What is The Easiest Way For Me to Not Have My Tax Refund Intercepted This Year for Student Loans?


Dear Steve,

Multiple federal loans and grants in default. 3 of which have already been placed in a rehab program with monthly payments of $5. Currently a homemaker with one income, fiances’, as I am home with our 3-month-old child. Looking for best option to get all of my loans out of default and the best, and yes also quickest because of tax filing deadline, to begin the process of getting the treasury offset lifted on my taxes.

I have multiple federal student loans and grants in default resulting in a treasury offset on my taxes. I have contacted my loan servicer and recommended to a rehab program with income-based payments to get them out of default after 9 payments but only on a portion of my loans. I am unsure, but assuming the rehab program is just for the oldest ones and steered away from a consolidation option. Is this the best option for me, as a single mother with a limited budget, to start paying on my loans and quickest way to start the process of getting the offset lifted to be able to collect my taxes this year?



Dear Sierra,

Simple. Wait till your loans are out of default with the rehab and then file your tax return. You can file an extension if you need it. You can file for a tax return extension by using IRS Form 4868.

A refund that is not on its way can’t be offset or intercepted. So just delay filing your return and get your student loans back on track.

For those federal loans that are not in rehab, consolidate them into a new Direct Consolidation Loan and opt for an income-driven repayment option.

There is no fee for you to consolidate your loans.

You can start the process and get more information on this, here.

When your federal loans in rehab are brought current again then reconsolidate the rehabed loans and the Direct Consolidation Loan into a new Direct Consolidation Loan and select the best income-driven repayment plan for you.

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This will give you the lowest income-based monthly repayment on all your loans, give you one payment, and keep you current.

Rehabilitation is a one time option. Use it to your advantage and get this all under control.

Once you have made at least five rehab payments on the loans and the servicer is saying they are current, then you can file your tax return and safely receive your refund.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Damon Day - Pro Debt Coach

Steve Rhode

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