Students who have continued to pay their student debt during the pandemic may face good news as that money could go straight back into their pockets.
In an announcement related to the expansion, the Department of Education explained a refund option available to students.
“You can get a refund for any payment (including direct debit payments) you make during the payment break (from March 13, 2020)on eligible loans, according to the release. This gives students the opportunity to recoup the money they spent on their student loan during the pandemic.
Keep in mind that any refunds will still need to be made in the future; this is not another form of cancellation. However, these measures will apply to very few people. According to data from the Ministry of Education only 1.2% of borrowers continued to repay their student loan during the pandemic.
The The White House has long grappled with a plan to deal with $1.7 trillion in 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, that figure is $20,000. The non-payment window has been extended until the end of this year. This will be the last extension of this type.
How to request the refund?
For those eligible for debt cancellation, nothing needs to be done. The refund will be automatically calculated and sent.
For those whose debt is not adjusted automatically, students will need to call their loan officer. 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 reimbursement of payments made during the Covid freeze 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 Counselors, a nonprofit organization.