Despite a court injunction preventing the Biden administration from temporarily executing debt discharges, some checks are beginning to be paid to certain student loan debtors.
Borrowers who paid down their student loans after the pandemic stop went into place in March 2020 are receiving checks in the mail.
Biden Admin Sends Refund Checks for Borrowers
Bloomberg stated that between March 2020 and December 2021, an estimated 8.8 million consumers made at least one payment despite the pandemic delay.
The plan for forgiveness has a clause that reads as follows. After you successfully apply for and receive debt relief under the Administration’s debt relief plan, we’ll automatically refund the amount you paid during the payment pause, up to the amount of your outstanding balance, if you made voluntary payments during the payment pause, which ran from March 13, 2020, through December 31, 2022, and your current loan balance is below the amount of debt relief you’ll receive.
Although no additional particular actions are needed to get an eligible payment return, borrowers must first complete their application for debt relief.
You won’t automatically get a refund when you apply for debt relief if your current balance is more than the amount of debt relief you receive, according to the department, and you made payments during the payment stop.
Student Loan Forgiveness Plan
According to the Biden plan, borrowers may be eligible for up to $10,000 in federal student loan forgiveness if their income in 2020 or 2021 was less than $125,000 or $250,000 for households.
For Pell Grant recipients, the amount rises to a maximum of $20,000 in student loan cancellation. The eligibility of dependent students is impacted by parental income.
According to studentaid.gov, the majority of federal loans, including undergraduate and graduate direct loans, parent PLUS and graduate PLUS loans, consolidation loans, loans from the federal family education loan (FFEL) program held by the department, Perkins loans held by the department, and defaulted loans are all eligible.
READ MORE: Will Student Loan Forgiveness Remove Your Tax Refund?
