President Trump has declared an State of Emergency to combat the coronavirus pandemic in the United States. For borrowers with student loans, this can be a challenging time. It will only get worse if there is a nationwide quarantine or even a lock-down.
With all of the shutdowns and closures, having a stable income to pay your student loans can be a challenge. Plus, there is a lot of misinformation about what is and isn't applicable for student loan borrowers.
Let's break down what the Emergency Declaration and what it means for your student loans, as well as what will happen if we move to a full quarantine or a government lock-down.
Plus, on March 27, Congress also passed the CARES Act (i.e. the stimulus bill) which provides for more relief for student loan borrowers.
You can also read the Department of Education's press release here.
Note: Congress is currently debtating more stimulus, but it appears that there won't be any more student loan assistance. Please plan to resume payments on your loans in October.
Student Loan Payments
The stimulus bill that just passed requires the Department of Education to pause student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This is automatic - borrowers do not have to request it.
That's a huge benefit for student loan borrowers. No payments for roughly 6 months!
Note: Interest will not capitalize during this time as well.
If you're setup for auto-debit, the ACH payment will be turned off on April 10. If you have a payment due before then, you need to manually stop it. Also, if you've already had a payment go through and you need the money, you can call your loan servicer and ask for a refund of that payment.
Another benefit is that if you're on-track for Public Service Loan Forgiveness, these 6 months of deferred payments do count for PSLF! That's awesome.
It's important to note that this only applies to borrowers with loans held by the Department of Education. This includes all Direct Loans, and Federally-held Perkins loans and FFEL Loans. The easiest way to tell if you have Federally-held Perkins or FFEL loans is to simply login into your loan servicer's website - you'll see your loan payment $0 and interest rate 0% if they are approved loans for this.
Non-Federally Held Perkins Loans
If you have a non-Federally held Perkins Loan, your loan servicer is allowed to grant you a three month forbearance if you cannot pay due to a COVID-19 related issue. You can ask for this simply by calling.
Beyond three months, you will need to submit documentation related to your forbearance.
This time will count towards your three year forbearance limit. Interest will also accrue during this forbearance.
Non-Federally Held FFEL Loans
An update on April 4, 2020 allows non-Federal FFEL holders the *option* to follow Federal guidance on suspending payments. However, as of this writing, we don't know of any FFEL loan servicers that are offering this.
Help For Delinquent Borrowers
The Department of Education also announced an automatic suspension of payments for any borrower more than 31 days delinquent as of March 13, 2020, or who becomes more than 31 days delinquent, essentially giving borrowers a safety net during the national emergency.
If you're in default, now's the best time to get out of student loan default.
Stopping Collections and Tax Offsets
The Department of Education announced on March 25 that they will be suspending collection activity on student loans - including garnishments, tax offsets, Social Security offsets, and collection activity like phone calls.
If your tax refund happened after the emergency declaration, you will get a refund. If your garnishment happened before the emergency declaration on March 13, it doesn't appear you'll get a refund.
The suspension of collection activities will last until September 30, 2020 right now.
See this press release.
Non-Federally Held Perkins Loans
On April 4, the Department of Education told Perkins loan collection agencies to cease collection activity until September 30, 2020. This bring the policy in-line with Federally-held loans.
Non-Federally Held FFEL Loans
On April 4, the Department of Education told FFEL loan collection agencies to cease collection activity until September 30, 2020. This bring the policy in-line with Federally-held loans.
Income-Driven Plan Recertification
Another benefit that is happening right now is that if you had an income-driven plan certification due anytime between March 13 and September 30, your deadline for recertification will automatically be extended by 6 months.
However, you should strongly consider making a choice before the "pause" ends on September 30 if you're not already on an income-driven repayment plan.
Options If You've Lost Income Due To Coronavirus And Closures or Quarantine and Lock-Down
However, there are options for help with your monthly student loan payments if you've lost income or lost your job due to the coronavirus and related closures due to a potential government quarantine and lock-down.
Right now, payments are paused for 6 months, but that 6 months will end and you'll need to make a plan.
1. Get On An Income-Driven Repayment Plan
The first (and likely best) approach is to get on an income-driven repayment plan before the end of the 6 month deferment period.
The reason that this is the best approach is simple. If your income is low or $0, your monthly payment under these plans will also be $0 per month. Since your monthly repayment is tied to your income, this can give you the flexibility to not be burdened by student loan payments while you deal with your income loss.
