How to get a refund on student loan payments made during the pandemic

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  • You can get a student loan refund for all the payments you made during the pandemic.
  • It’s simple: call your student loan officer to request your repayment.
  • If you still have a balance owing, getting a refund may not make financial sense.

In addition to $10,000 to $20,000 in student loan forgiveness per federal borrower, President Biden’s student loan relief plan includes a cash surprise for borrowers who made payments during the pandemic.

If you continued to make payments on your federal student loans during the pandemic, you are entitled to a refund of the full amount you have paid since March 13, 2020.

However, your overall payment journey could be affected if you receive a refund.

Call your repairer to request repayment of your student loan

Here are the numbers to call your student loan officer:

*Borrowers served by FedLoan Servicing have recently transitioned to MOHELA or Nelnet. Check your inbox to make sure you can sign in to your account.

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Why You Might Not Want To Ask For A Student Loan Repayment

For borrowers with a balance, the amount repaid to you will be added to your student loan principal balance. For example, if your current balance is $15,000 and you receive a refund of $3,000, your main balance will increase to $18,000.

If this is your situation, you may not want to request a refund for one key reason: the cost of capitalized interest.

During the pandemic payment pause, federal student loans stopped earning capitalized interest. Capitalized interest is the unpaid interest at the end of each billing cycle that is added to the principal balance. This is why student loans take so long to pay off if you continue to pay the minimum monthly payment.

Since student loans stopped earning interest during the pandemic, all of your payments went directly to the principal balance of your loans. On the other hand, going back to our $3,000 repayment example, if you add $3,000 to your student loan principal balance, that amount will continue to earn compound interest over the long term.

Check if your repayment is less than your student loan forgiveness amount

First, check your payment history on your student loan manager’s website to see the total amount you’ve paid during the pandemic. If that total amount is less than $10,000 — or $20,000 if you received a Pell Grant — and you meet the income requirements for student loan forgiveness, it may be a good idea to request your refund.

The repayment amount that will be added back to your principal balance will be reversed before federal student loans start earning interest again on July 1, 2023.

Whether you still have a student loan balance or not, refunds will be issued by direct deposit. The Federal Student Aid website does not include information on how long it will take to receive the refund, but Insider will continue to update this story.

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