[jessicafairy]

Anybody find a way around it? I'd really like to actually receive our tax return this year, in part so I can use the money to pay down the student loans!

The loans are in my name from before and after Dh & I got married.
They've been in default (and garnishment) for 5 years.
I think they total around $15,000

Thanks!

 

[Emmeline II]

You are in default of a loan to the government; you don't have a return until your debt with them is cleared.

 

[jessicafairy]

I understand that I owe the Dept. Of Ed. I don't understand why that should prevent me from accessing the EIC !

We are low income enough that we don't actually pay taxes. It's really the earned income credit I'm after. Our budget is tight enough that I can't scrape together a few hundred dollars so the loan people will actually take me seriously. As a SAHM I have little to no income and Dh and I don't have the same set of priorities on thius issue. Yes, I should get him on board, Yes, I should try to make more money. I don't actually expect to get it I was just hoping there was away around it!

 

[Denvergirlie]

I don't understand... you want your tax return to pay down your student loan, but it's being garnished because of your student loan... well then it's already doing what you state you want to do with it.

But, no, the answer is normally no, there is now way around it.

If it's his loan that's in default, you could file an injured spouse hardship, so that all the refund isn't taken, or vice versa, your loan, but he wants the money. I don't know much about it myself, but you can do some reasearch into an injured spousal hardship.

Here is a bit of information I found online: http://www.fairmark.com/spousal/injured.htm
but you'll need to do your own research.

 

[Knittin' in the Shade]

if you've got not other ways of paying the loan through your normal budget, and you say you want to use the refund to pay the defaulted loan, what's the problem?

 

[shayinme]

Quote:

Originally Posted by jessicafairy I understand that I owe the Dept. Of Ed. I don't understand why that should prevent me from accessing the EIC ! We are low income enough that we don't actually pay taxes. It's really the earned income credit I'm after. Our budget is tight enough that I can't scrape together a few hundred dollars so the loan people will actually take me seriously. As a SAHM I have little to no income and Dh and I don't have the same set of priorities on thius issue. Yes, I should get him on board, Yes, I should try to make more money. I don't actually expect to get it I was just hoping there was away around it!

I understand where you are coming from but the DOE as a government entity is pretty clear that if you default they will take your tax return. I owe the IRS and even with a payment plan, should I ever have a year where I am eligible for a refund or even last year's stimulus they take it.

Sadly I doubt there is any around this as long as you are in default. Maybe you can look into getting out of default and go from there.

 

[velochic]

It's a tax credit that is paying for your school loan through garnishment because you aren't required to pay taxes. That means that other tax payers are actually paying for your school loan. Sounds like a good deal to me!! I'd let it go and remember that you didn't have to pay your school loan debt out of your own pocket. You'll be better of financially.

 

[jessicafairy]

Quote:

Originally Posted by Knittin' in the Shade if you've got not other ways of paying the loan through your normal budget, and you say you want to use the refund to pay the defaulted loan, what's the problem?

The problem is I may want to receive financial aid again in the future. If my loans get paid off by garnishment I'm not elligible for financial aid again.

Also, I would prefer to use part of the money for other things

 

[jessicafairy]

Quote:

Originally Posted by shayinme I understand where you are coming from but the DOE as a government entity is pretty clear that if you default they will take your tax return. I owe the IRS and even with a payment plan, should I ever have a year where I am eligible for a refund or even last year's stimulus they take it. Sadly I doubt there is any around this as long as you are in default. Maybe you can look into getting out of default and go from there.

I've been meaning to deal with the default thing...they just aren't really interesed in the very little I can offer them!

 

[jessicafairy]

Quote:

Originally Posted by velochic It's a tax credit that is paying for your school loan through garnishment because you aren't required to pay taxes. That means that other tax payers are actually paying for your school loan. Sounds like a good deal to me!! I'd let it go and remember that you didn't have to pay your school loan debt out of your own pocket. You'll be better of financially.

