Does the Department of Education have to wait until you have been at a new job for 12 months before garnishing your wages?

Answer 1

I think what you're asking is, can your federal refund be offset if the Dept. of Education is currently garnishing your wages?

The answer is: yes. If you have defaulted student loans and you have not set up a payment arrangement, the Dept. of Treasury will certainly offset (e.g. take) your federal refund. Your state refund is still generally safe, although it depends on your own state's tax laws.

The easiest way to avoid this is to call the Dept. of Education and set up a repayment/rehabilitation plan. They generally offer very low monthly payment plans (anywhere from 20$-50$ a month depending on the amount owed) and so long as you stick to the payment plan, your wages will not be garnished and your refunds will not be offset.

If you have already filed your taxes before making a payment arrangement, then it is too late. Your refund will almost definitely be offset. However, if you have yet to file, call the Dept. of Education, make a payment arrangement, and then wait 60 days to file your taxes. If you make two full, on-time payments toward your defaulted loan during those 60 days, you will still be eligible to receive your refund in full.