Borrowers who made payments during the pause can receive a refund and the government will include this in the student loan waiver, the education ministry said.
President Joe Biden announced Aug. 24 that his administration will pay off up to $10,000 in state student loan debt for individuals earning less than $125,000 a year or households earning less than $250,000 . The Biden administration is also canceling an additional $10,000 for those who received federal Pell Grants to attend college.
Student loan repayments have been suspended for millions of federal student loan borrowers since March 13, 2020 due to the coronavirus pandemic. During this time, no interest accrued on federal student loans, and borrowers did not have to make any payments.
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Nevertheless, according to the US Department of Education, almost 500,000 borrowers decided against the payment pause and continued to pay their loans. Now many are wondering if they can get a refund, including people who have paid off their loans and may now owe less than they could claim for forgiveness.
A Twitter postwhich has garnered over 13,000 retweets and 38,000 likes as of Aug. 26, claims people who continued paying their student loans during the pause can apply for a refund.
Can you get a refund if you paid student loans during the payment pause?
Yes, you can get a refund if you paid federal student loans during the payment pause.
Borrowers who paid between March 13, 2020 and August 23, 2022 and now owe less than the $10,000 to $20,000 threshold should request a refund to have the full amount forgiven.
Any amount paid after August 24, 2022 that brings a borrower below the threshold will be automatically refunded without the borrower’s request.
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“Borrowers can request refunds for all federal student loan payments made since March 13, 2020. Any amount paid after August 24, 2022 that brings a borrower below the $10,000 or $20,000 threshold will be automatically refunded without the borrower requesting it. ‘ a US Department of Education spokesman told VERIFY.
The spokesman explained that reimbursed payments would increase borrowers’ loan balances. They also noted that to receive a loan cancellation under the Biden administration’s student debt forgiveness plan, “borrowers must meet all other criteria, including eligible credit and meeting income criteria.”
To request a refund, the Department of Education says you should contact your student loan administrator. A loan servicer is a company that the Department of Education engages to handle billing and other services for federal student loans on behalf of the agency.
While the Biden administration’s $10,000-$20,000 loan forgiveness plan is new, the option to receive a refund of payments made during the hiatus has been an option since spring 2020.
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“The Department of Education has temporarily suspended your Department of Education owned student loans effective March 13, 2020. That means you don’t have to make any monthly payments during this time. If you have made a payment during this time, you can request a refund through your credit service provider,” the agency explains on its website.
Aidvantage, Great Lakes Educational Loan Services, Nelnet, MOHELA, FedLoan Servicing and Ed Financial Services are the current official government student loan service providers. They all say that if you made a student loan payment during the break, you can contact them directly to request a refund.
Any borrowers who still owe student loans after the writ will likely have to start paying back their loans starting next year. The payment pause was “definitely” extended to December 31, 2022, according to the Biden administration.
The Associated Press contributed to this story.
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