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Should My Daughter Work With the IRS or CCCS on Her Student Loan Debt?

“Dear Steve,

Need to see if you can help with this question.

My 21yr old daughter just found out via having her income tax refund offset due to past due obligation, that she has an outstanding school loan from 2006. Apparently when she was 18, her stepmother had her sign loan documents along with her enrollment documents to a trade beauty school. My daughter thought she was simply filling out enrollment docs and had no idea she was signing a loan document.

She moved out of their home that same year – the address on the loan was obviously still her father’s and stepmothers house – so when the loan was not paid all correspondence to the beauty school and the default credit company were going to their address and not to my daughter – and not forwarded to my daughter. Otherwise she would have known she was in default and had a $5,800 loan outstanding.

Can you advise if we should have her work directly with the IRS financial management service or possibly go thru CCCS. The financial management company wants her employment info – can they also go after her paycheck. Also once she starts on a payment plan to whomever, will the refund offsets still be in play until the debt is gone or is there a way we can have the offset taken off.

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Thanks for your help – Camille”

Dear Camille,

It sure sounds like your daughter learned a hard lesson about being an adult. No matter how she feels she was mislead by her stepmother, I think it’s clear she owes the money now. Hopefully she graduated and got the benefit of the loan.

Since no action was taken on the loan she is now having her tax refund kept as part of the Internal Revenue Service Refund Intercept Program.

The best course of action would be for her to contact the Department of Education collection department directly and inquire about her option to rehabilitate the loan. There is no need to contact CCCS on this matter.

See also  Help! My Tax Refund Was Taken to Pay My Student Loan Debt

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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