How Do I Get My Tax Refund Back From Student Loans

How Do I Get My Tax Refund Back From Student Loans?

You worked hard all year, and now it’s tax season. If you’re like most people, you’ve been waiting for your refund check to go out the door and get deposited in your bank account. But if that money is supposed to go toward paying off student loans instead, how do you make sure it gets there?

Luckily, there are ways to make sure that your federal loan payments are taken care of without having to worry about missing out on your refund check.

Here’s how:

1.) Figure out if you can claim your student loan interest as an expense on your taxes. If so, then keep reading!

2.) If not, then file for an extension and wait until April 15th to file your taxes—which gives you more time to plan ahead and figure out what works best for your situation. To do this: Go here; click “Extend Your Filing Date”; fill out a few fields; and get ready for some peace of mind!

How Do I Get My Tax Refund Back From Student Loans

In order to qualify for a student loan tax offset hardship refund, you’ll need to provide proof of serious financial hardship. Qualifying circumstances might include:

You’re currently homeless or without residence.
You’re permanently disabled.
You’ve filed for bankruptcy and the loan was discharged.
You’ve finished your unemployment benefits.
If you think you qualify, you’ll need to figure out which agency withheld your tax return. You can also contact the Treasury Offset Program (TOP) at 800-304-3107 for more information. Once you find out which agency is withholding your tax return, contact it to receive the student loan tax offset hardship refund form. If you have a defaulted federal education loan, you can contact the Department of Education’s Default Resolution Group.

Always check with your agency to see what the tax offset hardship refund requirements are and what documents you’ll need to provide.

How to avoid a tax offset

The best way to avoid a tax offset is to make your required student loan payments on time. However, there are some other options to consider to make your student loan repayment easier:

• Refinancing: Refinancing can be a useful way to consolidate your student loans under one loan to gain a lower interest rate and better terms. The only downside is that your credit score will impact your interest and approval rates, so always check the lender requirements before applying.
• Deferment: Student loan deferment allows you to temporarily stall your payments, and interest does not accrue on subsidized loans. Federal student loans have several specific deferment programs.
• Forbearance: Forbearance will let you stall your payments, although interest will accrue during the forbearance period. If you do not get approved for a deferment, a forbearance may be worth considering.
• Income-driven repayment plan: If you do not qualify for a deferment or a forbearance, a federal income-driven repayment plan may be your next-best option. There are four options to choose from, and you can get the application from your loan servicer after discussing which plan is best for you.

federal student loans

If you decide to take out a loan, make sure you understand who is making the loan and the terms and conditions of the loan. Student loans can come from the federal government, from private sources such as a bank or financial institution, or from other organizations. Loans made by the federal government, called federal student loans, usually have more benefits than loans from banks or other private sources. Learn more about the differences between federal and private student loans.

What types of federal student loans are available?
The U.S. Department of Education’s federal student loan program is the William D. Ford Federal Direct Loan (Direct Loan) Program. Under this program, the U.S. Department of Education is your lender. There are four types of Direct Loans available:

Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.

Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need.

Direct PLUS Loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify.

Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.

How much money can I borrow in federal student loans?
It depends on whether you’re an undergraduate student, a graduate or professional student, or a parent.

If you are an undergraduate student, the maximum amount you can borrow each year in Direct Subsidized Loans and Direct Unsubsidized Loans ranges from $5,500 to $12,500 per year, depending on what year you are in school and your dependency status.

If you are a graduate or professional student, you can borrow up to $20,500 each year in Direct Unsubsidized Loans. Direct PLUS Loans can also be used for the remainder of your college costs, as determined by your school, not covered by other financial aid.

If you are a parent of a dependent undergraduate student, you can receive a Direct PLUS Loan for the remainder of your child’s college costs, as determined by his or her school, not covered by other financial aid.