Millions of Borrowers May Be Eligible For a Refund On Student Loan Payments Made During the Pandemic

There's good news for the millions of people with federal student loans who've made payments on that debt during the Covid pandemic: many of them will be eligible to get the money back. CNBC reports: The U.S. Department of Education says that many borrowers eligible for President Joe Biden's student loan forgiveness plan who made payments on their debt during the pandemic-era pause on the bills will automatically be refunded. The relief policy has been in effect since March 2020, and is scheduled to end Dec. 31. More than 9 million people made at least one payment on their federal student debt between April 2020 and March 2022, according to the government. The vast majority of borrowers haven't made any payments, taking advantage of the suspension of the bills and accrual of interest.

Payments made since March 2020 on federal student loans eligible for the pause should now be refundable, said higher education expert Mark Kantrowitz. The roughly 5 million student loan borrowers who have commercially held Federal Family Education Loans (FFEL) weren't eligible for the payment pause and won't be for the refund either. Any payments made before the pandemic also don't qualify, Kantrowitz said.

Not all borrowers need to apply for the refund, said Elaine Rubin, senior contributor and communications specialist at Edvisors. The refunding process will be automatic for borrowers who are eligible for student loan forgiveness and for those who made voluntary payments during the pause that brought their balance below the maximum forgiveness amount: either $10,000 or $20,000, Rubin said. 'They will be offered an automatic refund for the difference,' Rubin said. If you paid your loan in full during the pandemic, however, you'll have to take action and request the payments back. Borrowers who have refinanced their federal loans will also need to ask their student loan servicer for the refund, Kantrowitz said.

Read more of this story at Slashdot.