After Biden announced $10,000 to $20,000 in debt forgiveness for federal borrowers making less than $125,000 a year in late August, many borrowers who weren’t sure if relief would ever come — and decided to make payments during the payment freeze — wanted refunds . Up until this point, the department said any borrower who wanted a refund could call their student loan servicer to start the process, but now, some borrowers may not need to take any action at all to get their money back. In a frequently asked question posted on studentaid.gov detailing how to access the Biden debt relief, the department recently added a refund section explaining that borrowers can automatically get a refund for payments made during the payment freeze if:
Apply for and get loan forgiveness through the Biden plan And your voluntary payments during the break brought your balance below the maximum amount of relief you could get, but didn’t pay off your balance in full.
Other borrowers can still get refunds through the regular process of contacting their loan servicer, but the department noted that if borrowers consolidated their loans before March 13, 2020, refunds are not available for payments made before consolidation . The story continues The student loan forgiveness application form is expected to go out in early October, and the department said it will take four to six weeks to process the forms and make changes to borrowers’ balances. Mike Pierce, executive director of the advocacy group Student Borrower Protection Center, previously told Insider he was concerned about the administrative hurdles that come with applying for relief and said in a statement that automatic refunds are “a positive and necessary step toward fulfilling of President Biden’s duties. historic promise to erase student debt.” “The automatic provision of these refunds will ensure that borrowers are repaid if they made payments during the payment freeze without having to rely on the vagaries of abusive and inefficient services to access this relief,” he added. “We are pleased to see that the Department understands the importance of automation and maximizing relief for borrowers. We urge them to implement the remaining debt relief that Biden promised by making it all automatic.” Read the original article on Business Insider
