Can i still get my tax refund if i preserve sallie mae loans?

Your federal tax refund can end up in sallie mae's hands to repay a defaulted student loan.

Most creditors can t intercept your tax refund and apply it to an outstanding debt, but there are some, like sallie mae, who can. Through the treasury program, payments you receive from the federal government can be used to pay off certain student loans and a limited amount of other debt. But an outstanding loan with sallie mae doesn't necessarily mean you won't get your tax refund.

Sallie mae federal loans

Only student loan creditors who are federally guaranteed or insured are eligible to receive your tax refund through the treasury equalization program, whether it is sallie mae or another company servicing the loan. But money to sallie mae, even if it's for past due loan payments, won't stop you from getting a tax refund – your loan must be in default before sallie mae can take it. So if you don't use a perkins, PLUS, subsidized or subsidized student loan, your refund is safe with sallie mae.

Sallie mae private loans

Sallie mae offers a range of private loans for students who need extra funds to pay for school. If you take out this type of loan and fall behind on your payments or default, sallie mae still cannot access your tax refund because it is not eligible to participate in the treasury equalization program to collect private loans. Alternative methods, such as obtaining a court judgment to place liens on your property, wage supplements, and freezing your bank account, are available to sallie mae to collect unpaid private student loan debt. Therefore, if you deposit the tax refund into your bank account and you are not aware that there is a judgment against you, the refund may be within sallie mae's reach if it decides to freeze your accounts.

Advance notice

Whenever a creditor is successful in requesting a tax refund, the law requires you to know about it. The bureau of fiscal service, or BFS, – a bureau within the department of the treasury – will send a notice to your home informing you that sallie mae has received, or will receive, your income tax refund. The notice will state the amount of your tax refund and how much of it will be used to pay off the student loan, and will give you sallie mae's address and phone number. If you do not agree with the information in the notice or did not receive one, you may contact the FSO at 800-304-3107 to. But if you dispute the debt or the amount you owe is incorrect, you may contact sallie mae directly.

Remaining refunds after offset

If your tax refund is more than you owe sallie mae loans, you will receive the excess money in a paper check or by direct deposit if you enter the required account information on your return. However, the remaining funds can be used to repay other debts you owe to the federal government, unpaid state and local income taxes, past due child support, and any unemployment compensation you have received to a government agency