It's important that you certify your income based on the "alternative" method, and you would send in a letter that says you lost your job, and currently have no income, or only unemployment income.
You can apply for an income-driven repayment plan by calling your lender or going online to StudentAid.gov.
Who Should Use This Approach: Most borrowers, especially those who are going for Public Service Loan Forgiveness.
2. Unemployment Deferment
A lesser option, but still viable - especially with the waiver of interest - is to ask for an unemployment deferment. You can get an unemployment deferment for up to 36 months, but you must re-certify your unemployment status every six months.
This can be helpful if you're still unemployed at the end of the 6 month period of deferred payments.
You also have responsibilities under this deferment. You must be diligently seeking but unable to find full-time employment in any field or at any salary or responsibility level even if you are not eligible for unemployment benefits (or if your eligibility expired). You must also be registered with a public or private employment agency if there is one within 50 miles of your permanent or temporary address.
Finally, if you are requesting an extension of your current unemployment deferment, and you are not providing documentation of your eligibility for unemployment benefits, you must certify that you have made at least 6 diligent attempts to find employment on the most recent 6 months.
It's important to note that interest will still accrue while your loans are in deferment, in general. But currently, student loan interest is waived for the duration of the Emergency Declaration.
When you combine the Wavier of Student Loan Interest (discussed below), this may be a good move, but it does have drawbacks. If you're going for Public Service Loan Forgiveness (PSLF), you must be making eligible payments. If you use this deferment, this period won't count towards PSLF. However, if you go on an income-driven repayment plan, even those $0 payments will count towards PSLF.
Who Should Use This Approach: Borrowers who need short term relief and aren't eligible for PSLF.
3. Forbearance
Finally, you can always request a forbearance. This should be a last resort, and doesn't make sense for most borrowers. However, it's the easy way to stop payments immediately.
There is some financial planning benefits that can be gained from a hardship forbearance right now, but use with extreme caution and special planning.
If you have federal loans, interest won't accrue during the State of Emergency. However, non-federally held loans will still accrue interest.
Waiver Of Student Loan Interest
As part of the Emergency Declaration, Trump waived student loan interest for the duration of the proclamation. As of today, the waiver will last until September 30, 2020. That's okay relief for borrowers, but nothing amazing. It's also confusing.
Here's why it's confusing. The waiver applies as follows:
- Loans owned by the federal government
- For the duration of the declared emergency
Here's where it get's tricky. Loans owned by the federal government is vague for most borrowers - and many don't know who owns their loans. The following loans are owned by the federal government:
- All Direct Student Loans (basically all loans issued since 2010)
- Some Perkins Loans
- Some FFEL Loans
The "some" Perkins Loans and FFEL Loans is challenging because in the Great Recession, the Department of Education purchased some loans back from private lenders. These loans that were purchased qualify, but most will not (since they are held by private banks).
So, how do you tell? You need to look on your StudentAid NSLDS File, or use this guide to Find Out Who Owns Your Student Loans. All lenders have updated their online portals at this point. If your loan is 0%, you have a Federal loan. If it doesn't say that, you don't have a Federal loan.
Finally, it may take your loan servicer about a week to process this request from the President. However, the Department of Education has said that it will be retroactive and take effect March 13, 2020, regardless of when they get it implemented in their systems.
Potential "Hacks" To Leverage This For Debt Pay-Off
This waiver of student loan payments does allow for some interesting financial planning aspects for paying off your debt faster. Since your student loan payment is waived, you can do the following:
Hacking The Debt Snowball
If you are running a debt snowball method to pay off your loans, you might consider throwing more at your larger loans in the short term, since you'll be able to make significantly more progress due to not having the interest on your payment. That could be a huge win for borrowers who are diligent about paying extra.
Hacking The Payment Freeze
The more interesting one is taking that extra cash you were using for the monthly payment to save, invest, or eliminate other debts.
It could be especially helpful to take that extra and pay it towards private loans, who (as of now) aren't offering many special benefits to borrowers.
This is risky, because this is also likely the start of a recession, higher job losses, and more. But this could be an. opportunity to beef up an emergency fund, eliminate credit card debt, or even invest to max out an IRA.
Private Student Loans
As of now, here are the private student loan lenders offering help:
Ascent: Ascent student loans is offering a Natural Disaster/Declared Emergency forbearance that allows you to postpone payments on your Ascent loans for up to 3 months in the event a natural disaster, local or national emergency, or military mobilization is declared by the appropriate governing agency. Simply call your loan servicer and ask for it.
