Best answer
Even though you cannot withhold stimulus funds from unpaid child support or student loans, theIRS will accept Recovery Rebate Credit funds, as CNET points out. What If You Can鈥橳 Cash A Stimulus Check? The federal stimulus checks can be cashed at your local credit union or bank.
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Will a stimulus check affect your student loan payments?
If a borrower were to receive a $1,200 stimulus check, that would make a significant dent in their debt. Borrowers who are financially secure can make payments regardless of a stimulus, of course. If student borrowers can afford to make student loan payments, now is a good time to do so.
Can collection agencies seize stimulus checks for defaulted student loans?
The recovery rebate can be reduced to repay unpaid child support, but not defaulted federal student loans. This suspension applies to all private collection agencies under contract to the U.S. Department of Education. But, private collection agencies can seize stimulus checks to repay defaulted private student loans and other debts.
Should you use stimulus money to pay down student debt?
Most advise against paying down debt and recommend either spending the check or saving the money if your financial situation seems uncertain. But those with student debt (and little other consumer debt) should consider using stimulus money to pay down loans.
Is there still time to take advantage of the stimulus check?
But this benefit is expiring soon. Unless Congress includes more student loan relief, payments and interest will begin again in October. If stimulus checks come in August or September, there will still be time to take advantage of this benefit. Follow me on Twitter and connect with me on LinkedIn.