Student Loan Default_s Will Not Seize Tax Refunds in 2026
Borrowers in default on federal student loans will not have their 2026 tax refunds seized. The Department of Education announced in January 2026 that it paused enforcement mechanisms for student loan debt collection, including Administrative Wage Garnishment (AWG) and the Treasury Offset Program (TOP). TOP is the program that allows the federal government to seize tax refunds to satisfy debt. The pause was implemented to allow the Department of Education to implement the Working Families Tax Cuts Act. This act introduces two new repayment plans: a tiered Standard Repayment Plan and the Repayment Assistance Plan, which will be the only two options available to borrowers starting in July 2026.
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