6 Things To Know About The Student Loan Refund
Student debt has financially crippled many in the country, with some individuals working multiple jobs to pay off their loans to families going bankrupt in an effort to provide a better future for their children. With debt rising to a record high of 1.75 trillion, it’s critical to know where you or your student may land after the release of the Student Loan Refund.
Read below to learn about how The Student Loan Refund may affect you and your family:
1. The Refund In a Nutshell
Many may not have noticed, but during the pandemic, student loans were paused since March of 2020. This pause was a welcome relief for those who did not pay their loans for the past two years. However, as of May 2022, the delay has since expired, and those who stopped paying will have to start where they left off.
Nevertheless, the students and families who continued to pay their student loans are eligible for a refund on any payments they made since March of 2020. To learn more, check out the studentaid.gov website.
2. Student Loan Refund Vs. Federal Student Loan Discharge
With the recent news of the Student Loan Refund, many have been reasonably confusing it with the Federal Student Loan Discharge. However, the best way to distinguish between these two types of student loan processes is to recognize that Federal Student Loan Discharge applies only under certain circumstances (e.g. you pass away or someone illegally took out student loans in your name), and you are no longer obligated to pay off the loans once you receive the discharge.
While Student Loan Refunds are only eligible for students and families who paid their student loans for the past 24 months and though they are eligible for a refund, they will have to continue paying off their student loans.
3. Student Loan Refunds and Private Loans
Another thing that people have been reasonably getting confused about is whether those who have been paying their private student loans throughout the pandemic are also eligible for the Student Loan Refund. Sadly, though, the short answer is no.
Student Loan Refunds are only eligible for those with federal student loans under the Dept. of Education because the federal government covers refunds rather than privately-owned companies, like those that private student loans (e.g. Sallie Mae or SoFi) are under.
4. How to Request A Refund
Despite the confusion surrounding this refund, requesting a refund is remarkably simple.
To request a refund, all you need to do is call your lender and provide them with this information:
- The dates of your payments.
- The amount of each payment.
- How much you want to be refunded.
5. Should You Get a Refund?
The answer to whether you should get a refund depends on your particular circumstances. Below are a few reasons why some people are and some people aren’t getting a refund.
Why You Should Get A Refund
- Repurpose the money you used to pay off your loans to pay for something you need now.
- You’re struggling financially.
- Get ahead financially by putting that money towards paying off unnecessary debt, like high-interest credit card debt.
Why You Should NOT Get A Refund
- Don’t get a refund thinking that it will cancel your student loans because it won’t. You still have to pay off your student debt.
- Getting a refund would force you to start all over again, except this time you would have to start making interest payments on something you’ve already paid for.
6. When and How You’ll Receive Your Refund
When you speak to your lender, make sure to ask them when you should expect your refund and how you’ll receive your refund (i.e. as a check, direct deposit, etc.). Asking this will help you and your lender save time and energy processing your refund.
Note: If you haven’t received your refund by the date that your lender noted, be sure to call them back to see what happened.
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