The Offset Process
If you fail to maintain payments on your defaulted student loan, federal and state payments to you may be “offset,” or withheld, and applied as involuntary payments to your account. (In community property states, the refund of one spouse can be applied to the other spouse’s student loan debt, if they filed a joint return.) Once your debt is certified for offset, it will stay certified until it is paid in full.
There are two types of offset. In both types, payments to you would be re-directed to EdFund and applied to your defaulted student loan balance.
Treasury offset:
Federal payments and the percentage eligible for offset:
- 100% of your tax refund
- 100% of any economic stimulus payments
- 15% of any Social Security income payments
- 100% of wages and reimbursements if you are a federal contractor
State offset:
State payments and the percentage eligible for offset:
- 100% of your tax refund
- 100% of any lottery winnings
Prior to the certification of an account for offset
You would be notified in writing of our intent to certify your account for offset. To prevent certification of your account, here’s what you would need to do within 65 days of receipt of the letter:
If your account is certified for offset
You still have options. Please contact EdFund’s loan repayment counselors at 1.800.367.1589.
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