How to get refunds if you made student loan payments during covid-19
As payments were paused during the pandemic it was not neccessary to pay anything towards your student debt including some automatic refunds.
Those students who continued to pay their student debt during the pandemic could be facing some good news as that money could be heading straight back into their pockets.
In an announcement related to the extension, the Education Department explained a refund option available to students.
“You can get a refund for any payment (including auto-debit payments) you make during the payment pause (beginning March 13, 2020)” on qualifying loans, according to the release. This gives students to ability to claim back money they spent on their student loan during the pandemic.
Keep in mind that any refund will still need to be paid off in future; this isn’t another form of cancellation. However, these measures will apply to very few people. According to data from the Department of Education only 1.2 percent of borrowers continued to pay back their student loan during the pandemic.
The White House has long been grappling with a plan to deal with the heaving $1.7 trillion student debt. It was recently announced that $10,000 of student debt per person would be written off by the government. For those receiving Pell Grants this figure is $20,000. The non-payment window has been extended until the end of this year. It will be the last such extension.
How can the refund be claimed?
For people who are eligible for debt forgiveness nothing needs to be done. The refund will be automatically calcualted and sent.
For those not having their debt automatically adjusted, students will need to call their loan servicer. This includes people who paid off their student debt during the pandemic as well as people who refinanced their debt.
“Borrowers have always been able to request payments made during the Covid freeze to be refunded assuming their loans were eligible for the freeze in the first place, which most federal loans are,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.