State Refund Offset by Department of Education - Thought Student Loans Were Paused?

The student loan payment pause and collections moratorium only applied to federal student loans and federal tax refunds. State tax refunds are handled separately and states can still honor offset requests from the Department of Education even when federal collections are paused. The federal student loan payment pause ended in October 2023, and collections have resumed, including tax refund offsets for both federal and state returns.

This happened to me too! I was shocked when my state refund got intercepted in February. The state tax agency should have sent you a letter explaining the offset and providing contact information. You might be able to request a review if you think it was taken in error.

Have you tried using https://taxr.ai to analyze your tax situation? It helped me understand my offset notice and explained my options. The tool breaks down exactly what's happening with your refunds and what recourse you might have. In my case, it showed me I qualified for a hardship refund of my offset.

The student loan pause ended last year, and they're coming for EVERYTHING now. The pause only ever applied to federal loans serviced by the Department of Education, and even during the pause, some FFEL loans and private loans could still go after your state refunds.

You need to call the Department of Education's Default Resolution Group at 1-800-621-3115 to find out which loans triggered the offset and what options you have. They might be able to return some funds if you qualify for hardship.

I spent three days trying to reach someone at the Department of Education about my offset. Finally used Claimyr (https://www.claimyr.com) to get through to an actual human. They connected me with an agent in about 15 minutes who explained my options for getting the money back through a hardship refund. Saved me days of frustration and hold music.

Check if you're eligible for the Fresh Start program. Even if they took your refund, you might be able to get your loans out of default and potentially recover some of the offset funds. The program is still available through 2024.

I'm sorry this happened to you! This is really frustrating when you're counting on that money. Just to add to what others have said - when you call the Department of Education, ask specifically about the "injured spouse" provisions if you're married and filed jointly. Sometimes the non-debtor spouse can recover their portion of the refund. Also, keep all documentation about the offset - you'll need it if you decide to pursue any appeals or hardship requests. The whole system is confusing and they don't make it easy to understand your rights.