Student Loan Refund Checks Are In the Mail for Anyone Who Paid During the COVID-19 Moratorium

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Some checks are starting to be sent to certain student loan borrowers even though, as result of a court order, the Biden administration is temporarily blocked from processing debt discharges.

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Bloomberg reported that checks are being sent to borrowers who paid down their student loans after the pandemic pause took effect in March 2020. Despite the pandemic pause, an estimated 8.8 million people made at least one payment between March 2020 and December 2021, Bloomberg added.

As part of the student loan forgiveness plan, there is a clause specifying: “If you made voluntary payments during the payment pause — from March 13, 2020, through Dec. 31, 2022 — and your current loan balance is below the amount of debt relief you’ll receive, 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 (only up to the remaining amount of your eligible debt relief),” per the Department of Education.

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While no specific additional action is needed in terms of claiming an eligible payment refund, borrowers do have to submit their student loan debt relief application to begin with.

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Those With Larger Amounts of Outstanding Eligible Debt May Not Receive Refunds

However, the department adds that if you made payments during the payment pause — and your current balance is higher than the amount of debt relief you receive — you won’t get an automatic refund after you apply for debt relief.

“This is because the full amount of debt relief will be applied to your loan balance. If you still want to receive a refund for voluntary payments you made during the payment pause, contact your loan servicer,” it explained on its website.

Under the Biden plan, up to $10,000 in federal student debt relief may be offered to borrowers whose income in 2020 or 2021 was less than $125,000 (or $250,000 for households). That figure rises to up to $20,000 in student loan cancellation for Pell Grant recipients. If you are a dependent student, your eligibility is based on your parental income. Most federal loans are eligible, including undergraduate and graduate direct loans, parent PLUS and grad PLUS loans, consolidation loans, federal family education loan (FFEL) program loans held by the department, Perkins loans held by the department and defaulted loans, according to

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Borrowers have until Dec. 31, 2023, to apply.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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