In general, filing separately costs you taxes. Any which way you shape it, your wife's portion of the refund might be taken. However, if you file a joint return, you might have a much larger combined refund than on separate returns. Her portion of the combined refund may be larger as well, which will help her pay down the debt faster.
First, compare separate vs joint so you know what the savings are. Take your time with this.
You can "protect" your portion of the joint return from her separate liability, providing that you are not also considered to be liable for this loan. Do you live in a Community Property State like CA, WA, LA, or TX? That could impact this issue.
If not, or if you have already researched to your satisfaction, file an Injured Spouse form.
In Turbo Tax: Federal Taxes- Other Tax Situations- Miscellaneous Forms- Report an Injured or Innocent Spouse claim.
The first few questions are about Innocent Spouse. Skip those until you get to the screen "Let's see if you Qualify for Injured Spouse Relief". You are asked a serious of questions, and you should have your W2s and other tax docs handy. Your "share" of the refund is not necessarily going to be the entire thing, but you are likely to receive something if you worked during the year and/or made tax payments.
This form does not need to be filed with the tax return, but you are wise to be proactive if you are certain that the refund will otherwise be offset. If you file without it, you could be adding weeks (or months) to the process.
You may have to paper file your return, but ultimately its recommended that you take all the steps now.
https://www.irs.gov/uac/seven-facts-about-injured-spouse-relief
