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Student Loan Payment Refund: Who’s Eligible & How To Get It

Many smart borrowers have continued to make student loan payments during the pandemic payment pause. According to a recent report from the Office of Federal Student Aid, 9.1 million borrowers made at least one voluntary payment between April 2020 and March 2022. An estimated 1.9 million have entirely paid off their loans. Now that President Biden is moving forward with his debt cancelation plan, however, many may be wondering if they made the right choice. Thankfully, there may be a way for many to not only get their student loan debt forgiven, but also receive a refund for payments made during the pandemic.

Who Can Request a Student Loan Payment Refund?

If you made student loan payments after March 13, 2020, you may be eligible for a refund.

Payments Eligible For a Refund

  • Payments made to a federally held student loan during the payment pause, including those to a Direct Consolidation Loan, are eligible for a refund.
  • Federal Family Education Loan Program (FFELP) Loans held by the Department of Education (ED) qualify, as well.
  • Perkins Loans held by the ED are also eligible.
  • Payments made to defaulted FFELP (commercially held) and HEAL Loans qualify, too.

Ineligible Student Loan Payments

  • Payments made to private student loans and commercially held Perkins Loans do not qualify.
  • Payments made to commercially held, non-defaulted FFELP loans are also ineligible.
  • If you consolidated during the payment pause, some of your payments won’t be eligible for a refund. Any payments made between March 13 (2020) and your consolidation date cannot be refunded.  
  • Federal student loans paid in full before March 13 (2020) are also ineligible for a student loan payment refund.

If you’re not sure which type of student loan you have, you can log into your student aid account at studentaid.gov. Click on the “My Loan Servicers” section to view your loans. You can also contact the Office of Federal Student Aid by calling 1-800-433-3243.

How to Apply For a Student Loan Payment Refund

The Department of Education announced that many borrowers will automatically have their pandemic payments refunded, but there are situations where a borrower will need to request a refund by calling their lender before December 31, 2022.

Automatic Refunds

Those with balances below the allowable cancelation limit will likely have the difference automatically returned. For example, if you have a current balance of $6,500 and made $3,500 in payments during the pandemic, that money will be refunded if you qualify for loan cancelation.

Those Who Need to Apply

If you paid your loans in full during the payment pause, or your balance exceeds the allowable limit ($10,000 for federal loans or $20,000 for Pell Grants), you’ll need to call your loan servicer to request a refund of your payments.

  • FedLoan Servicing, 800-699-2908
  • Nelnet, 888-486-4722
  • Edfinancial, 855-337-6884
  • Great Lakes, 800-236-4300
  • MOHELA, 888-866-4352
  • Aidvantage, 800-722-1300
  • OSLA Servicing, 86-264-9762
  • ECSI, 866-313-3797
  • Default Resolution Group, 800-621-3115

Before contacting your provider, determine the amount you want to be refunded and have your account number (or Social Security number) on hand. Be patient, as wait times may be busier as we near the deadline for requesting a refund.

How Much Will Be Refunded?

It’s important to note that you can have some or all of your pandemic payments refunded, regardless of your current loan balance. Whether you should, is a personal decision. Just remember that any amount refunded will be applied back to your loan balance.

For example, if you’re eligible to have up to $20,000 in Pell Grants forgiven and you made $15,000 in payments during the pause, request a refund from your servicer. Once the refund amount is added back to your account balance, you can proceed with the cancelation application. The $15,000 will be forgiven and you’ll have $15,000 in your bank account to do with what you like.

If your current loan balance is $18,000 and you’re only eligible for $10,000 under the cancelation plan, it may not make sense to request a refund. Yes, your balance will drop to $8,000, but any refund amount will be added back to that balance. On the other hand, if you’re struggling financially, you could use the refund to give you some breathing room.

Timeline For Refund Payments

If you plan to apply for student loan cancelation, be sure to submit your student loan payment refund request first. The last day to make a request is December 31, 2022. According to the ED, you should receive your refund check within six to twelve weeks.

Currently, several states are suing the Biden administration in an attempt to block the debt cancelation plan. Given the uncertainty of the situation, we recommend not spending your refund until your student loan debt is forgiven. Should the plan fail, you can simply re-apply your refund to your student loan balance, if desired.

Stay Updated!

For updates regarding student loan payment refunds or the student loan cancelation plan, be sure to visit our MoneySolver blog or subscribe to the ED’s federal student loan borrower updates.