Interest on the SAVE plan resumed August 2025. While payments under SAVE may still be paused, your balance will grow—and with the “Big Beautiful Bill” now passed, SAVE is being eliminated. You’ll likely need to switch plans soon. Collections have also resumed on defaulted loans. Register for a webinar to learn more.

Home » Resources for Borrowers » Facing Student Loan Default? Your Next Tax Refund—and More—Could Be Taken

Facing Student Loan Default? Your Next Tax Refund—and More—Could Be Taken

Student loan repayment resumed in 2024, but millions haven’t acted. If you’re one of them, time is running out to protect your 2025 tax refund and avoid other aggressive collections.

Know the facts:

Default starts fast: Miss one payment and you’re delinquent. After 9 months, you’re in default.
Credit takes a hit: Default can drop your score by 200+ points, affecting housing, jobs, and more.
Collections are back: The government can seize tax refunds, garnish wages, and reduce benefits—without court action.
No blanket forgiveness: Broad cancellation didn’t happen.
An IDR Plan can keep you out of default: Stay in good standing with an Income-Driven Repayment Plan (as low as $0/mo) and earn forgiveness credit.

Act by January 2026 to protect your tax refund, avoid deeper financial harm, and get on track for forgiveness.

New Yorkers: Free, personalized help is available. Call our helpline at 888-614-5004 for urgent support.

Take These 4 Steps Now:

Step 1: Check your Federal Student Aid account

Whether your loans are in default and who’s managing them.
Who your loan servicer is.
Your current balance, interest rate, and repayment status.

In Default?

Learn how to get out of default and pick the best approach to avoid collections.

Step 2: Create an account with your loan servicer

Visit your servicer’s website and:

Register or log in to your account.
View your payment schedule, past due notices, and other correspondence in your inbox.
Set up or update your payment method.