Will student loans take my tax refund?

By Victoria Holliday | Published on October 21, 2025

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It’s tax season, and for many recent graduates this is the first time they will have to navigate taxes while also paying back their federal student loans. Wondering how your tax refund might impact your student loan payments and if your tax return will go toward your student loans? Let’s break it down.

Will Your Tax Return Go Toward Your Student Loan Debt

If you are actively paying your student loans, your tax refund should not be affected. It’s possible to still receive a tax refund even if you have outstanding student loan debt. Just owing money on your student loans does not prevent you from getting a refund. However, whether or not you qualify for a refund depends on your unique circumstances.

Can Your Refund Be Garnished For Student Loans

Since the payment pause ended in September 2023, nearly 9 million federal student loan borrowers have not made a payment. While these missed payments will have negative financial impacts for borrowers in the long-term, for now, it won’t affect their taxes.

If you are in default on your federal student loans, then the government can take money from tax refund to help cover your debt. This is known as a tax refund seizure.

Under the Biden administration’s Fresh Start program the White House announced that borrowers who had any missed, partial, or late payments from Oct. 1, 2023 to Sept. 30, 2024, would not be considered delinquent or in default. So, if you are currently unable to pay back your federal student loans, it will not impact your ability to receive your tax refund just yet. The best way to stop student loan providers from taking your tax refund is to avoid delinquency and default.

If you have more than 270 days of past-due payments then you are considered in default on your federal student loans. However, most lenders will report you as delinquent after just 90 days of past-due bills. Tax refund garnishment does not apply to private student loans. If you are worried about your tax refund being garnished, the best way to prevent that from happening is to address the default before you file your taxes.

If you are married and file your taxes jointly there are ways you can protect your spouse’s portion of the federal tax refund from being garnished. To do so you’ll need to submit an injured spouse form (IRS Form 8379).

How To Avoid Defaulting On Student Loans

Being in default also negatively impacts your credit score and costs you extra money over the lifetime of your loan. If you’re struggling with student loan payments, refinancing might be an option for you. You can run a quick rate check in minutes to see what rates you qualify for. Other options to help you avoid default include: income-driven repayment plans, consolidation, and forbearance.

You Can Claim Student Loans On Your Taxes

If you’ve been paying back your student loans then you qualify for a federal tax deduction of up to $2,500. In order to qualify, make sure you receive a 1098-E, or a student loan interest statement, from your lender and include it in your tax filing.

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About the Author

Victoria Holliday

Victoria is the Head of Content at Earnest. She brings extensive ed-tech expertise from six years at Chegg, where she developed educational resources reaching over 20 million students nationwide.

With a Master’s in Political Science and experience in public policy from several California campaigns, she’s passionate about creating accessible content that enhances student outcomes in the dynamic world of higher education.