The federal student loan program was devised to ensure every person who qualified to attend a higher education institution could do so through borrowing money to pay tuition, regardless of income or creditworthiness. It is common for students to borrow more than once, creating a conundrum as those multiple loans come due after graduation. If a borrower defaults on a student loan, the federal government reserves the right to withhold an income tax refund to satisfy the debt.
Gather your student loan collection letters. Calculate the total owed.
Write a budget. Use a budget writing software program or budget template to arrive at a budget that will allow you to make monthly payments to payoff your defaulted student loan.
Phone the US Treasury's Financial Management Services at 800-304-3107. Request to get on a payment plan. Inquire if the payments are made on time, your tax refund will not be withheld or "offset." Ask for a written agreement to be mailed to you stating the same.