Some student loan borrowers are getting reimbursed

Despite legal challenges to the student loan forgiveness program, the federal government is reportedly sending refund checks for student loan payments made by borrowers during the moratorium on payments during the pandemic.

Those who paid off their loans will be refunded after payments were stopped in March 2020, Bloomberg report Tuesday (November 1).

A clause in the student debt forgiveness plan will allow borrowers to request reimbursement if they make payments during the pandemic, with about 8.8 million paying between March 2020 and December 2021, according to the report. made at least one payment to

The refunds are being made as part of the COVID-19 stimulus program and are the first concrete sign of President Joe Biden’s plan to forgive student debt, the report says.

Student loan payments will resume on Jan. 1, and borrowers whose income falls below a certain level will be eligible for forgiveness of up to $10,000 on some loans, or up to $20,000 on Pell Grant loans, according to the report. I have. However, legal challenges from six states in the Federal Court of Appeals suspended this pardon.

As PYMNTS reported in August, canceling student debt might be a bit of political football, but it could be a boon for paycheck-to-paycheck consumers and, by extension, the economy as a whole. in their pocket.

read more: Student loan forgiveness offers cash-strapped consumers a respite

About a third of all borrowers said they would write off their debts completely. Congressional Research Service.

Middle-class households owe an average of $43,090 in student loans. Education Data Initiative.

Unlocking income can give living consumers a breather paycheck to paycheckwhose numbers are increasing in the United States

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