Citizens Bank: For borrowers in repayment who are impacted by coronavirus they are offering a special three-month forbearance that will not count against their lifetime forbearance limits.
College Ave: College Ave may offer an extension of the grace period for up to an additional six months following separation from school, and up to 12 months of hardship forbearance over the life of the loan. When needed, forbearance is usually applied in 3- or 6-month increments, before re-evaluating with the borrower to determine on-going need. College Ave also offers deferments for members of the U.S. Armed Forces and National Guard who are called to active duty for more than 30 days, and natural disaster forbearance for customers affected by federal disasters, as determined by FEMA.
CommonBond: CommonBond offers up to 24 months of forbearance for student loan borrowers. They also offer a natural disaster forbearance that will last as long as the natural disaster.
Discover: Discover is the first private student loan lender that is offering borrowers the option to skip two months of payments interest-free. You must contact Discover Student Loans and ask for Discover’s Skip-A-Pay option, and you can defer your loan payments for up to two months - interest-free.
Earnest: Earnest offers borrowers the option to skip one payment every 12 months, with prior approval. Earnest also offers a forbearance option and a rate reduction program. The rate reduction program provides an interest rate reduction for 6-months, which lowers the payment.
ELFI: ELFI released the following statement: At ELFI, the safety and well-being of our customers and employees is what matters most. We're actively monitoring for the latest information on the Coronavirus (COVID-19) outbreak. Our online application process remains open and the ELFI Customer Care Center is open and serving our customers. If any new updates occur, we will post them to this page.
Navient: Navient is currently offering up to 3 months of suspending payments with no impact to the borrowers credit score if you qualify. You must call them and mention that the coronavirus has impacted your earnings.
PNC Bank: Borrowers impacted by coronavirus should call 1-888-762-2265. “We will continue to monitor the situation to determine potential extension or expansion of available assistance, and we will continue to communicate these decisions with you,” a statement on their website says.
Sallie Mae: A spokesman for Sallie Mae said that customers impacted by coronavirus should contact them at 1-800-472-5543 to discuss assistance options available. They are currently offering up to 3 months of suspending payments with no impact to the borrowers credit score if you qualify.
Wells Fargo: Wells Fargo offers various options if you are having trouble making payments – a loan modification program, which temporarily or permanently lowers payments, short-term payment relief for two months, or a forbearance. Call 1-800-658-3567 for more information.
Tax-Free Employer Student Loan Repayment Assistance
Another small provision of the CARES Act was to allow up to $5,250 in employer student loan repayment assistance to be tax-free in 2020.
We cover this in depth here: CARES Act Tax-Free Student Loan Repayment Assistance.
Issues For Borrowers Still In-School
One final unexpected issue has the potential to arise for borrowers who are still in school. Specifically, some schools may simply end the school year right now - in March or April.
If this happens, your "end date" gets reported to your student loan servicer, who then implements a 6-month grace period for your student loans.
This normally wouldn’t be an issue, as the grace period on student loans is six months, so assuming you enroll in the fall, you'd never enter repayment.
But, if you get a March out of school date, instead of your first payment being due in November, it could be due in September.
Something to think about and assess as the situation progresses.
Current Proposal: The HEROES Act
The HEROS Act passed the House of Representatives on Friday, May 15, 2020, and is now being debated in the Senate. It's not law yet (and likely will see a lot of revisions, but here are the current proposals for student loan forgiveness.
For qualifying borrowers, you can get:
- Up to $10,000 in Federal student loan forgiveness
- Up to $10,000 in private student loan forgiveness
Furthermore, for all other borrowers, the CARES Act provisions (listed above), would apply until September 2021 - an entire extra year. It would also officially extend to FFEL Loans and Perkins Loans.
To be a qualifying borrower for loan forgiveness, you must have met the following requirements as of March 12, 2020:
- Your student loan was delinquent or in default
- You were in a economic hardship deferment or forbearance
- You were on an income-driven repayment plan with a monthly payment of $0
So, while the forgivness aspect is very limited, the ability to have no interest and no payments for an entire extra year will still help many borrowers.
Final Thoughts
This information is evolving as the situation around the coronavirus, quarantines, and potential lock-downs changes. We will try to keep this page as updated as possible.
