans are only in my name and I received them before we were married.
What’s the percentage they do on income based payments? Kind of just trying to be prepared with an idea of how much the payment will be.
Thanks for all your help.
Robert Farrington says
Depending on the repayment plan, they may use your combined AGI or just your AGI. Read this: married filing separately for IBR.
The payments are 10-15% of your discretionary income (it’s a calculation), and it could be as low as $0.
yo momma's tired says
So I read through “married filing separately for IBR.” and it seems like since we filed jointly for 2019 they will take our total income together. Am I correct? It also seems like if the income is over a certain amount I would not qualify for IBR, is that correct?
Assuming that is true, what are the income level guide lines or are they published somewhere for IBR? Is there a time frame where the ability to rehabilitate the loan goes away? If I wait until next year to rehabilitate, and file separately for 2020, will that allow me IBR? I am the spouse that makes more money in my scenario.
Robert Farrington says
If you filed jointly, they will always use your combined income for all repayment plans.
You need to start rehabilitation now, as it takes 9 months. Then you’ll get on an income-driven repayment plan.
Check this out to see the repayment plans and what you may qualify for. There’s always something to qualify for.
Joseph Angelo says
i defaulted in student loans about a decade ago, Last year was the first time in my adult life i filed taxes and roughly 4,000$ was offset. This year another 3,000$ is to be intercepted however i am currently homeless and as a 3 time felon unable to find employment. can i get any kind of deduction are credit back for the amount of interest that has occured?
Robert Farrington says
No. The solution is to get out of default today and get back on track with your loans so this doesn’t continue into the futuer.
Brianna Dieguez says
How do you go about getting the spouses portion back? My husband got a letter about his student loans and called them to set up a program sent all the paperwork never heard back from them and suddenly they’re taking our entire tax return to pay his student loan’s. But I want my portion of the tax return since they are not my student loans
Robert Farrington says
You want to file for injured spouse. See this: filing for injured spouse.
Whitney says
I created a repayment plan with the collection agency that works for the dept of education could they still take my refund? I have been making payments even though it was just created earlier this month (February 2020)
Robert Farrington says
Yes, they will take your refund until you’ve made satisfactory progress on your repayment plan agreement (which is 5 completed and reported payments).
Whitney says
I started my repayment plan through loan rehabilitation after I filed my taxes. I filed my taxes in the beginning of January and started the repayment plan beginning of February. Am I safe still since I did a repayment plan? If they take my income taxes, can I get them refunded?
Robert Farrington says
Started your repayment plan (such as IBR, PAYE, etc), or are still on rehabilitation plan?
If repayment plan (like IBR), you’re cutting it very close. It can still take about 30-60 days to process and clear everything, but you have hope.
If rehabilitation plan, no, you’re going to see the offset.
Dieanna says
HELP ! I checked my refund status today and it finally says approved . But it says that it’s going to be partially or completely taken because of TOP. So I go to calling around and I was told that my student loans are in default and that a debt collector has my account . When I called them they said they sent me papers to do a payment plant in the mail and I never got anything. Even the address they had on file was incorrect. They say they are taking my ENTIRE refund. My deposit date is supposed to be on the 26th . Is there ANYTHING I can do to get my money ?
Robert Farrington says
Not at this point. You can get out of default and save your refund for next year.
Jenny g says
My collection agency said they don’t have anything to do with offsets that I have to call the doe for that even though they are now in charge of the loan. Also I already recieved my state refund so is it possible that I will still get my federal one? I see people talking about certain dates for offsets being processed.
Jonte Jones says
If I am in loan rehad and made a couple payments can I file for tax offset bypass since I’m currently rehabilitating my loan.
Robert Farrington says
Technically once the 5th rehab payment clears, they will remove the offset. But that takes time… We recommend you wait until you’re done with rehabilitation before you file to be safe.
Shae says
Hi, I My student loans went into default Dec 19 I didn’t update my information so I was unaware however I did a Forbearance on 2/11 and was approved now it says my payments are $0. However I filed my taxes on 01/30 and now my refund status say it may be taken so I called the BFS and it says nothing is found under my name! I am kinda confuse will they still take my refund or am I in the clear?
Robert Farrington says
It’s going to be close, so please let us know what happens.
Richard says
I entered a rehabilitation program in October but just found out by checking my tax refund status that my tax return was taken. Why? I’m doing what I was told to do. Just a kick in the face. Y do I even try?
Robert Farrington says
You need to get out of default first. If you would have waited to file another month or two, you would have been fine.
