The Department of Education is authorized to seize up to 10 percent of disposable earnings to repay defaulted federal student loans. For private loans, up to 25 percent of disposable income may be garnished. If your tax return is garnished, your lender will send you a notice that a claim has been filed against you.The notice includes: 1  Your defaulted loan amount. 2  Your rights as a student loan borrower. 3  How you can avoid tax offset.f your tax return is garnished, your lender will send you a notice that a claim has been filed against you. The notice includes: 1  Your defaulted loan amount. 2  Your rights as a student loan borrower. 3  How you can avoid tax offset.