How To Get A Refund For Your Student Loan Payments

Finance1 year ago
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Keeping up with the expense of federal student loan repayment plans can be extremely difficult. Thankfully, US students can access a respite through the CARES Act, which gave students with a federal loan a break from repayments during the pandemic and the economic issues that it caused.

And if you continued to make payments on your student loans over the past two years, you can ask for a federal student loan repayment refund! Below we will talk you through everything you need to know about how to apply for a refund for your student loan payments under the CARES act and whether you may qualify for the scheme.


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What is the CARES Act for Federal Student Loan Refunds?

If you currently make monthly payments on a federal student loan, you may have heard of the CARES Act. Under this scheme, repayments became paused due to the economic turmoil caused by the COVID pandemic. During this pause, interest rates were also set at 0%.


What Dates Can I Apply for a Refund for Student Loan Payments?

Under the CARES policy, you can apply for a refund for student loan payments you made between the period of March 13, 2020, and December 21, 2022.

You may have chosen to keep your payments initially during this time but have decided this was not the best financial decision. In that case, you can apply for federal student loan refunds under the act.


Which Students are Eligible for Federal Student Loan Refunds?

If you continued to make any payments to your federal student loans during the dates detailed above, you might be eligible for a refund on your payments. Here are the criteria you need to meet to qualify for a refund for payments during the pandemic:

  • This applies to Federal Student Loans solely; if you have a private student loan, you cannot request a refund from the Department of Education.
  • You must have made payments during the CARE scheme window. You cannot apply for refunds on payments that do not fall between March 13, 2020, and December 31, 2022.
  • This is for Federal Student Loan Refunds on direct and Department of Education FFEL loans. If you have a commercial FFEL loan, this will not apply.


Should I Apply for a Refund for Student Loan Payments?

Before you begin applying for federal student loan refunds, consider whether this is the best option for you at this time. Remember, even though you can get refunds for your payments, you will still need to pay them back later.

If you are currently experiencing financial hardship, however, applying for a refund for student loan payments may be an effective way to access some money until you reach a level of financial stability again.


How to Get a Refund for your Student Loan Payments 

If you want a refund for student loan payments under the CARES scheme, you must complete a student loan refund request for the money paid.


You Will Need to Get Proof of Your Payments

Access the online history of your Federal Student Loan Repayment plan and identify all the payments during the period between March 13, 2020, and December 31, 2022.

You should also gather your relevant bank statements and any confirmation emails that you have relating to the payments. If you complete your payments online, this information should be relatively easy to get a hold of.


Contact your Student Loan Servicer

Once you have gathered all the information, you can reach out to your loan servicer and inform them that you would like a refund for student loan payments made within the eligible period.

The best way to go about this request is by phone, although you can also make it by email. When making your request, mention that you are making this claim under the CARES act scheme and have all your payment details and dates in front of you.

Your student loan servicer should then give you an idea about how long it will take for your federal student loan refunds to be processed. You should expect your refund payment to go through the same channel you paid it.


How Long Do Federal Student Loan Refunds Take?

After you have requested a refund for student loan payments with your loan servicer, they will then send your request to the US Treasury Department to process it.

You should expect your refund payments to arrive in your bank account approximately four to six weeks from when you first submitted your request.

Should You Apply for Loan Repayment Refunds if you are Going to Seek Loan Forgiveness?

If you are applying for student loan forgiveness, make sure to apply for refunds on your eligible student loan payments. This is because these payments may be eligible for forgiveness anyway!


Summary: How to Get a Refund for your Student Loan Payments

The pandemic was hard on everybody financially, including students, and the government recognized this financial strain by introducing the CARES act. If you are currently struggling financially and made payments on your federal student loan repayment plan during the eligible period, then you can alleviate the strain by applying for a refund.

Getting a refund for your payments made during the pandemic and following the economic downturn can be an efficient and accessible way to access funds without taking out another loan and getting into further debt.

Remember, this program is a pause on payments, not forgiveness, so you will still need to make these payments eventually. But before rushing ahead, take the time to ensure that getting a refund for student loan payments makes the most financial sense.

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