Keep in mind that your loan servicers are also working hard to keep updated, but system changes and information dissemination take time.
Feel free to ask a question below and we will do our best to answer or find the right answer.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.
Dee says
Will the stimulus check get offset or is that protected also
Robert Farrington says
As of now, they aren’t waiving offsets. But they are discussing it.
Evie says
Today I spoke department of Ed about owing $6 dollars lol and I wanted to pay it after they offset my return this year. So that my balance was zero. She told I was getting my offset returned and offered a payment plan. I was surprised had no idea.
Michelle MEDAS says
May I ask what date your taxes were offset?
DEe Nice says
I just talked to someone today and I’m getting mine back they mailing them out monday
Martin McGuire says
I read your article on April 6 and it was suggested that making payments if you can, because they will be applied to the principle of your loan. I now read a FAQ on the ED website which states that payments made during this time will apply to the interest accrued up to March 13. When that is payed off then it will apply to the principle. Is this true? If so, should I use the money to pay other expenses because the benefit is not as great?
Robert Farrington says
We’ve always maintained it’s probably not a good idea to make extra loan payments during this time. A better use of your student loan payments is to:
– Pay off any other debt you may have (such as credit cards, private loans, car notes)
– Build your emergency fund to 6-12 months
We don’t expect the economy to get better for most for 18 months, so the risk of jobless continues to rise, and so you should prepare. Use this five month buffer on loan payments to help you setup your finances to be in a better place.
Elaine says
I am wondering the same thing! My entire refund got offset in January–In my opinion, if this is a check to help us out, they should waive that offset!!
Robert Farrington says
There will be no offset on the stimulus check.
Debra Beckham says
My student loan went to off set now it’s in collection with Coast Professionals.. Will they take my stimulus check. They already tuck my refund.
Robert Farrington says
No, they will not take your stimulus check for your student loans.
Note: all collection activity since March 13 should have stopped. Now is the best time to get out of default and back on track with your loans.
Kim says
OMG me too by coast they took it all omg and I just had a baby and they took it March 6,2020 like a week before Trump said the emergency. Please let me know if u have more info and I will do same. Ty tty
Susan Smith says
Thank you for the information. I currently receive SSDI. And from that the DOE takes out a monthly repayment of a old student loan.
Can I have these postponed?
Robert Farrington says
As of now, offsets still apply.
Now is the best time to get your student loans out of default. Fix that right now so you stop losing money!
NHarvey says
I’ve been paying student loan but only in past year switched to a graduated payment cause I couldn’t afford it. Should I switch to an income repayment program now and will previous payments (not graduated) and IRP payments moving forward that count toward the 120 payments needed for public service forgiveness?
Robert Farrington says
Graduated plan payments don’t count for PSLF if that’s what you’re looking for.
All income-driven plan payments do count.
Shannon says
Are they going to take my unemployment due to student loan debt? Also, I filed taxes on Feb 3 and they took my whole federal return. How can I get that back because I decided to file early? My AGI is $8600. I’m very poor and need that money.
Robert Farrington says
All student loan collection activity (garnishments, etc) have ceased since March 13.
Since your tax return was taken prior to that date, you won’t get it back.
However, now that payments are also suspended, this is the best time to get out of student loan default! Take action to stop them from taking your money in the future.
Jennifer says
Same here! I guess being a procrastinator is a positive thing now? I am a single mother with two kids and I have no one to turn to. I cannot work because there is no daycare or schools open. I am going to lose everything we have because I will not get my refund.
Paris says
Call the DOE, if your refund posted to your account on or after March 5th, you will get a refund in the next 45-60 days. I’ve spoken to multiple reps there (just to make SURE SURE) Help is on the way.
Chris M says
What can borrowers do if their wages are already being garnished and taxes are being offset? I was told by the collection agency handling my account that there’s nothing I can do since my wages are already being garnished.
Robert Farrington says
What are you being garnished for? If for student loans, now’s a great time to fix it.
Christian says
Fix how?
Robert Farrington says
Get out of default and back on a repayment plan (which are all frozen, interest is frozen, so it’s a great time to do it). See this: Get out of student loan default.
Brad Morrison says
BFS TOP took my tax refund just today or yesterday. I filed my taxes March 31st and was hoping the offset would of been waived due to the pandemic. Im Also filing for total and permanent disability but i guess I didn’t do that in time.
