I am really in it now people.

Just this afternoon, I recieved a notice in the mail that I will have a claim against me for default of my student loan.

In it, it states that they will offset the loan against any Federal payments I may be entitled to recieve in the future, i.e. Income tax refunds, etc.

I work as a temp, however the company in which I am temping, wants to hire me full time. I can't afford another bill at least until I am guaranteed this new position.

What are my options?
Please help!

Did they list any options in the letter?

I had this happen to me and they took my Income tax refund..at first I was upset then I was glad that it was over and done with.

Keep in mind that taxoff set amounts are sent to the IRS in Novemeber. Interest continues to accrue until the guarantey agency or Direct Loans receives the funds. There is also a charge, $20 or so for the cost of tax offset. So if you balance is $1200 in Novemeber and they seize $1200 in april, you still will have a remaining balance on your account.

Yea, I have until the end of this month to respond to the notice that they sent me. I refuse to let them take my Income Tax refund, so I'm going to have to make a deal with them, probably one that I will get the short end of. Are there any option/rights that I should make sure I stick to so that I don't end up breaking my pockets?

I know that one of there tricks is to ask for financial information to prove that I can only pay what I say I can.

I am soooo confused as to what they can and can't do, and what options I do and don't have.

From my experience, each guarantor sets down their own requirement for release from tax offset. Some lenders required a cumulitive payment of $500 by a certain date, others required monthly payments of $50. There is no predicting what their requirements will be from year to year. If can be a dollar amount paid monthly or percentage. Call them and find out what you need to do.

I also would not wait until the end of the month to respond. Things are crazy at agencies at month end.

Just wanted to say thank you for all of the great advice. I recently called AES and OSI was the CA, so I got my loans into the initial status of Rehab. I'm paying $140.00 per month for twelve months after which time my loans come out of defaulted status.

Please keep in mind that it may be necessary to make a 13th payment on your rehab....it is not an automated process. And since you will rehab next summer, it is even more cruicial that you stay on top of it, since a lot of employees like to take summer vacations and things always run slower.

Absolutely Lynn, the man i spoke to me made me aware of that fact. I will make sure I keep up on the payments, and stay in contact with the CA. We'll see how it works out.