LOS ANGELES (PRWEB) June 13, 2019
Several U.S. Senators have proposed a new bill that would eliminate the "hidden" student loan taxes. U.S. Senators Rick Scott (R-FL), Mike Braun (R-IN), Kyrsten Sinema (D-AZ), and Chris Coons (D-DE) recently introduced the Student Loan Tax Elimination Act of 2019. The act proposes to eliminate the origination fee on federal student loans starting July 1, 2019. By enacting the bill, the senators believe that borrowers will save more money on their student loans and reduce the total amount of student loan debt.
Senator Scott said in a quote published by a Forbes article dated June 11, 2019 ("Senators: Let's Eliminate This 'Hidden' Student Loan Tax"), "Our students deserve every opportunity to graduate college and pursue successful careers without mountains of debt."
Senator Braun continued that "student loan origination fees are nothing more than a hidden tax that burdens students."
What is a student loan origination fee?
While it may be confusing, loan providers do not take out student loan origination fees when a student applies for a loan for college. Instead, they apply the charge when the student receives the money during the loan disbursement. The student loan origination fee is the cost of the bank loaning the student the money. Typically, the tax amounts to a small percentage of the entire school loan amount.
How do student loan origination fees impact college budgets?
Platinum Tax Defenders urges borrowers to note the loan origination fee when taking out a student loan. The price is applied to the balance requested and deducted from those funds. What that means is that the student will receive less than they selected when applying for the loan. To ensure that the student has enough funds to cover their costs, they should take the origination fee into account when requesting a loan amount.
Does a student loan origination fee affect repayment?
Borrowing more to cover the origination fee could indeed affect a student's repayment amount. The price will add to the initial balance of the loan and therefore result in higher interest throughout repayment. In other words, when students repay their student loans, they must repay the total amount borrowed, including the origination fee. For that reason, the U.S. Senators have called the origination fee a "hidden" student loan tax.
How can student loan debt affect tax debt?
For students who become unable to pay back their student loan debt, there are consequences from the government. Many graduate colleges and begin working, but aren't yet making enough money to cover bills, let alone student debt bills. Some graduates may be looking forward to a tax refund to cover part of their student loan debt. However, if a student loan goes into default, it's important to note that the tax refund could be garnished. When students default on their loans, their wages can be garnished, which means the Department of Education can take money directly from their paycheck. The DEC can also work with the IRS to use the student's tax refund to repay any defaulted student loans, which is called a "tax refund offset."
However, for students who have ended up in a tax refund offset situation, there are options. Loan borrowers can request an offset refund whether their tax refund has been taken from them or not. Also, there isn't a time limit on making the request. However, it's essential to move as quickly as possible.
If you've defaulted on your student loan debt and are afraid that you may not receive your tax refund, contact Platinum Tax Defenders today.
About Platinum Tax Defenders
Top Tax Defenders, a subsidiary of Cardiff Lexington Corporation, (Cardiff Lexington Corp (CDIX) ) has been helping individuals navigate their tax situations with the IRS since 2011. The top-rated tax firm's tax resolution service s have saved thousands of businesses hundreds of thousands of dollars in tax debt. The expert team at Platinum Tax Defenders has experience working with entrepreneurs, individuals, and small businesses alike. Platinum Tax Defenders (http://www.platinumtaxdefenders.com) is a forward-thinking leader in the tax resolution industry. The expert tax relief team and Los Angeles tax attorneys works with taxpayers who are struggling with small to large tax debts. Platinum Tax Defenders offers a wide variety of tax resolution, bookkeeping, and tax preparation services for individuals and businesses.
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