Robert Farrington says
If it was for student loans, it will be refunded. Give it a few weeks.
Sade says
What do you mean fix it? What if you don’t have the full amount to pay? I am being garnish for my student loans and my hours have been cut. But I still have to pay the 15%
Robert Farrington says
Yes, get out of student loan default. Right now, no payments are required for 6 months! Garnishments are ceasing. There’s never been an easier time to get out of default and on an income driven repayment plan.
Jennifer says
I’m being garnished right now for student loans. Who would I call to get on the income driven repayment plan?
Robert Farrington says
You need to get out of default. See the process here: Rehabilitation For Your Student Loans.
Evelyn says
Will federal Parent Plus loans have interest waived?
Robert Farrington says
Yes, Direct Federal loans (including PLUS Loans) held by the government will have interest waived.
Sue says
How can I stop a student loan garnishment? I owe about $65000 for a 2 year associate degree from a junior college. Original loans about half that amount. I will die before this is paid. Any hope for me?
Robert Farrington says
See this: Get out of student loan default.
Quis M says
I have a defaulted loan. I had just made 2 payments before this pandemic occurred. I was wondering will i receive a stimulus check. I filed my 18 and 19 returns, but not my 20. And i should receive my 20 return.
Robert Farrington says
Yes you should. Offsets (garnishments) due to defaulted student loans are paused right now.
Elaine says
My entire tax refund from 2019 was offset to pay for my defaulted federal student loans. I’m currently on a rehabilitation program with the 3rd party debt collector (National Recovery) – started my payments in February. Am I to expect that if I get a stimulus check, it will be offset again?
Robert Farrington says
There will be no offset on the stimulus check.
Brittany says
What is the maximum amount of student loan debt a student can take out during their graduate/professional education?
Robert Farrington says
It depends on the loan type. Direct Loans – $138,500 for professional and graduate students. PLUS loans have no limit. Private loans have no limit.
Michelle says
Would there be a cap on the number of children for the $500 per child?
Also, I had a baby this year 2020 – therefore that child would not be reflected on my 2019 tax return, would I also get credit for that child in the stimulus plan?
Robert Farrington says
I’m sure you will, but uncertain of the path to do it at the moment.
Jordan says
My student loan is currently in deferment. If I were to make a payment while there is no interest on the loan, would this take my loan out of deferment and require me to start making monthly payments?
Robert Farrington says
No, and 100% will go to the principal.
Rob says
I already filed my 2019 tax return before March 13th and 100% of the refund was offset by the Dept. Of Education. Is there no way of getting the refund back now in the bill?
Robert Farrington says
The way it looks now, no sadly. If you do, in fact, get a refund, please report back and let us know.
Ashley says
My tax refund was took on march 13 2020 will I receive my income tax back from department of education
Robert Farrington says
You’re on the cutoff date, so you should. Let us know what happens!
Serenity Poynter says
Has anyone recieved there refunds back from edu?
Jennifer Dahl says
I got a letter dated March 16th that my tax refund was taken to cover student loan and I have yet to recieve my refund from them. Why is that?
Robert Farrington says
When did they actually take your refund? If it was before March 13, then it was before the law went into effect. You may have received the letter after they garnished your refund.
Carri says
I spoke with dept of Ed today and they said they are using the date of March 5,2020
Robert Farrington says
That’s great if they do, but conflicts with what they stated previously. Keep us posted!
Annette Austin says
Do I have to continue paying my student loan, since my money is short. If not please let me know who to call, my loan come out direct from my account.
Robert Farrington says
You call your loan servicer and ask for an “administrative forbearance”. Do it tomorrow.
Jessie says
My loans have been in default for years but I still haven’t completed my tax return, will I finally get my income tax refund this year or will it be offset due to old loans? I am currently on the loan rehabilitation program
Robert Farrington says
No, they have waived offsets for student loans until September 30, 2020.
Esotercia Phillips says
I am a teacher,I’m on a payment plan where I pay a little bit each payment time. Do they suppose to keep my check. I only been on this plan for 4 payment Is my money suppose to be kept.
Robert Farrington says
I’m assuming you’re concerned about an offset for a defaulted student loan you’re working on? If so, that won’t happen with your stimulus check.
