Student-loan borrowers get extra time before tax refunds can be seized.

The Department of Education announced a temporary pause on wage garnishment and the Treasury Offset Program to give defaulted student-loan borrowers more time to arrange repayment before filing taxes. The pause was announced on January 16.

The Department of Education announced on January 16 that it is temporarily pausing wage garnishment and the Treasury Offset Program, which can seize federal tax refunds from borrowers in default. The pause is intended to give borrowers in default more time to work on repayment options before filing their taxes. Collections on defaulted federal student loans had resumed in May 2025 after a five-year pause, restoring consequences such as garnishment and refund seizures for borrowers in default. Advocacy groups had warned borrowers to check their default status before filing taxes because refunds can be seized once filing is underway. Key facts: - The Department of Education announced a temporary pause on wage garnishment and the Treasury Offset Program on Jan. 16. - The pause covers actions that can seize federal tax refunds from borrowers reported as in default. - The article reports that more than 5 million borrowers are in default. - Options discussed for returning to good standing include loan rehabilitation, loan consolidation, and potential cancellation programs for specific eligibility. Summary: The pause gives defaulted borrowers additional time to arrange repayment before filing taxes, which reduces the immediate risk that refunds would be seized. Undetermined at this time.