BUFFALO, N.Y. — If you have been paying off your student loans since the pause on them began back in March 2020, you can get a refund for any of those payments made.
Here's an example of how this will really help some borrowers.
Let's say back when the pause began, someone had $10,000 left to pay on their loan, but they continued to make payments during the pause and now only owe $6,000.
That borrower can request a refund for $4,000 and can then apply for up to $10,000 in student loan forgiveness if they qualify.
Remember, any individual making under $125,000 or any household making under $250,000 qualifies.
In addition, anyone who was awarded Pell Grants will get up to $20,000 in relief.
"If you're in a situation where you're going to get the based on the $10,000 or $20,000, and you owe less than what's on your cap, then it might make sense to get some of that money back. But if you don't, then I'd say keep that money in there because you paid it on the principal, and it will help you pay it off moving forward," said Nathan Daun-Barnett, department chair in University at Buffalo's Educational Leadership and Policy.
Then there are borrowers who were able to pay off their entire loan off during the pause, but it's unclear on the federal student aid website whether they could get a refund. Experts say you might get one.
"I assume the servicers will have records of that. Whether or not they'll open up a closed account and allow you to take that refund if you paid it off during that period, maybe they will. I mean, this would suggest that they would," Daun-Barnett said. "I think we'll have to see that specific scenario as it plays out with the servicers."
He says the best thing to do is contact your loan provider since you will have to request the refund through them.
How you get the refund will depend on your loan servicer as well.
In most cases, it will go back into your checking account and the balance will reappear on your loan.