WHAT IS A TAX OFFSET?

Tax refund offsets are authorized reductions/garnishments to tax refunds that the tax filer may be entitled to, but are not paid to them since they have past due debts (e.g. defaulted student loans). The CA Franchise Tax Board intercepts/offsets the tax refunds once the borrower is defaulted on their campus-based loans. Note: the Tax refund offset has been suspended from April 2020 through July 15, 2020. The University of California Office of the President has decided to continue suspending this program until further notice. However, this is subject to change depending the UC Covid-19 Relief Program.

Read below to learn which borrowers would qualify to receive a tax offset letter.


REASONS WHY A TAX REFUND WILL BE INTERCEPTED

The borrower’s loan account becomes at risk by getting their tax refunds intercepted due to:

  • Loan account is not in a pending cancellation due to death, disability pending or bankruptcy
  • Loan account is not in a hardship deferment or hardship billing ‘interest only’ status
  • Loan account is more than 8 months past due
  • Loan account is Accelerated (defaulted)
  • Loan account is placed with a Collections Agency
  • Loan account does not have an updated contact information (mailing or email address)