Turns Out Student Loans Aren’t ALL Bad

I have a story about Karmic justice for a coworker of mine, even though it was somewhat temporary. About seven years ago, [Coworker] was in her third year of college, using grants and student loans. She ended up having a complicated pregnancy and had to withdraw mid-semester. Since then, she has not gone back to college. Since she withdrew and did not complete her degree, she not only has to pay back the loans but the grants, as well.

[Coworker] says she wasn’t able to put her loans and grants into deferment because of this. She says she tries to pay back what she can when she can, but she is overdue to the tune of $10,000. But with a part-time retail job, it is slow going.

Last year, [Coworker] moved to a new house, and while she updated her address with our place of employment, for some reason, her W2s were sent to her old address. She was able to get a copy of her W2s, and she and her husband filed. They file jointly but with an “injured spouse.” This is not a physically injured spouse, but a financially injured spouse; basically, it means that the government can only take [Coworker]’s part of the tax return to pay for her student loans. It leaves her husband’s part of the tax return alone.

[Coworker]’s share of the tax return is usually about $1,000, and his share is about $4,000; he is a full-time worker. Well, a few weeks after they filed, they got a notice back from the IRS saying that her W2 had already been filed!

Yep, whoever now lived in [Coworker]’s old place got her W2 and decided to not only file it but file it jointly, hoping to steal my coworker’s tax return. Of course, they didn’t know about her loans, so they did not file with an “injured spouse.” As a result, not only did they not get a single dime, but the tax return went to pay my coworker’s over-due student loan to the tune of $6,000!

Now that’s poetic justice!

I wish I could have been there when the nasty fraudsters found out they weren’t getting back anything. What were they going to do? Admit they committed tax fraud to the IRS?

[Coworker] and I laughed ourselves silly before she admitted that, yes, she did get things sorted out properly in the end. As tempted as she was to let the fraudsters wallow in their own Karmic bed, she knew that not sorting it out on her end would get her in trouble, too. Still, the idea that tax fraudsters tried to steal and instead found themselves paying off someone else’s debt is a story that gives her the warm fuzzies.

And I’m sure the IRS has some pointed questions for the fraudsters, too!