Yes, Borrowers Are Eligible for Refunds on Student Loan Payments Made After March 2020

After the Biden administration announced a student loan forgiveness plan in late August 2022, broad-ranging discussions included claims that some borrowers might be eligible for refunds of payments made during a “pause” initiated in March 2020:

In the tweet above, Twitter user @Braxtonbrew96 stated that federal student loan payments had been “paused since March 2020,” and that anyone who made payments during the “pause” could request a refund from their student loan servicer. Threaded underneath that was a related tweet from the Student Borrower Protection Center’s timeline:

An image attached to the tweet read in part:

YOU CAN GET A REFUND FOR ANY FEDERAL STUDENT LOAN PAYMENTS [MADE] SINCE MARCH 2020!

Anyone with Department of Education owned federal student loans can request a refund of all amounts paid after March 13, 2020 through the end of the payment pause.

This applies to a LOT of borrowers — including the million+ who completely paid off their loans during the payment pause.

One sidebar graphic advised borrowers to contact student loan servicers by phone to request a refund. A second sidebar graphic instructed callers to say: “I would like a refund for the payments I made during the payment pause.”

A popular August 25 2022 post to Reddit’s r/studentloans addressed the same aspect of student loan forgiveness, adding that callers should calculate their refund before calling their servicer. Like the quoted material above, the post indicated that payments made from March 13 2020 onward were potentially eligible for inclusion:

The student loan forgiveness plan generated significant amounts of news and discussion, which in turn created a flood of information for borrowers to sift through. The “refund” element, it appeared on studentaid.gov‘s “COVID-19 Loan Payment Pause and 0% Interest” page (in the “Determining Eligibility” section):

Refunds During the Payment Pause

You can get a refund for any payment (including auto-debit payments) you make during the payment pause (beginning March 13, 2020). Contact your loan servicer to request that your payment be refunded.

In that section, text reading “loan servicers” directed visitors to a generalized page on the topic. Aside from contact information for individual loan servicers, the page contained no details about the refunds for eligible borrowers.

A CNBC article about the refunds included an example of how the process worked in the broader context of student loan forgiveness:

Let’s say you had an $8,000 balance prior to the pandemic, and paid $3,000 off since Mar. 13, 2020, leaving you with a current balance of $5,000. If you ask for a refund from your servicer, your payments will be issued to you back in cash. So in this, you will receive $3,000. However, your overall student loan balance will go back up to $8,000.

After that, you would apply for student loan forgiveness. Assuming you’re under the income restriction and a non-Pell grant borrower, you will have $8,000 forgiven, leaving you with no student loan debt. From there, you can decide what to do with the $3,000 that was returned to you.

However, while some people have moved forward with requesting their refunds from their servicers, some experts are advising to wait until more details are released from the Department of Education to understand how pandemic-era student loan payments will affect overall balances and eligibility for student loan forgiveness.

As CNBC reported, borrowers and servicers were still awaiting further details on the provisions of the student loan forgiveness plan as of late August 2022. However, studentaid.gov has confirmed that eligible borrowers could request a refund, and some borrowers have reported successfully doing so in the days following the plan’s unveiling.

In August 2022, the Biden administration confirmed a student loan forgiveness plan for between $10,000 and $20,000 of student loan debt. That announcement occurred during an ongoing “payment pause” involving federal student loans, initiated in March 2020. Eligible borrowers who made payments between March 2020 and August 2022 could request refunds from their loan servicers, as indicated by studentaid.gov.