Yes, If your federal student loans are in default, the Department of Education can refer your account to the Department of Treasury for collection by an offset of your federal (and in some cases state) tax returns. The Department of Treasury can withhold the entire amount of your refund to satisfy the debt that is owed.
Generally, if you have defaulted student loans that have been assigned to a collections agency, your taxes will likely be withheld by the IRS to pay off a portion of your debt.
If you believe your taxes will be offset due to a delinquent debt, your best option is to get your student loans out of default by setting up a payment plan. If you and your lender can agree on a reasonable and affordable payment plan, you can start to make payments under this pal to get your loans back into good standing. This will probably not prevent your refund from being taken this year however it could prevent your refund from being taken in the years to follow if you stay current in the repayment plan.