Now, complete rehabilitation, get back on track, and you’ll never have to deal with this again.
Cici says
Hi I completed the rehabilitation program made 9 monthly payments but the loans still say in default on the dept of education’s site, do you think it’s a good ideas to file my taxes?
Robert Farrington says
I would wait until you’re on your normal repayment program and have made your first payment. While getting your refund is really helpful, you don’t want to lose it due to slow paperwork processing.
lori C says
I was expecting a nice refund, my accountant text me today saying that they held my refund due to student loans. on my credit report they show charged-off ( i filed bankruptcy in Dec 2018.) but when i called the dept of education the automated service said my loans were in default and gave me the name and number of the collection agency. when i called the collection agency all they wanted was money and stated they were contracted by the dept of education to get the loans right in 2014! They aren’t showing up on my credit but must be legit bc the IRS is holding my money because of them. I need help please
Robert Farrington says
There is no statute of limitations on Federal student loans. You need to find your loans and get them out of default. Your refund for this year is gone, but you can fix this for next year.
See these:
How to find your student loans
How to get out of student loan default
Tammy says
How do I make sure to get my taxes this year I am in default with student loans however they have been garnishing my paychecks for 3 months and I am in a repayment program with Dept of Edu I will be out of default on April 15 th and they said they send notification to the irs at that time that I am no longer in default can I file an extension to file my taxes after the irs receives the letter that I am no longer in Default and get my taxes back
Robert Farrington says
Complete the rehabilitation program, then file. If you’re owed a refund, you can file your return anytime within 3 years to claim your refund.
Jenny garner says
If I recieved my state refund is it possible that I will still get my federal refund also even though I’m in default on my student loans?
Robert Farrington says
Not likely. They run on different systems, and if you’re in default on Federal debt, the government always collects.
Anthony J says
I just set up a payment plan and I haven’t filed my taxes yet. How long will I have to wait to file my taxes and not have any of it garnished from student loans?
Robert Farrington says
Read the article! We recommend completing your rehabilitation program before filing your taxes.
Jess says
My tax refund was taken due to default on student loans. I have been on the rehabilitation program since October 2019. February was my 5th consecutive payment. After getting the offset letter I contacted the department of education. They told me today that I was taken off the list for my refund to be taken on February 21 and that my tax refund money was available on February 20 (I filed the first week of feb I think), so yes ONE DAY difference. Everyone I talked to up until today said I would get it back and then the 2 people I talked to today said since there was a day difference I could not get it refunded unless I was eligible for a hardship which I’m not. Is there anything I can do? I’m desperate, I had been counting on that money to pay off a credit card debt in my name which wasn’t mine (long story). Feeling very defeated, finally was able to start paying off my student loans (finally got a job) and now the little bit of money I was so happy to get back to better my credit this happens.
Raneisha says
I am getting money taken out my check and was also told irs would only take 15 percent from my refund,but they took my whole refund how is that??
Robert Farrington says
That’s what happens when you’re in default. You need to get out of it to stop the madness – most of this money is going to collection costs and fees, not your loan!
JKT says
I lost my refund this year for the first time. I am still able to do a payment program and get my refunds in the future, or am I stuck losing my refunds for the rest of my already broke life?
Robert Farrington says
You need to get out of default, and then this won’t happen again. Start the process now as it takes 9 months to rehabilitate your student loans.
Kristen says
I am in my 4th month of 5 monthly payments to get my garnishment stopped. I was verbally told by DOE that they have a garnishment until 4/12/2020 on my file. But when I call TOP it says there aren’t any offsets on file for my SSN. Will they take my refund?
Robert Farrington says
Yes, they will likely take your refund. Get out of default before filing – or end up like the sad stories you can read in the comments on this article.
ChubbyDubbs says
Just made my 5th payment today…haven’t filed yet…nervously waiting
Justamom says
Please let me know what happens. My hubby made his 5th one yesterday and I made mine today. I am on the phone currently with the loan holder of my account and the wait time is about an hour. I can wait to file as long as I get my refund but what happens if we are waiting past tax day? That is what makes me nervous!
Robert Farrington says
If you’re getting a tax refund, you have 3 years to claim your refund. You can go past April 15.
Theresa says
I understand the need to pay govt loans, even with tax return money. Being unemployed, I fell into default with my student loans. My husband and I had our tax refund sent to the EDU. What I want to know is: How long before the EDU gets and reports to the Collection agency I’m working with on paying off my loans? It’s been two weeks since the IRS website informed us our tax refund was going to EDU.
