Student Loan Offset | Treasury Offset Payments


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Treasury Offset Payments

What is Student Loan Offset?

Students sometimes find themselves in a position where they are unable to repay their student loans in a timely fashion. Once you have fallen more than 270 days behind for a loan with a monthly payment or 330 days for a loan with a less frequent payment schedule, you are in default and the Department of Education then takes steps to collect the money due.

Treasury Offset Payments are one of the steps that may be taken. This process may include taking money from your Federal or State tax refund. Beyond that, there are other government payments, such as Social Security benefits, which may also be subject to the Student Loan Offset process.

If you are having problems making your student loan payments, don't wait until you are in default to take action. Begin by checking if you are eligible for a Direct Consolidation Loan, which can move all your Federal loans into a single payment spread out over as much as 30 years. This alone may be enough to lower your payments to a level you can live with.

If the Direct Consolidation Loan isn't for you, then check into other possibilities such as deferral or forbearance. Once again, don't wait to apply for these, because they aren't available to you if you are already in default. Get more info on deferment and forbearance at http://studentaid.ed.gov/PORTALSWebApp/students/english/difficulty.jsp.

Treasury Offset Payments happen at a time when you can least afford it, so it's best to avoid going into default if you can. Do not ignore the letters you receive in the mail just because you don't want to get bad news. The sooner you act, the better chance you will have to avoid default and all the pain that goes along with it.

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