Consolidating student loans before 7 1
If your loan is in default, you may not get your tax refund due to a Federal Income Tax Return Intercept. You, the borrower, will not get back any refund money taken to pay your defaulted federal student loan. If you’re in default, use this time to take action.
You can avoid future intercepts by rehabilitating your federal student loan and remaining current on payments. Get your loan out of default, get a payment plan you can afford, and then you can file your tax return.
There, I saw the dark side of the college financial aid system.
I decided that it was unacceptable for college students to be put into student loan debt slavery and kept in the dark about their options for freedom.
Federal student loan borrowers have the option of consolidating their loans via the Direct Consolidation Loan program offered by the U. That loan is then serviced by the servicer of your choosing – of which Nelnet is one!
Consolidating allows you to merge multiple eligible loans into a single loan.
If, however, the deferment or forbearance ended, you may be in trouble depending on how long ago it ended. Department of Education sends a note to the Treasury who, upon being told by the IRS to issue a refund check, instead forwards the funds to the U. Department of Education to be applied towards your defaulted federal student loan balance.
Deferments and forbearances come in 6 and 12-month time spans.
To see the other side of this debate, read Dominique’s post: Why You Should Take Out Student Loans for College.