Robert Farrington says
Very little of your refund will likely go to your loans – it will go to accrued interest and collection fees. When this happens, most people don’t see their loan balance decline.
Theresa says
The total on my EDU paperwork says just over $6000 including interest, Over $3000 went to EDU, I understand fees will be applied, but 2/3 of the refund sounds a bit steep. Is there any way to find out the breakdown? I almost feel like sending the money directly to EDU instead of the collection agency,
Robert Farrington says
You need to get out of default – that’s standard. Once you get out of default and back on a repayment plan, all your payment will go to interest and principal (no more fees).
Theresa says
I just started a repayment plan 2 months ago and I understand the paying the $1000+ interest, but $2000 sounds like a lot of fees for anything, even school loans,
Robert Farrington says
It is a lot… that’s why it’s really terrible to go into default and have this happen.
Eric says
I never received a letter from the IRS in 2018. My tax refund was taken and after weeks of waiting I found out on the where’s my refund page. I still haven’t received a letter for 2019, and I’m worried it’s going to happen again. Who do I contact? IRS? Dept of Ed? Are they required to notify me? My address has not changed in 3 years.
Robert Farrington says
Your loan servicer or debt collection agency will notify you. You need to contact them and get out of default.
Chances are, they have an address on your loans from when you went to college. If you haven’t updated your loan contact info, that’s why you didn’t get the letter (or monthly statements, late notices, delinquency notices).
Start here: How To Find Your Old Student Loans.
Anthony says
I had my refund taken because i was in defualt this year . the amount they took cleared my student loan debt. But i read today that Trump is stopping collections of student loans due to the coronavirus epidemic. can i possibly get my refund back from the agency during these hard times due to the virus? or will they not refund me despite of the new rule the president passed?
Robert Farrington says
As of today, we haven’t seen anything official about stopping tax offsets. Not to say they won’t, but nothing official has rolled out yet.
Second, if they do roll it out, it’s highly unlikely it will change past offsets.
Finally, we see this every year – are you 100% sure your loan is paid in full? 99% of the time, even though the offset appeared to be enough to pay it off, you might have a few dollars of accrued interest or a fee that keeps your loan alive. Then, it grows significantly, and you find yourself in the same problem next year. I would strongly suggest you find your loans and check every month to make sure they show up on your credit report as paid in full.
Anthony says
Im actually not 100 % sure , I checked my credit report but do i have to wait a month to see changes to my report although the offset happened last week ? also i see on my credit report a balance of 180 dollars for CBE FORMER GrOUP.. is this related to my student loan or something else entirely?
Anthony says
Im in New York and it says New York Attorney General Letitia James’ office will suspend collecting money owed to the state in a 165,000 lawsuits and settlement cases where people owe funds to state hospitals, veterinary facilities or SUNY schools, her office announced in a joint statement with Gov. Andrew Cuomo.
I had my federal refund taken due to offset.. can i get it back now ?
Robert Farrington says
No, this isn’t an option right now. Many people are advocating for it, but so far, it’s not looking like it’s going to happen.
Anthony says
Hey this Anthony again. On my credit report under student loans it says $0 reported balance but when i click the tab and drop down menu it shows 4 accounts “closed” 2 of them from MOHELA says paid in full but the other 2 by the US DEPT OF ED shows a reported balance even though it says this account was closed on march 2018. ?? any insight would be appreciated.
Robert Farrington says
If you only had the two loans, chances are they were moved from Mohela to the Department of Education for collections. You should still monitor it.
Ashley says
Hi, Thank you for this content, very informative. Last year my student loans went into default. I had been receiving letters from a debt collection agency and eventually enrolled in their rehabilitation program, but I am only one month into it. I thought that was enough to stop the IRS from taking my return. Today I received two letters saying that the IRS is taking our return. They had not sent me any letters prior to this to give any warning. Is there any way I can reverse this? I intend to file the form to at least get my husbands portion back. I have no idea if we will even get our state refund, we live in NY.
Robert Farrington says
Sadly, there isn’t a way to reverse it. You need to clear five payments at least (see above in the article), but we recommend you complete it 100% before filing.
You can get your husband’s portion back by filing the injured spouse relief form.
Ashley says
Update: I called the IRS and the woman I spoke with said that my refund had not yet been posted to my student loans account, but because of the current situation with the pandemic, once it posts, it would be returned to me. She could not offer any time frame…but typically it takes 10-20 days to post to the account and once that happens it would be reversed.
