You weren’t wrong if it seemed like responsible adulting to plug away at student loan payments during the nearly three-year pause. After all, paying down the balance on a loan while interest is frozen is usually a good thing.
But for some borrowers who paid while politicians debated student loan forgiveness, that bet against the White House may not pay off.
For others, their payments may be refunded.
The Biden administration announced in August that it would forgive $10,000 of student debt per borrower on federal loans and $20,000 per borrower for Pell Grant recipients.
The US Department of Education also announced that forbearance — which paused interest and payments on federal student loans since March 2020 — is extended through Dec. 31, 2022.
While millions struggling with student debt rejoiced, many borrowers who paid all along were confused and dismayed. Those who paid off loans or have a few thousand dollars left had needlessly reduced a balance that would have fallen under forgiveness now.
However, some of these borrowers are eligible for a refund on payments made since March 2020.
Here’s how to tell if your student loans are eligible for a refund. And some things to consider before you rush to maximize student loan forgiveness and put cash back in your pocket.
Can You Get a Refund on Student Loan Payments Made During the Pause?
Nearly 40 million borrowers whose direct federal loans are part of the US Department of Education administrative forbearance are eligible for a refund of any payments they made since March 2020.
However, only a tiny percentage of these borrowers opted to continue making payments during the pause. This refund was always available to borrowers but takes on new meaning now that student loan forgiveness has been announced.
Borrowers can contact their loan servicer to determine their eligibility for a refund. This process is not automatic. It is the borrower’s responsibility to request a…