Since March 2020, federal student loan borrowers were not obligated to make monthly payments. During this period, officials said borrowers could continue making payments to reduce their debt whenever the moratorium lifts.
Last week, President Joe Biden announced that federal student loan borrowers who meet income requirements would have up to $10,000 of their student loans forgiven. That amount increases to $20,000 for those who received Pell Grants in college.
It turns out those who continued paying during the pandemic might be eligible for refunds.
“If you made a payment during this time, you can request a refund through your loan servicer,” the Department of Education said.
Requesting a refund, however, will cause borrowers’ balances to go back up. This refund program could be helpful for borrowers with balances below $10,000, or $20,000 in the case of Pell Grant recipients.
While the Department of Education is directing borrowers to contact their servicer, loan servicers are still trying to figure out the process.
“Please hold off on calling us as we continue to experience heavy phone volume,” Great Lakes, a federal student loan servicer, said late last week. “We do not have any more details on who is eligible for loan cancellation than what was announced by President Biden.”