How to Get a Refund On Your Student Loan Payments

Refunds for Administrative Forbearance Periods

Loan servicers, including Aidvantage, are notifying borrowers that they can seek a refund for payments made during recent administrative forbearance periods. If your student loan was in forbearance from October to December 2023 or October to January 2024 and you are either on an Income Driven Plan or have Public Student Loan Forgiveness, you may be eligible for a refund. Though act fast – you have a 90-day window from the notification date to contact your loan servicer and request a refund.

How to Request a Refund

To initiate the refund process, borrowers need to reach out to their loan servicer directly. However, it's essential to note that most servicers are currently experiencing longer-than-normal call hold times. Be prepared for potential delays and exercise patience when contacting your loan servicer to request a refund.

Forgiveness Opportunities During Administrative Forbearance

Some administrative forbearance periods may count toward loan forgiveness under Income-Driven Repayment plans and Public Service Loan Forgiveness, though it’s still unclear what this may look like.

The On-Ramp Period and Credit Reporting

Despite being in administrative forbearance, some borrowers are still receiving delinquency notices or bills. The Education Department has clarified that borrowers are currently in the "on-ramp" period, extending through September 30, 2024. During this period, borrowers should not face penalties for missing payments. Delinquent accounts will be placed in forbearance for missed payments, preventing negative credit reporting and avoiding defaults that could lead to collection agencies.

The Bottom Line

As student loan borrowers navigate repayment complexities, refunds offer a lifeline. Despite challenges, staying informed and proactive ensures seizing opportunities for financial stability during student loan uncertainties.

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