How to get a refund for student loan payments made during pandemic pause (and who shouldn’t)

Requesting a refund does not change the amount of forgiveness a borrower qualifies for

President Joe Biden speaks about student loan debt forgiveness in the Roosevelt Room of the White House, Wednesday, Aug. 24, 2022, in Washington. (AP Photo/Evan Vucci) (Evan Vucci, Copyright 2022 The Associated Press. All rights reserved)

SAN ANTONIO – President Joe Biden announced a plan this week that will bring debt relief to millions of people who have student loans.

The student debt relief plan will forgive up to $10,000 in federal student debt for people who make less than $125,000 per year, and up to $20,000 for people who received Pell Grants.

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The pause on student loan payments has also been extended one final time through Dec. 31, 2022.

Payments on student loans were initially paused on March 13, 2020, due to the coronavirus pandemic. Accruing interest on those loans was also paused.

Borrowers were still able to make payments on loans during the pause, which went directly towards the loan’s principal balance.

Now, for borrowers who made payments during the pause and also qualify for debt relief — there’s a way to get a refund to maximize your debt forgiveness.

According to the federal student aid website, borrowers can get a refund for any payment, including auto-debit payments, they made during the payment pause. Borrowers should contact their student loan servicer to request a refund of payments.

It makes fiscal sense to take advantage of the refund option only if the amount of debt forgiveness you qualify for will exceed the balance on your student loans.

Otherwise, requesting a refund would just be adding money back to your balance owed.

Let’s say you owed $15,000 at the start of the pandemic and you made $3,000 in payments during the pause. If you qualify for $20,000 in loan forgiveness you might want to request a refund. Essentially, you’d be given your $3,000 back and your balance would return to $15,000. And, since you qualify for $20,000 in forgiveness, your debt gets wiped clean.

Now, take that same scenario but say you only qualify for $10,000 in student loan debt forgiveness. If you owe $15,000 and paid $3,000 during the pause, you still owe $12,000. If $10,000 of your student loan debt is forgiven, you still owe $2,000 and it wouldn’t make sense to request that $3,000 back since it would bring your loan back up to $5,000.

So, these refunds are just money you’re getting free and clear, it is added back to the balance of your loan.

Requesting a refund does not change the amount of forgiveness a borrower qualifies for.

Relief from student loans will be capped at the amount of each person’s outstanding debt. If you owe $15,000 and qualify for $20,000 in relief — your loans will be forgiven but you will not receive $5,000 in credit for loan balances you’ve already paid.

Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education, according to An application is expected to be launched in the coming weeks for borrowers to report their income if the department doesn’t have it already.

The application will be available before the pause on federal student loan repayments ends on December 31. If you want to be notified by the department when the application is open, you can sign up on the Department of Education subscription page.


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