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Question about student loan offset and refund

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What is the name of your state? NY

My family has been hit by one thing after another this past year. My student loans defaulted and I called a couple of days past the expiration date to work out a payment arrangement. Yes it was my fault. I put the wrong date in my calendar. I was told I'd receive a letter about my options and that it was now off their desk. I waited and waited to no avail only to find out that the loans defaulted about 2 weeks later and were sent back to the lender a MONTH later AND now they are offsetting my husband and my tax refund. I was told I could have my husband file for an injured spouse only to find out we don't qualify because we didn't have a refund credit. What options do we have for a refund? I'm a wreck.​
I saw there's a hardship option but it looks like you have to have specific things for that to work aside from we are just struggling horribly and were counting on our refund to lessen our load some.​

Taxing Matters

Overtaxed Member
A private lender cannot attach your federal tax refund. The Department of Education, however, may indeed offset your federal tax refund to pay a defaulted student loan. Of course, there must actually be a refund on your return for the offset to get anything. If there is a refund then an injured spouse allocation may get part of the refund issued to your husband. How much, if any, that he gets depends on a computation of how much of the refund is attributable to him. Did your husband actually submit the Form 8379 to try to get the injured spouse allocation? If so and your husband got nothing from the refund, what exactly did the IRS say was the reason?

Apart from that the IRS cannot help you with a refund offset problem — you have to deal with the Education Department to resolve the default issue. What options you have depends on your situation and what kind of loan you have.

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