[print-me]

What can happen if you default on a federal student loan?

You are “in default” on your federal student loan if you have not paid in 270 days (approximately nine months).  Your wages can be garnished or your tax refunds seized.

How do you stop seizure of your tax refunds?

student loan

Tax refund seized

You can request an offset refund, but there are limitations.  Here are a few examples:

  • You filed for bankruptcy and the case is still open, or the student loan was discharged in bankruptcy.
  • You repaid the loan.
  • The student loan is not yours – the Social Security number attached is incorrect.
  • You are in a repayment agreement with the Department of Education and have started making payments as required.
  • You are totally and permanently disabled.
  • The loan isn’t enforceable.

If you fit the bill, you’ll need to complete a student loan tax offset hardship refund form and provide proof of your hardship. You also can contact the Treasury Offset Program at 800-304-3107 for more information.

Share This Post:
Diane L. Drain

Attorney, consumer advocate and retired law professor

About Diane Drain:

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about Arizona bankruptcy and foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

I would be flattered if you connect with me on GOOGLE+ and ‘Like’ us on Facebook

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

What Others Are Reading:

Will Countrywide CFO be Sued by Dept of Justice?

Feds Announce Litigation Against Law firms for Deceptive Loan Modification Practices

Demystifying Current Real Estate Problems

Scam Arrest Warrants: Normally You Cannot Be Arrested for Not Paying Your Bills