Seizure of Tax Refunds to Collect Student Loans

The Federal Tax Refund Offset Program Unleashed!

The Federal Tax Refund Offset Program involves a complete seizure of all tax refunds that are due to debtors who are in default on their student loans. The Program also permits the seizure of monies due debtors through Special Payments such as economic stimulus monies.

The Federal Statute allows these offsets, even for debts that are being administered by or collected by, a third party, or private party, acting on behalf of the Federal Government. This same Federal Statute applies to Guarantors and the Department Of Education.

Each State has their own State Exemptions that mandate that certain Assets or Property or Wages, are Exempt, or protected from Attachment, Seizure or Garnishment by Creditors. Even if State Exemptions
apply, at least one Court in the Eleventh Circuit, Overturned a Lower Court Ruling that Alabama’s Exemptions protect against certain Seizures by the Department Of Education. If you live in the Tampa Bay Area, the Eleventh Circuit governs on Federal matters.