Garnishment of Tax Refund - Student Loan Default

If you’ve received notification that your federal student loan is in default, there’s a good chance the lender may move to garnish your tax refund. You will receive an offset notice before this occurs.

The lender must go through the Treasury Offset Program, or TOP, to garnish your tax refund. Garnish means that part or all of the tax refund owed to you is used to pay toward your debt. TOP will review the request and divert funds from your tax refund to pay your student loan creditor.

If an offset has already occurred and your tax refund has been seized, you may have a few options for getting the refund back.

Spouses who have had their refunds claimed because of their partner’s debts may be able to file an injured spouse claim by filing Form 8379.

If you were in default but you simply can’t afford not to receive your tax return because of financial hardship, you can apply for a hardship refund. Ask your lender for a student loan tax offset hardship refund form or call the Treasury Offset Program at 800-304-3107 to begin this process.