If You’ve Been Paying Your Student Loans, You May Be Entitled To A Refund

... [+]Millions of borrowers who have been making payments on their student loans during the last year may not realize that they are entitled to a refund.

The CARES Act, which Congress enacted last year, temporarily suspended all payments on government-held federal student loans. President Trump extended the moratorium twice to the end of January 2021, and when President Biden took office, he extended the relief further to September 30, 2021.

Of course, some student loan borrowers may not need or want a refund of their payments. Since the CARES Act also temporarily froze all interest, effectively resulting in a 0% interest rate for government-held federal student loans, borrowers who have been repaying their loans under a Standard, Extended or Graduated repayment plan and had no outstanding accrued interest prior to the suspension have been able to apply their entire payments to their principal balance.

Furthermore, for other borrowers who are on track for student loan forgiveness programs, making payments during the suspension period may not have much benefit. Under the CARES Act and the subsequent extensions, the months of suspended payments would count towards loan forgiveness terms under Income-Driven Repayment plans and Public Service Loan Forgiveness , as long as all other eligibility criteria are met.

The Department of Education encourages borrowers interested in a refund to contact their loan servicers for more information.

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