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

"Refunds will not be automatic. Borrowers will have to initiate the action

BUFFALO, N.Y. (WBEN) When President Biden announced a plan in August to forgive student loan debt, many borrowers who made payments during the pandemic wondered if they could get a refund and then apply for forgiveness?

Jeff Boron, at Send Your Kids to College, said the answer is yes. "If you were making payments during the student loan pause which started in March of 2020, you can request a refund from your student loan servicer. Borrowers should go to their studentaid.gov account and request a refund. You will get a check back for those payments. In turn, the loan balance will increase. Then, you can apply for forgiveness," he said.

For example, if you had 10 thousand dollars in an outstanding loans and made 5 thousand in payments during the pandemic, it reduced the balance to 5 thousand. You can have the 5 thousand added back and then when the forgiveness program is officially open, you can request the full 10 thousand dollars to be forgiven.

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What if someone paid off their loan in full during the pandemic? Boron said you can go through the same process. The only difference is that you're going to be dealing with the service provider directly to request a refund. "From what I understand it's going to take two to three weeks to get the refund," he added.

The college planner is also offering some advice. "You probably want to start looking at this in the near future."

The forgiveness program is not officially rolled out yet. People can sign up on Ed.gov for a notification on when it's up and ready. The latest word has the program beginning in mid October, but there is nothing concrete at this time.

The refunds will not be automatic. Boron said borrowers will have to initiate the action to get refunds on payments made during the pandemic pause.

WBEN asked Boron about his level of confidence that the loan forgiveness program is going to happen. "There was a faction trying to fight this program, saying the president did not have the authority to make such a sweeping loan forgiveness thru executive order. I wouldn't count your chickens before they
hatch. The latest odds I've seen show a 20% chance that this will be canceled or at least delayed."

Does that mean it would be a risk to request a refund of payments made during the pandemic, in order for them to be forgiven? "You're going to get the check back," said Boron. "Hopefully you're not going to find out that the program is canceled. But don't go and spend that money before we know what's going on, because you might have to put it right back on your loan."