Millions of Americans with defaulted federal student loans could lose their tax refunds in 2026, as the government resumes aggressive collection efforts, according to recent announcements from the IRS and the U.S. Department of Education.
The 2026 tax filing season opens on January 26, but it will be the first full tax season since the federal government restarted Treasury Offset collections, a program that allows agencies to seize federal tax refunds to recover unpaid debts.
Borrowers who have defaulted on federal student loans are especially at risk. The Education Department has already begun referring borrowers to the Treasury Offset Program, which can intercept tax refunds, Social Security benefits, and even federal wages.
More than five million student loan borrowers were in default by the end of 2025, with millions more seriously delinquent and at risk of defaulting soon, according to federal data.
The Education Department is required to send borrowers one written notice before referring them for Treasury Offset. That notice gives borrowers 65 days to respond or object, but it is only sent once and to the last known address, meaning many borrowers may never see it.
Once a borrower is placed in the Treasury Offset Program, no annual warning is required. The government can simply take the tax refund and apply it to the outstanding student loan balance.
Borrowers can check whether their refund is at risk by calling the Treasury Offset Program hotline at 1-800-304-3107 or by logging into StudentAid.gov to see if their loans are marked as defaulted.
Experts say borrowers who act early may still protect their refunds by rehabilitating their loans, consolidating them, entering repayment plans, or qualifying for discharge or forgiveness, but action must be taken before filing taxes.
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