What is the purpose of the Treasury offset?
The purpose of a Treasury offset is to recover the amounts for the Federal taxpayers without the cost of litigation fees. It was created to basically recover the unpaid debts arising from federally supported activities, which include student financial assistance. Since 1986 the Department of Education has referred millions of defaulted student loan debts and grant claims to the Department of Treasury for collection by offsetting against federal and/or state income tax refunds and any other payments authorized by law. The Department of Ed can request that Department of Treasury to arrange an offset to collect any Federal defaulted student loan debt or grant claim. Once the Department of Education refers a delinquent borrower to the treasury department, these group of debtors are considered to be certified permanently as long as the account is in an active defaulted status (outstanding). Mr. Kay’s Notes: Certified permanently means your tax return will continuously be seized until your a
