Today on this Tax Day, the National Consumer Law Center (NCLC) has released Voices of Despair: How Seizing the EITC Is Leaving Student Loan Borrowers Homeless and Hopeless During a Pandemic. The updated report builds on a 2018 NCLC report that compiled stories from dozens of borrowers recounting the hardship caused by the federal government’s […]
Defaulted student loan borrowers planning to file their taxes should know that any refund they were expecting will likely wind up at the Department of Education (ED) instead of their bank account. Tax refund offsets are one of the powerful tools the government uses to collect defaulted federal student loans. For many struggling student loan borrowers, […]
According to the IRS, if you went to a Corinthian school and had your loans canceled under the borrower defense rule, you should not owe taxes on the canceled amount. Unfortunately, we have learned that the Department of Education and its servicers sent IRS forms 1099-C to Corinthian students whose loans were canceled in 2016. […]
This week, the National Consumer Law Center updated its policy brief highlighting the need to end the seizure of Earned Income Tax Credits (“EITC”) from defaulted federal student loan borrowers. As we have said in previous blog posts (here and here), seizing EITC payments is a counterproductive policy. The EITC is extremely important to working […]