You are in default, you are about to file taxes, and every article you open gives a different answer about whether the government will take your refund.
Short answer: As of the latest sources we could reach, offsets are paused, not ended. The Education Department delayed involuntary collections on federal student loans, including the Treasury Offset Program, on January 16, 2026, calls the delay temporary and has published no end date. A loan in default stays in default while the pause lasts. Check studentaid.gov before you file. Free help: NFCC, 877-360-6322.
The timeline, in order
| When | What happened |
|---|---|
| May 2025 | Collections on defaulted federal loans resumed after the pandemic pause. The Department said Treasury Offset could begin as early as June 2025 and said it would direct employers to withhold up to 15% of disposable pay (EPI). |
| December 2025 | The Department said wage garnishment would begin in the first week of January 2026, with Treasury Offset also planned (EPI, as above). |
| January 16, 2026 | The Department announced the delay of involuntary collections, naming wage garnishment and the Treasury Offset Program (Education Department). |
| July 1, 2026 | New income-driven repayment plan available, and a second chance at rehabilitation (Education Department). |
| June to September 2026 | Commentary says the pause still applies and no restart date has been announced (NATP; Tate Law). |
Why the articles disagree
They are describing different dates. An article written in mid-2025 says offsets were coming. One written in January 2026 says they were delayed. A third written months later says nothing has restarted. All can be true at once. The only date that matters to you is the day your return is processed, and nobody outside the government can promise that.
If you are expecting a refund
- Do not spend it before it arrives if your loan is in default. The pause can end whenever the Department decides, per one law firm’s reading.
- Contact your defaulted loan servicer about your options. The Department points borrowers to rehabilitation, consolidation or a repayment agreement (Education Department).
- Keep a record of what you were told, with dates.
- If a refund is offset, ask what notice was sent to you and for a written breakdown.
For the effect of late payments on renting, see our student loan delinquency and renting guide.
The things you’re probably wondering
Are tax refund offsets happening right now?
The Department of Education delayed involuntary collections on federal student loans, including the Treasury Offset Program, and called the delay temporary without giving an end date (Education Department). A tax professionals’ group wrote in June 2026 that with no further developments the pause still applied (NATP), and a law firm page updated September 5, 2026 said no restart had been announced (Tate Law). We could not find a newer announcement, so check studentaid.gov before you file.
Does the pause mean my loan is forgiven?
No. NATP’s warning to tax preparers is that a loan in default stays in default and collections can resume once the pause ends (NATP). The Education Department says defaults are reported to credit reporting agencies and may hurt credit reports (Education Department).
Why do some articles say collections restarted in 2025?
Because they did restart on defaulted loans in May 2025, after a pandemic pause, and the Department said Treasury Offset could begin as early as June 2025 (EPI). In December 2025 it said wage garnishment would start in January 2026, then on January 16, 2026 it announced the delay. Those are different stages of one timeline.
When is collection expected to restart?
No date has been published by the Department. The College Investor reported in May 2026 that wage garnishment was planned to resume ‘this fall’, that no specific date had been given, and that it did not say Treasury Offset would restart on the same timeline (The College Investor). Treat that as a signal, not a schedule.
What changed on July 1, 2026?
The Education Department says a new income-driven repayment plan became available on July 1, 2026, that it waives unpaid interest for borrowers who make on-time payments that do not fully cover accrued interest, and that borrowers get a second chance to rehabilitate a defaulted loan (Education Department). Check studentaid.gov for the plan terms that apply to your loans.
What can I do while offsets are paused?
The Department says to explore options for resolving defaulted loans with your servicer, including starting rehabilitation after consolidating or completing a repayment or rehabilitation agreement (Education Department). The College Investor describes rehabilitation as nine on-time, income-based payments that remove the default mark, and consolidation as requiring enrollment in an income-driven plan with the default remaining on the report (The College Investor).
Does this apply to private student loans?
The Department’s release covers federal student loans. Private loans follow different rules, and we cover them in our private student loan collections guide.
Where can I get free help?
The National Foundation for Credit Counseling offers free or low-cost nonprofit counseling at nfcc.org or 877-360-6322. Our AI debt payoff planner can map a payoff order once you know what you owe.
Disclaimer: DebtShift is an educational platform operated by H Ali Logistics Ltd. This article is general education, not legal or financial advice. For free, nonprofit credit counseling, contact the National Foundation for Credit Counseling (NFCC) at nfcc.org or 877-360-6322.
Sources
- U.S. Department of Education, Delays Involuntary Collections (page reviewed Jan 16, 2026)
- Economic Policy Institute, Department of Education resumes student loan collections on defaulted loans
- NATP, Update on the DOE’s student loan involuntary collections pause (Jun 24, 2026)
- The College Investor, Wage garnishment restarts this fall (May 28, 2026)
- Tate Law, Treasury taking over default collections (updated Sep 5, 2026)
- National Foundation for Credit Counseling
Last reviewed October 2026
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