Paris says
I spoke with the DOE this past week (a few times to make sure) and found out I WILL be getting my refund back in FULL in about 45-60 days. They are vague on the time frame because they just made the decision on Friday, March 20th by way of the press release. I was told any offset amounts posted to account on or after March 6th will be refunded. I was offset on my original direct deposit date of 2/26 which I explained to the rep but she stated since it didn’t post to my default account until March 8th, it will definitely be refunded. Just some info for those who are on here and encountered an offset for their entire refund. I am in shock and overwhelmed that I’ll be getting almost 8k back, money I worked hard for. Also, I am in the process of rehabilitating my loans and have already made 3 on time payments. So, I’ll definitely be OUT of default by next tax time, thank goodness. Good luck and stay safe:)
Sandy says
So you filed in February and yours was taken? Ours was too because my husband owes default loans….mine are in good standing on an IDR. But you have verified you will get your refund back???
Paris says
Sandy,
Yes, I have verified that I will be getting my full refund back due to the fact that it was posted to my default account on March 8th (must be posted to acct on or after 3/5/2020 – typo in previous post). The website for the doe where I make payments and see my debt summary shows the payment was on 2/26… However, you would have to call them to find out when it ACTUALLY posted to your acct, they’re the only ones with that info/date. Be prepared to wait on hold for a least 30-40 mins:)
orlando Reyna says
As of March 5th and after if your tax refund was offset due to student loans or anything else besides Child support you will get it returned only thing that i could not get confirmation on is when we will get the tax refund reversed back to us and this is confirmed through a phone call to DOE yesterday and just now.Thanks and godbless to all
Eboni says
I have a refund that was supposed to be in my account today. I got excepted on the 20th for my refund and it says to contact the U.S. Department of Education for information of my refund how long do it take for U.S. Department of Education to send out checks
Robert Farrington says
We don’t know how long it will take to reverse the offset, but we’re assuming it will be about 3-4 weeks.
Theresa Matheson says
Did you find out how long. Before they send it. I am supposed to get my refund on Monday and it still says it’s offset from us department.
Tamarra Romano says
My refund was offset mid February. Does anyone know where we can find information as to if those will be refunded?
Robert Farrington says
It will only be refunded if it was offset after March 13.
MB says
I have auto-pay set up for my loans – will these automatically pause or will I have to request they stop the payments? My due date is the 1st of each month, which means tomorrow, so I’m assuming my payment will still be deducted from my bank because the CARES Act will take more time to enact?
Robert Farrington says
They should automatically pause, but some of the loan servicers have acknowledged it is taking some time to update their systems.
Cynthia Guill says
I owe a 12,000.00 student loan in default, but I am disabled and draw SSI will I get a stimulus check??
Robert Farrington says
Yes, there is no income minimum. There are also no offsets for student loan default.
Given the programs going on for student loan debt, now’s the best time ever to get your loan out of default.
Carlos Dominguez says
I’m currently on default on student loans. I did my 2018 and 2019 tax returns on March 23, 2020. My neighbor who’s niece is a Congress woman. told her that I will be getting both returns because of the Bill that was passed by Senate and signed by President Trump. Is that pretty accurate information
Robert Farrington says
Yes, when we write “stopping tax offsets” that’s what it means. When you lose your tax return to a garnishment, it’s called a tax offset. Those are stopped right now for student loans.
Shante says
I file my income tax on march 27.would I still get that money due to the fact I owe students loan
Robert Farrington says
Yes, they won’t garnish your tax refund for student loans right now.
Verneta Haughton says
I have a garnishment on my wages and offset on my taxes for SSA…They still garnishing my wages at work as of April 2..I just file my taxes on April 3…Will my taxes be offset because on the offset line it say that SSA taking my taxes
Robert Farrington says
Garnishments and offsets due to your student loans are paused right now. However, other offsets may not be.
Tonya says
Hello, is there anyway at all to get my refund back after it was offset Feb 27? I don’t know when it posted to there acct ?
Robert Farrington says
Not likely.
Desiray says
The IRS took my tax return because I had student loans in default. Now I’m currently in a student loan forgiveness repayment plan. Will the stimulus check be taken for loan payments or will I get to keep it since I have been paying on it?
Robert Farrington says
Your stimulus check is not subject to garnishment due to your student loans.
Krista says
I filed my taxes March 30 for 2018 and 2019. I just received a letter saying they garnished my taxes due to my student loans. Will I not receive a stimulus check either.
Robert Farrington says
They should be issuing you a refund for your student loans since it happened after March 13. Contact them and follow up. You should also receive a stimulus check.
