Defaulted Student Loans

[Autum Shaw]

This seems to be a big topic with tons of questions every year. I previously worked in collections for defaulted student loans. Let me give you the run down on what to do so they do not take your entire tax return.

First- Call and check if you a certified for a treasury offset—Number is 800-304-3107

Second- Check who holds your loans and contact them. Either call the DOE or sign in to https://studentaid.gov– DO NOT AVOID THIS. THE DEPARTMENT OF EDUCATION CAN AND WILL TAKE YOUR TAXES!!!!!

Third- Get into the Rehabilitation Program–if you have not already completed it and re-defaulted. Your best option there would be to try and consolidate.

Fourth–DO NOT FILE YOUR TAXES until you have contacted the company and either completely enrolled into the program which means completing all of the required paperwork and making the applicable payments—DO IT RIGHT AWAY!!!—DO NOT DILLY DALLY–The department of education will de-certify you once you have made 4 voluntary on time payments.

Consolidation takes up to 90 days to complete, I do not recommend going that route unless you CANNOT do the rehabilitation program.

Lastly, make sure who you are talking to is actually contracted to collect on your loan. You can confirm this information right online. There are alot of companies that will charge you to do what you can do for free. GO DIRECTLY WHO IS CONTRACTED TO COLLECT ON YOUR LOAN. Also, do not avoid these just answer or make the call and get this done so you don’t have to worry about it next year. Make sure you follow what they say and complete the program. If you have any questions, I am more than happy to answer what I know. Since I no longer work for the company and can speak freely.

[Paris]

The following are 2 post I made on the college investor website but could not get a good answer, if you can help, let me know what you think, thanks:

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?

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

[Alx D]

@debra you should absolutely hold off. It will take 6 payments before the accounts come off default. If you file anytime before that they will take it. Happened to me a few years ago.

[Debra]

I called the number you provided last week and it said I had an offset. I found out what collection agency was given my loan. I contacted them and signed up for the rehabilitation program. I made a payment Monday and another one will come out of my account today (3 days later). Then the next one will come out February 15th. Should I hold off on filing my taxes until the very end so that I have time to make payments? I’m waiting on a packet from the collectors to show I’m in the rehabilitation program. Being a single mom of 3 I really can’t afford to not get these taxes.

[Autum]

you should be fine especially if its no longer in default

[tiffshie]

I completed the rehab started April made all payments on time but I had to call first before they put the paperwork in showing I was done. I checked Ed.gov n it showed no lien anymore. I filed with JH n got the refund loan. Clearly my refund is safe this year so I have no worries.

[Autum Shaw]

You should be good if you are out of default. Call the number I posted and see you have any offsets. But you should be clear

[Dee]

I enrolled in the rehabilitation program last February and I’ve been making payments on time. They transferred my loans to Great Lakes Last month and when I called DOE they said my loan is out of default now. Is my refund safe this year or should I wait?

[Author]

Replies