Can my tax refund be applied to my student loans?

_{student loans, tax refund, British Columbia}

If you’re behind on student loan payments in Canada, expect the CRA to use your tax refund to pay off both federal and provincial debts. But here’s the good news: if your loans are in good standing, your refund is all yours. Keep your student loans on track to enjoy your tax refund fully.

_{Tax refund at risk if you owe on student loans in Canada.}

Question

Will my tax refund go towards my student loan? I want to find out if I can keep my tax refund or if it will be applied to my outstanding student loans.

From: Anonymous Question, British Columbia (BC)

Debt Insiders Answer

In Canada, if you owe money on student loans, your tax refund might not be yours for long. The Canada Revenue Agency (CRA) can swoop in and use your tax refund to pay off any outstanding student loan debt — both federal and provincial — especially if you’re behind on payments. But here’s the silver lining: if you’ve kept your loans in good standing, you should get to keep that refund all to yourself, without it being redirected towards your debt.

From: Insider Scott

Office of the Superintendent of Bankrupty (OSB) Answer

Your tax refund may be applied to your outstanding student loans under the Government of Canada’s authority. Specifically, the Income Tax Act allows for the collection of debts owed to the federal government, including student loans, through the application of tax refunds. This is outlined in the Financial Administration Act, which permits the offset of tax refunds against debts. Therefore, it is likely that your tax refund will go towards your student loan balance if you have an outstanding amount. You should review the relevant provisions in the Income Tax Act and consult with the Canada Revenue Agency for specific scenarios related to your situation.

From: This answer is provided by scanning the OSB Bankruptcy & Insolvency Act and related directives

Related Questions

Here are the top 5 most frequently asked questions related to the concern of whether a tax refund will go towards a student loan, based on common online searches and current trends:

1. Will my tax refund go towards my student loan if I am in default?

• No, it will only go towards your student loan if you are in default and have missed several payments.

2. How can I prevent my tax refund from being used to pay my student loan?

• You can prevent this by staying current with your student loan payments and avoiding default.

3. Can the government take my tax refund to pay off my student loan?

• Yes, the government can take your tax refund to pay off your student loan if you are in default.

4. What happens if I owe student loan debt but am not in default; will I still lose my tax refund?

• No, simply owing money on student loans will not automatically prevent you from receiving a tax refund unless you are in default.

5. Can I dispute if my tax refund is used to pay my student loan?

• Yes, you can dispute it if you think it is unfair and contact your student loan service provider or the relevant government agency to begin the appeal process.
  
  

References

_{Table of article references}