Are you letting your tax refund offset your student loans? Think again!

In a recent interview with Jay Fleischman, a lawyer and host of the Student Loan Show, Jay shared a strategy for repaying student loans: Tax Refund Offsets.

A Tax Refund Offset is where the federal government confiscates your tax refund check and applies it to your student loans.

Jay said people do that, but it’s not a good idea.

First of all, they won’t confiscate a tax refund unless there is a judgement against you. That’s not a good thing!

Second, the collector has the right by federal regulation to recoup collection costs (generally 24% of principle and interest combined) based on what the debt collector obtains.

So, effectively you are paying 24% more for your student loans.

If you were to go through rehabilitation of the loan instead, which involves paying 9 monthly payments over a 10 month period of time, your loan comes out of default.

Learn more by listening to the 5 Reasons You Should Never Default on Student Loans

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