Education

Trump officials may be seizing student loan borrowers’ tax refunds ‘without required notice’: lawmakers

By Annie Nova

Copyright cnbc

Trump officials may be seizing student loan borrowers' tax refunds 'without required notice': lawmakers

Some 10 million student borrowers are already, or soon may be, in default and are at risk of getting their tax refund seized, according to the lawmakers’ letter.

The Education Department website states that the offset notice “may only be sent once.”

Lawmakers wrote in their letter that it appears the Trump administration may consider any warning of intent to offset a benefit or tax refund — even if it was issued years ago and before the pandemic — sufficient to satisfy its requirement for notice.

Legally, that may be the case, said higher education expert Mark Kantrowitz. However, he said, “there is no precedent where there was a delay of several years between the time the U.S. Department of Education issued a notice of intent to offset and when the offset occurred.”

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The department’s failure to give some borrowers recent notice of offsets raises concerns about the accuracy of its latest data on borrowers’ “true outstanding balance” and contact information, the lawmakers write. The Trump administration’s termination in March of nearly half of the staff at the Education Department, including many of the people who assisted borrowers in the Federal Student Aid office, may be exacerbating the problem.

“Many borrowers have likely gotten married; moved across state lines; become parents of dependent children; or have suffered drastic misfortunes that aren’t reflected in their individual profiles with the now-gutted FSA,” the congressmembers wrote.

According to their letter, “The Department should consider borrowers’ potential life changes as an additional responsibility for issuing a renewed notice before collecting on a defaulted student loan.”