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Member
smpabst81
Posts: 11
Registered: ‎01-18-2014

Re: Tax Returns and Student Loan Rehabilitation

Thats where the conflicting info is. Is it upon completion or anytime during the process?
New Contributor
redsox31324
Posts: 59
Registered: ‎10-19-2013

Re: Tax Returns and Student Loan Rehabilitation

I don't have a clear knowledgeable answer to that. I can only tell you what happen in my situation.
Regular Contributor
scvbd99
Posts: 194
Registered: ‎02-22-2013

Re: Tax Returns and Student Loan Rehabilitation


smpabst81 wrote:
Thats where the conflicting info is. Is it upon completion or anytime during the process?

It depends on the collection agency/loan holder.  

 

ECMC was one of my collection agencies, and the other was NELA.  ECMC sent info to the Dept of Treasury to cancel my tax offset the instant that I signed my rehab agreement with them.  NELA wouldn't do it until after I had made the first 4 on-time payments of the rehab process.  

 

In short, find out what your collection agency's policy is.  Remember, it can take 4 weeks or more from the time that your collection agency sends info to the Dept of Treasury for the cancellation of your offset to go through. 

 

Also, you need to call this number to find out exactly who might take your tax return:  (800) 304-3107.

 

Until that number says that nobody is offsetting your taxes, you will be offset.  

 

Also, if you know with 100% certainty that you do not owe the IRS money, you don't have to file your taxes.  The govt doesn't mind a bit because if they owe you money, and you don't file taxes, then it becomes an interest free loan for them.  They won't be knocking your door down to get you to file.  And you can collect back tax returns for up to 3 years after the deadline.  Again, that's only if you know with 100% certainty that you don't owe a single penny to the IRS.  

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Regular Contributor
scvbd99
Posts: 194
Registered: ‎02-22-2013

Re: Tax Returns and Student Loan Rehabilitation

Also, for the people talking about GC services, they are a collection agency.  They wouldn't be the ones to place the offset with the Dept of Treasury, so they aren't the ones to talk to about it.  

 

One of my loans was owned by Sallie Mae, serviced by NELA, and GC was the collection agency they used when I defaulted.  I had to communicate directly with Sallie Mae and NELA to find out their policy on removing the tax offset.  

||| USAA Visa, $6000 ||| USAA Amex, $5000 ||| Amex BCE, $3000 ||| Chase Freedom, $2000 ||| Cap1 Quicksilver, $2000 ||| Discover It, $1500 ||| TU FICO: 738 ||| EQ FICO: 719 ||| EX FICO '08 : 718
Member
smpabst81
Posts: 11
Registered: ‎01-18-2014

Re: Tax Returns and Student Loan Rehabilitation

Ive called the 800 number for the IRS and I'm set for an offset. Ive tried to press my collection agency on the issue and they say they don't do tax offsets. So.... I'm obviously going to wait to file my taxes. It sounds like there really isn't a standard for this and that its a case by case basis. Any ideas for pressing the collection agency for an answer?
Member
smpabst81
Posts: 11
Registered: ‎01-18-2014

Re: Tax Returns and Student Loan Rehabilitation

My understanding, the US dept of Ed places the tax offset with the FMS and the treasury. Correct?
Regular Contributor
scvbd99
Posts: 194
Registered: ‎02-22-2013

Re: Tax Returns and Student Loan Rehabilitation


smpabst81 wrote:
Ive called the 800 number for the IRS and I'm set for an offset. Ive tried to press my collection agency on the issue and they say they don't do tax offsets. So.... I'm obviously going to wait to file my taxes. It sounds like there really isn't a standard for this and that its a case by case basis. Any ideas for pressing the collection agency for an answer?

The collection agency probably has no control over the offset.  You need to talk to the loan holder and/or current servicer of the loan to find out their policy for lifting the tax offset.  

||| USAA Visa, $6000 ||| USAA Amex, $5000 ||| Amex BCE, $3000 ||| Chase Freedom, $2000 ||| Cap1 Quicksilver, $2000 ||| Discover It, $1500 ||| TU FICO: 738 ||| EQ FICO: 719 ||| EX FICO '08 : 718
Member
smpabst81
Posts: 11
Registered: ‎01-18-2014

Re: Tax Returns and Student Loan Rehabilitation

I'll try that one. The original lender is Sallie Mae
New Contributor
SashaDixon
Posts: 66
Registered: ‎01-17-2014

Re: Tax Returns and Student Loan Rehabilitation

My loan rehab process seemed to be a bit different from others here, so I will give you my story and see if it helps.

 

My default was years in the making, 4+ I believe. Mine got so far behind they were garnishing my checks!! I entered into a rehab program around April of 2011 with United Student Aids funds, and my payments were $105 per month (mostly applied to interest, some months no money ever hit principal). At the time of entering into the agreement, my USA funds representative explained how the removal of liens worked. He stated that after my first payment to them they would no longer proceed with garnishment, then four months after that I would be pulled from the lien against my tax returns, after that it's 9-10 months and then they will attempt to have a new lender take over your loan (which for me was ACS/JPMORGANCHASE). Once a new lender takes over your loan, you pay directly to them and the guaruntor removes all default status (as if it never existed) from all CRs. 

 

I would google"student loan rehab requirements".

 



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Member
smpabst81
Posts: 11
Registered: ‎01-18-2014

Re: Tax Returns and Student Loan Rehabilitation

It seems that its all on a case by case basis, but I've seen a lot of the 4 month payment and removal of the offset. I'm definitely going to do some more research!
My next question..... I understand these defaults hurt your credit score badly. I am rehabbing 2 batches of loans and heavily working on cleaning up my credit (outside of SL less than $2k in outstanding debt) as I am preparing to buy a house in the next 2-3 years. What kind of change can I expect on my score? Has anyone else had this experience? Once I finish rehab, I'm considering using a credit counseler. Does anyone have experience with this?

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