Summary
Student loan borrowers might face issues with their tax refunds being taken if they are behind on loan payments. Organizations are warning borrowers to check their loan status because tax refunds, including credits, might be used to pay off student loan debt if they are in default. The government paused these actions until April 2025, but now borrowers should prepare for possible refund seizures.
Key Facts
- If borrowers are behind on student loan payments, their tax refunds could be taken to repay the debt.
- The Education Department must notify borrowers at least 65 days before taking their tax refund.
- The Treasury Offset Program can take tax refunds, paychecks, and even Social Security benefits for unpaid loans.
- Child Tax Credits and Earned Income Tax Credits might also be used to pay loans if borrowers are in default.
- The warning encourages borrowers to check their loan status before filing taxes.
- Borrowers in default can contact the Treasury Offset Program to confirm if they are at risk.
- Options like loan consolidation or discharge programs might help borrowers avoid tax refund seizure.
