Yes. Because they have probably automatically set up the refunds to be applied towards the student loan debt.
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The fact that the refund is generated from a child tax credit does not mean anything. A refund is a refund and in the instance you describe it can be used for offset.
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You should contact the loan holder and see if you can work out something with them until you get back on your feet. You may find that they can work out something that is agreeable to both of you. If you do not then they will take your refunds until your loan is paid in full.
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