Multi-Million Dollar Student Loan Refund Checks: Here’s What To Do If You Don’t Get The Benefits

Millions of people have received student loan repayment checks thanks to the provisions of the CARES Act, but many are not eligible for debt relief. (iStock)

Borrowers who made student loan payments during the COVID-19 pandemic are being sent refund checks as the White House student loan forgiveness program faces an ongoing legal battle.

The check came after the CARES Act suspended payments to federal student loan borrowers during the COVID-19 pandemic. During this time, federal student loan payments were suspended and interest rates were lowered to 0% as part of the pandemic relief package passed in March 2020.

“Make voluntary payments during the suspension of payments (March 13, 2020 through December 31, 2022) and your current loan balance is equal to the amount of debt relief you will receive after successfully applying and receiving debt relief.” Under the government’s debt relief plan, we will automatically refund the amount you paid during the suspension of payments (up to the remaining amount of eligible debt relief),” the Federal Office of Student Assistance said. says. State on its website.

Still, about 9.1 million federal student loan borrowers made at least one payment between April 2020 and March 2022. Federal Office of Student Aid.

pause is Set to Expired On December 31, 2022, some extensions were made. Borrowers can contact student loan servicers to request a refund, according to the Federal Office of Student Assistance.

However, most federal student loan relief does not apply to private student loan borrowers. If you have a private student loan and want to reduce your monthly payments, you can consider refinancing your loan to get a lower interest rate. Visit Credible to compare different student loan lenders without affecting your credit score.

Good news: Private student loan rates plummet for 5 and 10 year loans

Biden administration says suspension of student loan payments won’t be extended

Federal student loan payments are currently suspended and voluntary, but the Biden administration announced in August that final extension About “Suspension of Student Loan Payments, Interest, and Collections through December 31, 2022.”

This means that from January 2023, millions of borrowers will have to start making payments again. credible dataBut one study found that more than half of student loan borrowers say they can’t or may not be able to make their payments when the suspension ends. Morning consultation.

If you have private student loans, you are not eligible for the federal student loan suspension. However, you can reduce your monthly payments by refinancing. Visit Credible to compare multiple student loan lenders at once and find the best interest rates.

How to prepare your finances for the end of the student loan suspension

Student loan forgiveness contested in court

August, President Joe Biden announced his plan Offers one-time student loan forgiveness of up to $10,000 for millions of borrowers or up to $20,000 for those who used a Pell Grant loan in college. To qualify, a federal student loan borrower must have an annual income less than her $125,000, or less than her $250,000 if a couple.

However, that plan is currently being contested in court. A federal appeals court gave him a preliminary judgment on October 21. Student Loan Forgiveness Program Block We are considering legal challenges brought by six states: Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina.

Prior to this decision, a federal district judge dismissed the case, arguing that plaintiffs had not shown that the program would directly harm the state. However, the state appealed the decision.Biden administration urged borrowers to hold on as court battle continues Apply for student loan forgiveness..

But if Biden’s student loan forgiveness plan goes into effect, private student loan borrowers won’t benefit. If you have a private student loan, you can reduce your monthly student loan payments by refinancing to a lower interest rate. Visit Credible to see your personalized interest rate in minutes.

Biden Administration Amends Student Loan Forgiveness For Some Borrowers

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