Dawn march says
I am not in default on my student loans. Will I still get my stimulus check or will it be taken from me to pay my student loans?
Robert Farrington says
If you’re not in default, why would they take your stimulus check?
Terrie says
I am waiting for my employer to stop pulling the garnishment from my pay but they have not done so and refuse to do so until they receive a letter from the Dept of Education. Is there a letter being sent out? If so, is there a date? I can’t seem to find any clear answers.
Robert Farrington says
Allegedly you’ll receive a refund, but it’s still wrong. I encourage you to submit your information here as they are fighting the Department of Ed on this: Student Borrower Protection Center.
Delilah M. Torres says
I filed taxes April 6th 2020 and my refund is due to be deposited by April 27th 2020 but it says it is be reduced or taken due to a student loan. My refund is only 1486. Will it be deposited or taken?
Robert Farrington says
Offsets for student loans are suspended. You shouldn’t see any money taken out. If you do, it will be refunded to you.
Tabetha says
I filled my taxes on March 29th I have asked this but can’t seem to find it anywhere on here. I filled the 29th as hoh because I claimed my brother and in got v a tax credit back. It’s still saying it’s processing it. My stimulus check got sent to my last year back account in no longer have because there still processing my return. I know v the check got sent back to the IRS so my questions is when will I get my stimulus check and why are they still processing my return of this year. They can’t take it for my student loans so what’s the hold up?? Please help me understand this. Thank you again for your patience.
Robert Farrington says
It’s barely been 21 days – you need to wait a little longer. With everything going on, returns are processing slower than normal.
Tabetha says
One more questions my stimulus check got sent back because I no longer have that account. They are mailing it to me now how long till they actually mail it out do you know???
Robert Farrington says
Likely not until the end of the month, into May sometime.
Vee says
I filed taxes in March and student loans offset my payment on March 9th for $1200. Conflicting reports saying they are crediting accounts starting from March 5th? Any accurate information?
Robert Farrington says
The law has been March 13 – like we wrote in the article. There are readers who’ve commented earlier, but we’d be surprised by that.
cristy says
Has anyone actually received their tax refund even though you were in student loan default? I’m in default and just filed my taxes on the 9th but it’s still showing being “processed”.
Robert Farrington says
Everyone we’ve seen that qualifies has, or they have confirmed they’re getting a refund (for those who were taken right after the announcement).
Veronica A Cornner says
@Christy, I was just just on the “hairy edge” of having had my refund taken just when the bill was passed. I believe it was offset on March 20 and the bill backdated to March 13th so I received my refund back. You are WELL within the bounds of the bill and will certainly receive your refund.
Cristy says
@veronica when did you actually file your taxes? And was it direct deposit or did they send you a check?
Rob says
I understand that my education loan forbearance during COVID-19 means I will not HAVE TO make payments through September 2020. But what comes due afterwards? Will the 6 months I have not paid my loan all become due at once or will the expectation to just be to “start” payments again?
Robert Farrington says
Afterwards, you just resume your normal payments at your normal timeline – so the next normal payment is basically due sometime in October. No “balloon payment” or back-payments required.
Veronica A Cornner says
Just wondering, can you actually get out of default if you were given the 2nd chance, but went back into default? I was told by DOE that I cannot unless I pay it off in full. Therefore until it is paid off, I will be subject to garnishments and tax refund offsets for the duration.
Are there no other options for “2 time offenders” even under certain Covid programs to get back in good standing?
Thank you.
Robert Farrington says
You can re-consolidate your loans. It doesn’t wipe the default from your credit, but it will get you out of default.
Veronica A Cornner says
Really?
I thought defaulted loans are almost impossible to get a lender to approve a loan!
Any suggestions of lenders to try for a consolidation?
Thank you for all of your help, you’re AWESOME!
Robert Farrington says
Consolidation is a free program offered by the Department of Education. You don’t consolidate with a lender – the Department of Education will assign you a loan servicer after you complete consolidation. You can start the process on StudentAid.gov.
Kristen says
Is the offset for student loans paused only for 2019 returns? I had to file 2017, 2018 and 2019 this year and all 3 are bringing refunds. Didn’t really plan this obviously, but now wondering if we will actually get all three refunds.
Robert Farrington says
You should, however, if any of these were paper returns – they won’t be processed until late summer or fall. As such, you do run a risk that the waiving of offsets ends before your returns are processed.