Was Your Tax Refund Seized for Student Loan Default? Follow These 3 Steps

Posted August 29, 2020 by in Lifestyle
tax statement

If you were expecting a tax refund from the federal government, you make shocked to have found out that your federal student loan has defaulted and your money has gone there instead, rather than into your bank account. This is a process that has been carried out by the Treasury Offset Program who are basically in charge of collecting money that is owed to state and federal agencies.

If this is what has happened to you, you may be eager to find out how you can appeal this action and what you can do to get your tax return back into your pocket. 

Step One

Understand the basics. The Treasury Offset Program can default all kinds of loans, including tax refunds, social security benefits and even farming allowances and benefits. In this case, if your student loan has been defaulted, it means that your loan is now 270 days or more past the due date, making it liable to be offset.

If you’ve just received a letter or notification about the offset, this means it’s due to begin in the next 65 days. Notices are usually sent once, but be warned, if you haven’t updated your personal information, it may have been sent to your last known address.

Step Two

Contact your student loan holder. If you’re looking to appeal your offset, this is the next key step you’ll make. You are within your rights to see the administrative review of your loan and can rehabilitate your loan. You may also want to make a compromise agreement, which means you can pay less than half your debt if you feel you’re unable to pay it.

There are some reasons you can appeal an offset, such as being eligible for closed-school disclosure, forgery for some kind has taken place, or because of the details outlined in your repayment agreement with the loan holder. If you can demonstrate hardship in your finances as well, you may be able to default the offset on a one-off basis that can get your tax return returned to you.

Step Three

Use a professional legal service. It may be difficult to understand the ins and outs of this financial process, especially if you have no idea what’s going on or what any of the terminologies means, but if you need your tax return back, then it’s time to get professional legal help. Simply look for the top tax attornies in your area to see what they can do for you.

A tax attorney will help you look into your financial situation to see if you can declare hardship, and will help you explore what other options are available to you. You never know what your individual situation could bring up, so it’s always worth looking into it.


As you can see, the process for getting your tax return back is not so much difficult, but there are few leeway options which means you’ll be able to get it back. Ideally, take action as soon as you’re aware the offset is happening and you’ll be able start the process to get your money back.