Can I Get Another Chance?

I want to go back to school!

Dang Recession!

I could not make my student loan rehabilitation payment this month. A representative from the program said it would work with me...I hope so.

Good News

I got a call from the loan rehabilitation company and they told me I would be eligible for pell grants in three months! yea!

Should Have Gotten It In Writing

I was told when I signed up for my student loan rehabilitation program that after my first payment that the offset on my tax return would be lifted. I was also told that I would receive a packet in the mail that outlined the program...I should have called when I didn't receive it but I naively thought it had just been delayed. When I finally did call after my first payment I was made aware that the offset would be removed after nine months of being on the program.Getting my refund at all is good news and worth being on the program, and the program has other good benefits as well, but if you decide to sign up for a program get everything in writing before you make any payments.

Show Me The Money

My first payment was made for the rehabilitation loan program I entered into. I will wait a day or two and then start checking to see when the offset is taken off of my IRS account

Have You Ever Seen a Grown Woman Cry?

I can't say it was a total surprise; I knew I had defaulted on my student loan but when I called and found out my income tax refund would be offset it really hurt my feelings. Income tax refunds can be offset to repay federal debts such as student loans, child support etc. The number you can call to find out if your income tax refund will be offset is 1- 800–304–3107. After finding out my income tax refund was scheduled to be offset I used wisdom and did not file right away in order to find a way to still get my refund. I entered into a student loan rehabilitation program it was $400.00 down and $314 a month and after my first payment they said they would remove the offset from my IRS account. I know that $400 down and $314 is steep but it sure beats the alternative (no income tax and the holder of the loan can have payments deducted from your pay check). I had about two weeks to come up with the down payment and then another month before my first payment. After six months I will be eligible to receive financial aid and I can defer my loan if needed. My income tax is more than enough to pay for six months of payments so it was well worth it to me. I have wanted to return to school for my masters along time now too.

Innocent Spouse Relief

Innocent Spouse Relief

By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. The IRS can collect these amounts from either you or your spouse (or former spouse).

The IRS will figure the tax you are responsible for after you file Form 8857. You are not required to figure this amount. But if you wish, you can figure it yourself. See How To Allocate the Understatement of Tax, within the Publication 971.

You must meet all of the following conditions to qualify for innocent spouse relief.

1. You filed a joint return which has an understatement of tax due to erroneous items (defined below) of your spouse (or former spouse).

2. You establish that at the time you signed the joint return you did not know, and had no reason to know, that there was an understatement of tax (See Actual Knowledge or Reason To Know, defined below).

3. Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax. (See Indications of Unfairness for Innocent Spouse Relief, later).

4. A request for innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, ex-spouse, or business partner.

Injured Spouse Relief

Innocent Spouse Tax Relief Eligibility Explorer

Equitable Relief


All the facts and circumstances are considered in determining whether it's inequitable to hold you liable. Some of the factors considered include:

The taxes owed are your spouse's or ex-spouse's.
You are no longer married to that spouse.
You thought your spouse would pay the taxes on the original return.
You didn't know about the items changed in the audit.
You would suffer a financial hardship if you were required to pay the tax. You would not be able to pay for basic living expenses like food, shelter, and clothing.
You did not significantly benefit (above normal support) from the unpaid taxes.
You suffered abuse during your marriage.


If you meet the requirements contact IRS to talk with a representative or go to the website and print out the form/

Where's My Refund?

Did you know that your federal income tax can be taken from you to pay debts owed such as student loans? Failure to Pay Child Support, Federal Non–Tax Debts, State Income Tax Obligations and Unemployment Compensation Debts

The Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, has been authorized by Congress to conduct the Treasury Offset Program. Through this program, your refund or overpayment may be reduced by FMS and offset to pay any past–due child support, Federal agency non–tax debts, state income tax obligations or certain unemployment compensation debts owed a state (namely debts for compensation that was paid due to fraud or for contributions due to a state fund that were not paid due to fraud).

You can contact the agency with which you have a debt, to determine if your debt was submitted for a tax refund offset. You may call FMS at the number below for an agency address and phone number. If your debt was submitted for offset, FMS will take as much of your refund as is needed to pay off the debt and send it to the agency you owe. Any portion of your refund remaining after offset will be issued in a check to you or direct deposited for you.

FMS will send you a notice if an offset occurs. The notice will reflect the original refund amount, your offset amount, the agency receiving the payment, and the address and telephone number of the agency. FMS will notify the IRS of the amount taken from your refund. Contact the agency shown on the notice if you believe you do not owe the debt or you are disputing the amount taken from your refund. If a notice is not received contact FMS at 800–304–3107 or TDD 866–297–0517. The available hours are Monday through Friday 7:30AM to 5:00PM CT. Contact the IRS only if your original refund amount shown on the FMS offset notice differs from the refund amount shown on your tax return.

Discuss Repayment With Your Lender

Discuss a repayment plan with your lender. -- You have several ways to repay your loan by making monthly installment payments on your account
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Standard Repayment – fixed monthly payments of at least $50 with up to 10 years to repay in full.

