Will Student Loans Take My Tax Refund in 2026?

Yes — the government can take your tax refund if your federal student loans are in default. It happens through the Treasury Offset Program, a federal collection system that redirects your tax refund to pay off overdue student loan debt.

If you’re wondering whether it could happen in 2026, or it already did, here’s the bottom line: Offsets resumed in May 2025 after a multi-year pause, and the program is fully active again for the 2026 tax season. That means anyone still in default risks losing their refund this year—and those who already lost it still have limited ways to challenge or recover part of it.

This guide explains:

• Why your refund was taken or is at risk,

• How the Treasury Offset Program works, and

• What you can do to stop future offsets or request a refund if money has already been seized.

If your federal student loans are in default, the government can intercept your federal tax refund to collect on the debt. This process happens through the Treasury Offset Program (TOP), run by the Bureau of the Fiscal Service within the U.S. Department of the Treasury.

Here’s what to know:

• Only federal loans qualify for offset. Private student loans can’t touch your tax refund. Private lenders have to sue and collect through the courts instead.

• Default is the trigger. A federal loan goes into default after about 270 days without payment. Once that happens, your loan holder can certify the debt for collection and send it to the Treasury Offset Program.

• The IRS doesn’t decide the offset. The IRS simply processes your refund. The Treasury program intercepts it before the IRS pays you and applies the money to your defaulted balance.

• You’ll get a notice first — at least on paper. The Department of Education or its collection agency must mail a Notice of Intent to Offset at least 60 days before your refund is taken. It lists the debt amount, your right to dispute it, and how to request a hardship review.

• Offsets can repeat every year. Once your loans are in the Treasury system, each future refund is at risk until you bring the loans out of default.

Once your loan goes into default, your account doesn’t just sit there—it’s certified for collection and referred to the Treasury Offset Program (TOP). TOP is how the government takes your tax refund before it ever reaches your bank account.

Here’s how the process unfolds:

1. Default occurs. After about 270 days without payment, your federal loan is legally considered in default.

2. Your debt is sent to the Treasury. The Department of Education—or a guaranty agency for older FFEL loans—refers your debt to TOP for collection.

3. You get a “Notice of Intent to Offset.” This letter explains your balance, your rights to dispute it, and the deadline to request a hardship review or hearing. You have roughly 60 days from the notice date to respond.

4. You file your taxes. The IRS processes your return and calculates your refund as usual.

5. The Treasury checks the offset database. Before issuing your refund, the IRS cross-references your information with TOP. If you’re listed as having a defaulted student loan, your refund (or part of it) is automatically redirected.

6. The Treasury applies the funds to your debt. The intercepted amount goes toward your student loan balance, and you’ll get a post-offset notice confirming how much was taken.

If your refund is larger than your debt, you’ll get the leftover amount. If your debt exceeds the refund, you’ll lose the full refund—and offsets can continue each year until the debt is resolved.

Whether you can stop a tax refund offset depends on timing.

• If you’ve already filed your taxes, your refund is likely gone. The only ways to challenge it are to request a hardship refund or, in limited cases, file bankruptcy before the offset occurs.

• If you haven’t filed yet, you can still protect your refund by getting your loans out of default or settling the debt before the Treasury Offset Program processes your return.

Once your refund has been seized, there’s no instant way to get it back. But depending on your situation, you may qualify for one of a few narrow remedies.

• Hardship refund. You can ask the Department of Education to return part or all of your refund if losing it caused serious financial hardship—such as risking eviction, losing utilities, or being unable to meet essential expenses. You’ll need to submit documentation showing your income, bills, and dependents. These refunds are rare and handled case by case.

• Injured spouse claim. If you filed a joint tax return and your spouse’s portion of the refund was taken for your loans, they can recover their share by filing IRS Form 8379. The claim can be filed with your tax return or afterward and typically takes 8–14 weeks to process.

• Mistaken offset. If your refund was taken even though you paid off, rehabilitated, or consolidated your loan, contact the Treasury Offset Program at 800-304-3107 and your loan holder. Provide proof of payment or consolidation. The Department of Education can reverse the offset if it was certified in error.

• Bankruptcy protection. Filing for bankruptcy triggers an automatic stay, which pauses all collection activity—including Treasury offsets—while the case is pending. Bankruptcy doesn’t erase your student debt, but it can block or reverse a refund seizure made during the stay.

If You Haven’t Filed Yet

You can prevent your refund from being taken next season by resolving your default before the IRS issues your refund. You have two main paths:

1. Get Out of Default. You can do this by rehabilitating, consolidating, or paying your loans in full. Once your loan is out of default, your name is removed from the Treasury Offset Program list.

2. Settle the Debt. Federal settlements are rare and usually require a lump-sum payment, but once paid, your loans are no longer eligible for offset.

Note: The Treasury Offset Program matches tax data every spring. If you want to keep your refund next year, act before filing—rehabilitation or consolidation can remove your name from the offset list in time.

Once your refund is seized, it can happen every year you stay in default. The only way to stop it for good is to get your loans out of default.

You have two ways to do that:

• Loan Rehabilitation — make nine on-time payments based on your income, and the default mark is erased.

• Direct Consolidation — combine your loans into one new loan under an income-driven plan. It’s faster, but the default mark stays on your credit.

Either option removes you from the Treasury Offset Program list before the next tax season, restoring your eligibility for refunds and repayment benefits.

Related: How to Get Student Loans Out of Default