Lorie says
Have you heard anymore information regarding your situation? I’m in the same situation as you and I wanted to know how long does the entire process take. Thank you!
Debby Uehlein says
My tax refund was just taken and I have no idea why. I did not receive any letter from the IRS or the US Dept of Edu. I am paying on my student loans every month, what they said I need to pay due to my income, I have not missed a payment and am in good standing, so, who took my tax refund of $1100.00. I really needed that money to get caught up on utilities and other bills, now I have nothing. The IRS said they would send a letter in the mail within 10 days as to why I am not getting my refund. How can I stop this from happening again if it is the edu dept taking my tax return? Especially since I am paying them faithfully every month?
Robert Farrington says
You should check your credit report and make sure you don’t have identity theft issues or are missing a loan.
Paul C. says
The stimulus package is very confusing. I am in default but in month 4 of the rehab process. When I call the IRS they are still saying there is an offset but the DofE says that the offsets are being suspended till the Corona crisis is over. I’m being garnished and my wages are being cut by the company I work for. I’m really confused if I’m still being offset or not. Any help you can offer would be helpful.
Robert Farrington says
You should not be offset if you file now (after March 13).
Tammy says
I just filed on March 25,2020. Since the department of ED has stopped taking defaulted student loans from IRS.will I receive my tax refund?
Robert Farrington says
Yes, you should receive it.
Tammy says
The IRS won’t keep for my offset and have the dept of Ed send it to me?
Kristy says
I just had a question about the new bill that has passed due to the virus outbreak and the stopping of withholding people’s tax return for student loans, the date associated with that being passed is March 13th and I filed my husband’s taxes on that exact date. It would appear, according to the page on the IRS website where you can check your return status, that his entire refund has been withheld due to an old student loan he had from many years ago. I know that they are going to be issuing refunds for people whose refunds were taken after that date but what about ours that was filed on that exact date? Will that automatically be refunded or is there someone I need to contact. I cannot file for the injured spouse thing because I do not work myself, I’m home with our children so we do not file a joint return, I’m basically listed on his just as a dependent since I don’t have income myself. So I didn’t know if I should contact someone about this since the date that the taxes were filed is right on that date that they passed this bill and stopped all the seizing of refunds, but it would appear that ours was taken anyway. Thanks for any help you can give me. My husband is also laid off work right now due to this virus so anything is helpful right now.
Robert Farrington says
The offset will be ignored (likely), or refunded. If you filed on March 13, you shouldn’t even expect anything until mid-April.
Kristy says
Thanks for your reply, the expected return date it gave me was April 3rd, however the IRS has a webpage where you can check refund status and as of yesterday it said that all of it had been taken for the offset and had an adjusted refund amount of zero and I didn’t know if they were counting the 13th with the refunds they’re doing or only those filed after that date. Do you happen to know if that will be done as an automatic thing with the direct deposit information I gave when I filed the tax return or is there a number I need to contact?
Lorie says
Have you heard anymore information regarding your situation? I’m in the same situation as you and I wanted to know how long does the entire process take. Thank you!
Kristy says
I haven’t as of yet other than what Mr. Farrington has answered on here but if I do I will definitely post what I learn or if I receive anything back sooner.
Robert Farrington says
It should reverse and refund you within 2-4 weeks.
Steve says
I was in default, filed my taxes in February and my federal refund was seized. In these cases where we filed before March 13, are any of these seizures going to be refunded or we’re probably just SOL? One time it would of been better to wait on filing taxes I would assume. Can’t find any information about these certain cases. Thanks in advance.
Robert Farrington says
Sadly, it likely won’t be refunded.
Sarah says
I filed February 2nd, my refund was offset on February 26th, the payment wasn’t actually received by the DOE until March 10th. I’ve called and spoke with an agent. I’m eligible for a reversal (check).
Shaneka Whitney says
I need to verify if I’m eligible to recieve my refund from the offset. Who do I need to call?
Robert Farrington says
If the offset occured after March 13 for your student loans, it should happen automatically within the next 2-4 weeks. If prior to that, there are no refunds being issued.
Lola says
Hi
My loans are currently in default. I was told by 2 different answers, from the DOE regarding my tax refund being garnished. One person said, my refund WILL be my refund garnished due to my loans being in the default status. However, another person from the DOE, stated, different. They said I WOULD NOT have my refund garnished and that I WOULD receive my REFUND. Could someone please clarify, will I receive my much needed refund??
