Can my tax refund be taken to pay my student loans?

by Francisco
(Long Beach California)

Do they have tha right to take my tax refund with out my authorization? Its bin more then six years since loan and always intercept my tax refunds i aready paid most of it pluss, i have not found job for two and half years.i was really depending on that money.

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Mar 05, 2011
Can my tax refund be taken to pay my student loans?

Yes, if you have a federally-guaranteed student loan and you have defaulted on the loan, which means that you have not made a certain number of loan payments in a row (How many depends on the type of loan.) -- your tax refund could be taken and so that the amount of the refund could be applied to your loan balance. This could continue until that balance is paid in full. It's also possible that once you are employed, the lender to whom you owe the money will get permission from the court to take a portion of your pay check each pay period. Meanwhile, until you've paid off everything that you owe, the amount of your debt will increase because of interest and penalties and your credit history will be badly damaged, which can have all sorts of consequences for your life.

My best advice to you is to contact your lender to find out if you qualify for any programs that apply to people in your situation. For example, you might qualify for a loan deferment, forbearance, or some other program. The important thing however, is to take action and explore your options. So don't delay! Get in touch with your student loan lender immediately.

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