Graduated Repayment – monthly payments will begin low and increase gradually over time.

Extended Repayment – lowers monthly payments over a longer period of time and has a predictable payment schedule.

Income Contingent and Income-Sensitive Repayment – monthly payments are calculated as a percentage of your income

Payment Relief

Get Payment Relief

If you have trouble making your student loan payments, contact your loan servicer immediately. You may qualify for some form of payment relief. And it's important to take action before you incur late fees or your credit is affected.



Types of relief

A deferment is a temporary suspension of loan payments for specific situations such as returning to school, unemployment, disability, or military service. You have a right to defer repayment for certain defined periods.

Forbearance is a temporary postponement or reduction of payments for a period of time, as you and the lender or holder of your loan may agree, because you are experiencing financial difficulty.

Graduated payment plans provide short-term relief through low, interest-only payments followed by standard principal and interest payments.
Income-sensitive or income-contingent payment plans offer payment relief with payments that are a specific percentage of your gross monthly income.
For more information on graduated, income-sensitive, or income-contingent payment plays,
Federal interest subsidies
These options will provide you with payment relief and help you maintain a good credit rating. If you qualify and apply for federal interest subsidies on your loan during deferments, you loan balance will not increase during the deferment period because the government will be making interest payments on your behalf. However, if you do not qualify for federal interest subsidies on your deferment, or if your loan is in forbearance, your loan balance will increase by the amount of unpaid accrued interest.Issues in obtaining relief

It is import to act quickly if you find your student loan payments hard to handle. If you default, or fail to make your loan payments as scheduled, you risk very serious consequences. Your school, the financial institution that made or owns your loans, your state education loan guarantor, and the federal government can all take action to recover the money you owe. They may notify national credit bureaus of your default, negatively affecting your credit record. You could find it difficult to borrow money to buy a car or a house, and you would be inellible for additional federal student aid if you decided to return to school. The financial institution that owns your loans may ask your employer to deduct loan payments from your paycheck (garnish your wages), and your state and federal income tax refunds could be withheld ( tax offset) and applied toward the amount you owe. Also, delayed payment and collection activities could increase the cost of your loan.

So, if you’re having trouble with loan payments, don’t wait! Contact your loan servicer immediately.

Rehabilitating Your Loan

Rehabilitate a Loan

Under the loan rehabilitation program you and your loan holder (or the Department of Education if you have a defaulted Direct Loan) agree on a reasonable and affordable payment plan for nine (9) payments over a ten month period (Perkins Loan requires nine (9) consecutive monthly payments). In most cases, you sign a rehabilitation agreement specifying payments and responsibilities. A loan is rehabilitated only after you have voluntarily made the agreed-upon payments on-time and the loan has been purchased by a lender. Outstanding collection costs may be added to the principal amount.

Loan rehabilitation offers the following:

The 9 voluntary on time payments you make while rehabilitating your loans will be subtracted from the maximum repayment term of your loan.
Rehabilitating your loan(s) removes the default status of previously defaulted loans at completion of the process. National credit bureaus are notified when the loan is no longer considered in a default status.
Title IV Program including any remaining eligibility for deferment or forbearance, from the date of the rehabilitation.
Repayment plans available to other borrowers with the same loan type may be available to you, depending on your qualifying status.
Please keep in mind:
The amount of your monthly payment after rehabilitation may be more than the amount you paid while you were rehabilitating your loans.
Any interest outstanding at the time your loan is rehabilitated will be added to your current outstanding principal balance, increasing the total amount you owe. Collection costs may also be added to your principal balance, increasing the total amount you owe.
Delinquencies reported before the loan(s) defaulted will not be removed from your credit report.

Make sure that you understand the differences in loan rehabilitation for the different loan programs. For questions on rehabilitation of Perkins loan, please contact your school directly to establish an agreement. Please keep in mind that schools often contract with companies to service Perkins Loans. In those instances, the servicing agreement will be made with the borrower by the company acting on behalf of the school. It takes 9 consecutive loan payments to rehabilitate a Perkins loan. For FFEL loans, at the completion of the schedule of rehabilitation payments, a participating lender must agree to purchase the defaulted loan and assume servicing of your loan. You must continue making payments during this time.

Ways to Prevent Loan Default

Top Ten Ways to Prevent Defaulting on a Student Loan

1. Understand your rights and responsibilities regarding your re.payment obligation as well as your repayment options.

2. Borrow for college expenses only. Borrow only the amount you need and only what you can reasonably expect to be able to repay.

3.Keep all records regarding your loan. Make copies of all letters, canceled checks, and any forms you sign.

4.Notify your lender or servicer when you have a change of address, phone number, or name, or if you change schools or your enrollment status.

5.Seek help as early as possible if you have any difficulty maintaining your student loan repayment arrangement.

6.If you have any questions, talk to your lender or student loan guarantor about the particular terms of your loan.

7.Keep credit card debt to a minimum or avoid credit card debt completely.

8.Create and maintain a budget that is within your monthly income.

9.Consider making nominal student loan payments while in school. This will reduce the amount you owe after graduation.

10.Make loan payments on time.