How to Get Refunded for Student Loan Payments? Biden Admin Sends Out Checks

As U.S. President Joe Biden's student loan forgiveness plan remains tied up in court, some borrowers who paid their debt during the COVID-19 pandemic will soon receive refunds.

Bloomberg reported this week that the government will soon be sending out checks to those who previously paid their student loans while payments were officially paused in 2020 due to the pandemic.

In August, Biden announced a plan to forgive some student loans up to $20,000 for those who received a federal Pell Grant, while others were eligible for up to $10,000 in relief depending on their income. However, in October, six Republican states filed a lawsuit to block Biden's plan, which led to a court of appeals temporarily blocking the plan.

"Today's temporary decision does not stop the Biden Administration's efforts to provide borrowers the opportunity to apply for debt relief nor does it prevent us from reviewing the millions of applications we have received. Amidst Republicans' efforts to block our debt relief program, we are moving full speed ahead to be ready to deliver relief to borrowers who need the help," U.S. Secretary of Education Miguel Cardona said in a statement on October 21. "As we continue our preparations in compliance with this order, we continue to encourage working- and middle-class Americans to apply for debt relief at studentaid.gov."

Despite the temporary block, the Federal Office of Student Aid lists some steps on how to receive a refund if you previously paid part of your debt during the pandemic pause.

The Federal Office of Student Aid website says that if you made a loan payment from March 13, 2020, to December 31, 2022, "and your current loan balance is below the amount of debt relief you'll receive," you will automatically receive a refund for that amount. You will first have to apply for a debt relief check under the administration's debt relief plan, the website says.

"Let's say you're eligible for $10,000 in debt relief. If you currently owe $9,500, that amount of relief will be applied to your loan(s). If you paid $1,000 during the payment pause, you'll be automatically refunded $500—the remaining amount of your $10,000 of debt relief," the Federal Office of Student Aid website says.

However, the website also says that if you made loan payments during the pause, but your current debt balance is above the debt relief you will receive, you will not receive an automatic refund check. "This is because the full amount of debt relief will be applied to your loan balance."

Additionally, other student loans that are not owned by the federal government may not be eligible for a refund. This will require you to contact your direct loan provider to discuss possible options for a refund.

Newsweek reached out to the U.S. Department of Education for comment.