Student loans; the worst thing to happen to the world since, well, kind of ever. They’re necessary for some, but they’re still evil. The problem is that so many students take out loans without knowing really what it means other than it’s money to pay for school now that doesn’t have to be repaid until later. They don’t understand the concept of how much they owe at a later date. They have no idea how much money they’re taking, spending and how that will affect them later on. The vast majority of people graduate with loans, and many of them find themselves in default. When that happens, stress sets in even further and it seems as if life cannot get any worse.
You’re probably living paycheck to paycheck trying to pay back your loans, you’re behind on some of them and you have to figure out a way to get out of this crushing debt and this black hole. You have one thing to look forward to, though; your income tax refund. For once, you’ll be able to put some money away, pay off some debts and feel a little better. Except that refund never comes because the federal government took it to pay the money you owe them for your student loans. Now what? Well, there might be something you can do. This is called a federal offset.
For one, you can appeal the offset by sending a letter in writing to the holder of your student loan. These appeals are typically considered if your loan meets the following criteria:
- The loan is not really in default
- You’ve made satisfactory payment arrangements
- Your loan is already paid in full
- The borrower has passed away
- The loan is not yours
There will be an appeal, the IRS will request information and you will be provided with instructions as to how you should proceed. Additionally, you can file a form called an IRS form 8379, an injured spouse form. This is a form that can be used by your spouse if he or she is not responsible for your defaulted loans and would like to be refunded his or her portion of your refund. You can fill this form out and send it in with your 2015 income tax return or you can mail it after the fact to see if your spouse is eligible to receive a portion of the refund.
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