Student loan borrowers in default now able to keep tax refunds

Core Points - The U.S. Department of Education has announced a delay in implementing involuntary collections on federal student loans, including wage garnishment and the Treasury Offset Program [1][5] - This temporary delay aims to alleviate concerns for borrowers regarding the potential loss of tax refunds as the 2026 tax season approaches [2][3] - Advocacy groups have pressured the Education Department for this delay, citing the risk of an "unprecedented default crisis" and the economic impact on nearly 9 million defaulted borrowers [4][6] Impact on Borrowers - The announcement is seen as a relief for working and middle-class families who are struggling with outdated student loan policies that do not reflect current living costs [7] - Current protections allow only $217.50 per week in wages to be exempt from garnishment, a figure that has not been updated since 2009 [8]