There are so many details in federal student loan repayments that it may not surprise you that one was created during the COVID-19 emergency relief program.
Aside from the well-known rule that Direct Federal Student Loans are exempted from interest until May 1, 2022, there is a little gem that can be helpful for those borrowers who may have underestimated their savings.
You can request the government to reimburse any Direct Loans you have made to the Department of Education since March 13, 2020, when the COVID-19 Forbearance Period officially began.
How to get your payments refunded
Simply call the lender that is servicing your student loan and provide this information.
Dates you made payments
The amount of each payment
How many payments do you want to be refunded?
Borrowers who pay multiple loan servicing agencies will need to contact each lender. However, if you really need the money it is well worth the effort.
It is a good idea to ask the lender when the money will be refunded. Also, how the refund will be made. You can mark that date in your calendar. If you don’t receive the refund by the due date, call the lender again to confirm.
You can request a refund if you are enrolled in the Student Loan Forgiveness Program. This will not affect your status. You can ask for the money back as long as you meet all requirements. The 120 payments you have made count towards the requirement to be forgiven.
FFEL Loans in default: Interest and collection suspension
Mar. The Mar. 30 decision of the Biden administration to suspend interest and collection on defaulted loans in Federal Family Education Loan (FFEL), was taken by the Biden administration.
This will stop the actions against over 1 million borrowers who defaulted on their FFEL loan and are at risk of having federal tax returns seized to pay for the loans. This relief applies retroactively to March. 13th of March 2020: Any tax refunds or wages garnished in the previous year will be returned to the borrower.
Is it possible to get a refund for private student loan payments?
The COVID-19 emergency relief program does not apply for federal loans and private loans that are not owned by the Department of Education. To find out if your loan is eligible for relief, contact your loan servicing agent.
While some private loans may offer forbearance programs for certain loans, most loans will continue to accrue interest throughout the forbearance period. The interest will typically be added to the principal at the end, so you will likely owe more and have higher monthly payments.
For more information on any loan servicing agency program, please contact them.