My loans are not with a private company, as I understand private student loans do not meet the qualification.
Robert Farrington says
If you filed your taxes after March 13, you are safe from an offset/garnishment.
Shelly E. says
Will we receive are refund directly from the IRS, or will it go to the DOE first and they will send it to us? If it does go to the DOE, how long will it be before we see a refund?
Robert Farrington says
No, there will be no offsets for at least 6 months. The IRS will send your payment directly however you selected to receive it on your tax return.
Sean says
Hi Robert. Thank you for responding to everyone’s questions here. My question is where did you get the six month figure? What I read was that seizures will be stopped for 60 days counting from March 13th. Is that incorrect?
Robert Farrington says
That was correct as of two weeks ago, and then last week with the CARES act passing, it was extended until September 30, 2020.
Sean says
Thank goodness. I’ve been stressing out over mailing in my 2018 1040 (with my $4800 refund) unsure that if I didn’t get it in approved and distributed quickly enough, I’d miss that 60 day deadline and the money would be seized. Thanks again!
Harmony S Tolle says
My wmr just updated with topic 203 says it is being taken. I have defaulted student loans. I filed 3/25 will I get my refund? What will happen now? I was counting on this?!
Robert Farrington says
Yes, you will get your tax refund. Offsets for student loan debt have ceased and if it is garnished, you’ll get a refund. Learn more here: COVID-19 student loan help programs.
Kristy says
Hi again, I was just wondering if anyone in the situation like mine where the return was taken but is supposed to be refunded due to the new acts in affect because of the virus outbreak has actually seen that money being refunded yet? I have not gotten mine still and have searched and searched but cannot seem to find any information on when the department of education intends to begin issuing those refunds to people. Has anyone seen their money back or seen any additional information on this as of yet?
Robert Farrington says
If your refund was taken after the emergent was declared, you should get a refund within 2-4 weeks. However, prior to that, you won’t receive a refund.
Please keep us posted!
Valerye Mann says
I had almost my entire tax refund taken for student loans, leaving me with a balance of $35 due. I spoke with the collection agency today and the girl told me I was within the dates to receive a refund. With that being said, when will refunds from offsets be issued?
Robert Farrington says
If it was after the emergency was declared, yes. But it will take 2-4 weeks likely. Second, you’re so close to eliminating the debt. Strongly consider, between your refund, stimulus check, and anything else you have, paying this off so you don’t have collection costs anymore. Realize at least 30% of everything they are taking goes to costs and fees!
Valerye Mann says
I already discussed with the collection agency if they would just keep half to apply toward my debt. They said the dept of edu will return the entire thing to me but that I can pay on it, which is my plan, to pay back @ a third of it. I’m looking forward to paying my loans off and going back to finish school….FINALLY!!!!
Tabbie says
Since 2017 they have been taking my tax refund from me for my student loans. I already filled my taxes this year at the end of March. I know Trump said something of suspending student loan debt. Will I still get my tax refund this year or are they take it from me again this year. How can find out how much exactly I owe in student loan debt? Please help me understand.
Robert Farrington says
No, they have since suspended offsets for 6 months. So you will get your refund this year.
Now’s the time to get out of default. Start here: finding your student loans.
Tabbie says
The refund page says to look at tax topic 152. I’m assuming it’s for my student loan debt???
Robert Farrington says
Tax Topic 152 means your return is in process and you should expect a refund barring nothing else…
See this: Common IRS Questions.
Marco Daniels says
I filed my taxes in February got an notification saying my return was all applied to my student loans. I filled out an hardship offset in March also due to COVID19 I heard that all offsets will be refunded except for child support. I just still haven’t heard anything do anyone know how long this could take?
Robert Farrington says
When was your refund taken? If it was after the emergency was declared, you’ll receive a refund for it in 2-4 weeks.
Joe Morrell says
On WMR, It says my “refund has been approved for direct deposit. However, it may be partially or completely reduced to pay a past due obligation, such as child support, another federal agency debt, or state income tax. If so, the Bureau of the Fiscal Service (BFS), who issues IRS refunds, will send you a notice with the amount of the debt and contact information. The details of the debt are not provided to the IRS. This application will be updated with the refund amount remaining, if any, after the debt is deducted. If your refund is not credited to your account by April 20, 2020, please revisit this site or visit IRS.gov/Refunds, for your revised refund status. Updates to refund status are made no more than once a day.”
