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Established Member
Posts: 33
Registered: ‎01-21-2014
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SL question. rehab/refund related

I started reading the other tax return post, but that began in 2011. I don't know if things have changed or not, but regardless, it didn't answer my question exactly.

I have one SL that is past rehab and have made a couple payments while in good standing. The other SL is 5 months deep into rehab. As far as I have read this far, more than likely my federal/state refunds will most likely be taken. Now, I could file for an extension to complete payments for rehab completion, THEN file my taxes once new lender has remainder of loan. Best I can tell, there is no other way to get my refunds while in rehab.

But.... what if I paid the loan in full while still in rehab... like tomorrow. Is that possible? Would I get my refunds? Would I have to wait 30/60 days before filling?
Regular Contributor
Posts: 245
Registered: ‎02-22-2013
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Re: SL question. rehab/refund related

[ Edited ]

If you pay any loan in full, the entity that has certified you for tax offset would be legally required to decertify it.  It takes time, though, and it might even require that you follow up with a reminder.  Keep in mind that if you pay off a loan in full without completing rehab, the entity holding your loan is entitled to leave the default status of the loan in place even after it's paid in full.  That defeats the purpose of rehabbing if your goal was to clean up your credit report. 


It doesn't hurt to call the people you're in month 5 of rehab with...they might have a policy to decertify your offset after a certain number of payments.  Sallie Mae, for example, lifted my tax offset after 4 payments.  ECMC lifted my offset the day I signed my rehab agreement with them.  It all depends on the entity that certified the offset in the first place.  


No matter what, don't file your taxes until you call this number, and it says that nobody is offsetting your taxes.  (800) 304-3107


Also remember that it takes time for the offset decertification to go through.  And lastly, remember that if you know with 100% certainty that the IRS owes you money, and that you owe them nothing, you don't have to file federal taxes.  You have 3 years to file backtaxes and get refunds as long as you don't owe anything.  When my offsets were lifted in June of 2013, I filed my 2010, 2011, and 2012 taxes, and got my returns back for all of them.  Again, this is ONLY if you know for certain that you don't owe the IRS a dime.  

TU FICO: 778 ||| EQ FICO: 784 ||| EX FICO '08 : 780
Established Member
Posts: 33
Registered: ‎01-21-2014
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Re: SL question. rehab/refund related


Good thing I asked. I was prepared to pay loan (1.2k) in full while in rehab as I just received an insurance settlement from a dude striking my parked car. I will hold off on that.

The number you provided does say that the Dept of Ed is offsetting loan. The company I have the rehab agreement through, I believe is Progressive Financial or some such....a CA. I will give them a call tomorrow and see what their policy is on lifting the offset.

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