Yikes! My Tax Refund Was Kidnapped by an Outstanding Student Loan

What's Hot

23 Upgrades Under $50 to Make Your House Look AwesomeAround The House

Trump Worth $10 Billion Less Than If He’d Simply Invested in Index FundsBusiness

Do This or Your iPhone Bill May SkyrocketSave

11 Places in the World Where You Can Afford to Retire in StyleMore

19 Moves That Will Help You Retire Early and in StyleFamily

What You Need to Know for 2017 Obamacare EnrollmentFamily

8 Things Rich People Buy That Make Them Look DumbAround The House

50 Ways to Make a Fast $50 (or Lots More)Grow

32 of the Highest-Paid American SpeakersMake

The 35 Two-Year Colleges That Produce the Highest EarnersCollege

5 DIY Ways to Make Your Car Smell GreatCars

Amazon Prime No Longer Pledges Free 2-Day Shipping on All ItemsMore

More Caffeine Means Less Dementia for WomenFamily

7 Household Hacks That Save You CashAround The House

5 Reasons a Roth IRA Should Be Part of Your Retirement PlanGrow

30 Awesome Things to Do in RetirementCollege

Beware These 10 Retail Sales Tricks That Get You to Spend MoreMore

9 Tips to Ensure You’ll Have Enough to RetireFamily

How your tax refund can be seized, and how you can prevent it.

This post comes from Gerri Detweiler at partner site Credit.com.

Many people have already filed their taxes this year — particularly those owed refunds. Because of rising taxpayer identity theft, it’s a smart idea for anyone to file quickly. However, some taxpayers are discovering the refund they thought was coming has instead been taken to pay their student loan debt.

Here’s a sample of questions recently sent to Credit.com:

  • From Amber: Is there anything I can do to stop my whole federal refund from going to my student loans? … I’ve just set up a payment plan, but I really need my refund this year.
  • From Peggy: I was looking forward to my tax refund as it will help with bills and much needed things for the baby. It was accepted and … now after digging around I found out they are sending it to the U.S. Dept. of Ed. for my student loans which I thought were in deferment. Now this is causing me and my kids a hardship but they refuse to send me the refund… What can I do to get my refund owed to me?
  • From Luis: I heard that if your student loan is in default and they are intercepting your taxes, It goes towards interest of the loan. Getting your loan out of default you can then get the intercepted (money) back. Is this true? Is there some info on this?

First, some background: If you are in default on your federal student loans (which by definition means you are behind by 270 days or more), the Department of Education can take your tax refund using the Treasury Offset Program. This program authorizes federal payments such as tax refunds or Social Security income to be intercepted in whole or in part to pay debts owed to other federal agencies. There are some limited consumer protections, but debtors aren’t always aware of them.

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,629 more deals!