Thank you for your (unusual) perspective. I needed the smile it brought me!

 

[Skywise]

Your tax return is going to be taken, there is really no way around it. You can file an injured spouse and get about half of it back since the loans aren't in your dh's name. Have you talked to whoever has your loans about rehab? They are supposed to take whatever is reasonable and affordable. If the collection agency won't work with you then call the Dept of Education and find out who the liasion is for the particular collection agency that has your loan. If they can't help you then call the Ombudsman and see if she can help. The DOE told me the collection agency can take as little as .86% of your loan amount per month as your rehab payment. Then if you get out of default you can look into doing the income based repayment.

 

[velochic]

Quote:

Originally Posted by jessicafairy Thank you for your (unusual) perspective. I needed the smile it brought me!

I didn't mean that to be cheeky. What I'm saying is that you have to look at it from a different perspective.

 

[Magpie1972]

Even after your refund has been garnished your HUSBAND if they are just your loans can file an injured spouse... not you. The check comes to him alone.

You can do this retroactively but it will wreak havoc on your student loan. Also, while the loan has been fed for 5 years out of the refund, I can't see why you weren't offered the opportunity to pay it in installments. We were after one year and we have been paying it on time ever since. They were my husband's prior to marriage. I got back about 1/3 of the refund and we had 3 kids and I made about 70% of our income.

 

[Emmeline II]

Quote:

Originally Posted by jessicafairy I understand that I owe the Dept. Of Ed. I don't understand why that should prevent me from accessing the EIC !

You have a Federal student loan from the Federal government. The entity you owe money to and the entity you want money from are the same.

I see your issue with future aid; I pursue the installment angle perhaps the injured spouse for your dh.

Not trying to be sarky, just trying to be clear.

 

[Eman'smom]

The government is basically paying your student loan for you free of charge, I'd say thank you and let it go.

 

[cristeen]

Quote:

Originally Posted by jessicafairy The problem is I may want to receive financial aid again in the future. If my loans get paid off by garnishment I'm not elligible for financial aid again.

Only if you let them pay off completely through garnishment - i.e. never pay them another penny out of pocket, letting your tax returns cover it, is that true. I was garnished years ago, but because I finally settled out of pocket once the total got under $1K, I was able to go on to get more loans.

Are you working? If you're not working, then you're eligible for deferment, if you are working, then look into income based repayment. Either way, showing a willingness to work with the student loan company can be difficult - you will have to speak to at least one manager to get anywhere. The people who answer the phones will just keep telling you no - ask for a manager repeatedly until you get a different answer. Stay calm and know exactly how much you can afford to pay them per month before you call.

 

[mysticmomma]

Your dh should be able to get advanced eic throughout the year. If you're not working, then you're eligible for deferment. You have to communicate with these people though.

 

[Skywise]

You have to get out of default first before you can get a deferment though.

 

[Mama Dragon]

Here's what I've learned so far.

Consolidation. DirectLoans.com. Governement run.

Consolidate your loans, they can be defaulted on (DH and mine were). Do an income contigent replayment schedule (DH and I owe nothing per month, but we can pay if we have it). Pay the bill, every month. Next year, you'll get your tax return.

 

[AndrewsMother]

If you qualify for EIC, you should qualify for very low income contingent student loan payments. Could you manage to pay your student loans on time for 9 months? Nine months of current payments are required to lose your default status. After 9 months you are eligible to return to school.

I was in default for about a year, but when I lost my job I applied for income contingent payments that were reduced to $0. After 6 months of making $0 payments I was eligible to return to school. Call different loan rehabilitation agencies to discuss how they are able to best serve your needs.

The year that DH and I were both basically unemployed for most of the year we earned roughly $36,000. For a family of three my income contingent payments were calculated at $40 a month but I did not have to pay them because I am in school.

As others have stated your DH is eligible to apply as an injured spouse if you all were not married at the time that you incurred the loan debt.

maybe this will help you