Then it links to Tax Topic 203, Refund Offsets for unpaid child support and certain federal, state, and unemployment compensation debts.
I know I do not owe any child support. I called TOP and it only lists my student loans as a debt. Is this just the IRS system not being updated to reflect the temporary suspension of offsets? Thanks for your time.
Robert Farrington says
Student loan offsets should be suspended, but we’ve heard your story several times. You’ll likely have to wait for it to be refunded manually.
Tracy says
Joe, I have the same message as you but mine says if not credited by the 27th please revisit the site. Did you end up getting yours yet or does it look like it went to the DOE?
KSHERI says
My refund was intercepted March 2, 2020 due to student loan offset . With the changes happening due to coronavirus, will my tax return be refunded to me??
Robert Farrington says
Sadly, probably not. That was before the emergency declaration.
However, with all the current programs and pause on student loans, now’s a great time to get out of default to stop this from happening in the future.
Emily says
Robert,
Does this offset apply if filing a 2019 and 2018 tax return? Loans are in rehabilitation program but only in 5th month so still considered in default I’m sure. I did receive the 2019 refund but am now wondering about if I will also be receiving the refund for 2018? It was filed by paper and mailed after the March date necessary to be eligible. Thank you so much for taking the time to answer my question.
Robert Farrington says
It does apply to anything right now, but the IRS isn’t processing paper tax returns. Probably won’t until the summer. So the concern really becomes – will they actually process your return before the end date?
Emily says
Thank you for answering my question. I have another if that’s okay. Previous year returns are solely filed by paper, correct? Thank you.
Robert Farrington says
Prior year returns can be efiled by a registered tax preparer.
Fernando says
Do to the Coronavirus I got my Federal Tax refunded back to me and not taken by the Department of Education. Is the State Tax Return also refunded or only the Federal Tax Return?
Robert Farrington says
Each state sets their own rules for that. About half the states have waived it. You need to check with your state’s tax office.
Elizabeth says
How long was the process? I efiled march 21with direct deposit info, got a letter april 9 from DOE saying they wouldn’t be taking it but it’s now may 11 and still being processed and of course no stimulus check either
Arthur cross says
On March 25,2020. My refund was offset. I graduated college in 99. I thought my student loans where complete. But I guess not. With that being said I want to do what’s right and pay them. So I consolidated. And will pay them. But i have seen that my tax refund is supposed to be refunded to me due to the covid crisis. My balance total of my student loan has reflected the refund being returned to me. But I am yet to receive my check. I have called Navient and they have said i am getting my money returned to me. But I still am not seeing anything. Any idea how long the process for them to send the check may be? They sure are quick to take it. But slow on the return. The funny part is I got the notification of the pending offset from the bureau of fiscal. 2 weeks after they took the money. I appreciate any and all advise
Robert Farrington says
People are saying the offset refund takes about 6 weeks – so expect May.
Ryan says
After having their tax refund taken due to defaulted student loans, Has Anyone received their refund from the department of education due to covid19?
Robert Farrington says
Yes! We’re starting to see people report they are getting the refunds. The IRS said it would take 6 to 8 weeks – and remember it’s only for offsets after March 13. That 8-week mark is right about now.
Emily Maurer says
Does this apply to any refund associated with a tax return of the past 3 years? (2017, 2018 or 2019?) Or will it only apply to a return filed for 2019 tax year?
Robert Farrington says
What do you mean? Are you talking about the specific COVID-19 related option to get your offset refunded to you?
Emily says
Yes. I called the US Dept of Education and they did not have an answer. 2018 taxes were just filed online a few weeks ago. Do you know if the refund will be offset to Dept of Education or kicked back and eventually sent to last known address of filer?
Robert Farrington says
It should apply to any offset processed during this period (regardless of tax year). The refund would likely be sent back to the address on the tax return.
Emily says
Thank you for your help and time! Be well and God bless.
Hadi says
My wife has defaulted her student loan and every time we file taxes they take the refund which is fine. I filed our taxes mid-June and this morning woke up to a refund in my bank account (07/02/2020).
I just wanted to know if they will take this money back from my account after the emergency is over or not? I worry if I spend it now they will take it back from my account without any notice.
Robert Farrington says
No, read this: Covid-19 student loan offsets.
With that being said, you need to get out of default right now. Every time they garnish you, the money is going to collection costs and interest – barely anything goes to the loans, and your loans grow for a year before the next offset. It’s a terrible cycle that is costing you potentially thousands of dollars every year.