01/10/2026
🚨 On January 7, the Trump admin started sending notices to student loan borrowers in default ahead of wage garnishment. Over 5M federal borrowers currently in default could see up to 15% of wages seized as pandemic-era pause ends 🚨
💥BEFORE YOU FILE YOUR TAXES💥
Important Information About Tax Refunds & Student Loans
Many people rely on their tax refund for rent, utilities, food, childcare, or catching up on bills. If you owe certain federal debts, your refund may be taken before you ever receive it. This post explains what to check before you file so there are no surprises! 😳
I mean just imagine you are expecting a $4,200 tax refund and plan to use it to catch up on rent and car repairs. You file your taxes without checking your student loan status. Your loans are in default, and your entire refund is taken to pay the loan. 😩 You still remain in default and later receive a wage garnishment notice. If you had checked first, you may have been able to enter a repayment option and protect future refunds.
Why Your Refund Could Be Taken:
✍🏽 Your federal tax refund can be intercepted if you owe:
• Federal student loans that are in default
• Back taxes owed to the IRS
Refunds are taken automatically through a federal process called a refund offset.
✍🏽 If You Have Student Loans in Default:
If you file your taxes while your student loans are in default-
• Your entire refund may be taken
• The loan does not come out of default
• Wage garnishment (up to 15%) may still follow
• Future refunds may also be taken
📌 Letting your refund be taken usually does not fix the problem.
✍🏽 If You Owe the IRS (Even on a Payment Plan):
If you owe the IRS, your refund will be applied to your balance automatically, even if you are on an approved payment plan and making payments on time. You should not rely on receiving a refund if IRS debt exists.
💡 Smart Steps Before Filing:
1. Create an IRS online account to check for tax debt and payment plans.
2. Check your student loan status at StudentAid.gov, or MyEdDebt if your loans are already in collections.
3. Resolve student loan defaults before filing, if possible (rehabilitation, consolidation, or repayment plans).
4. File only when you understand what will happen to your refund.
🧠 Bottom Line: Checking first gives you control. Filing without checking can result in losing a refund you were depending on.
