Graduates celebrate during the University of Delaware Class of 2022 commencement ceremony in Newark, Del., Saturday, May 28, 2022. (AP Photo/Manuel Balce Ceneta)

NEW YORK (AP) — When President Joe Biden announced a student loan debt forgiveness plan, many borrowers who continued to make payments during the pandemic wondered if they had made the right choice.

Borrowers who repaid their debt during a pandemic freeze that began in March 2020 can actually get a refund — and then apply for forgiveness — but the process for doing so has not always been clear.

If you think you’re eligible, here’s what you need to know:

WHO IS ELIGIBLE FOR A REFUND?

Borrowers who hold eligible federal student loans and have made voluntary payments since March 13, 2020 can get a refund, according to the Department of Education.

For some people, this reimbursement will be automatic. You can get a refund without asking if your payments have brought your loan balance below the maximum debt relief amount: $10,000 for all borrowers and $20,000 for Pell Grant recipients. Borrowers can check their balance on their studentaid.gov account.

For example, if a borrower paid $100 per month for 10 months of the pandemic and their balance is now $8,000, that $1,000 will be automatically repaid. Then they can request cancellation of the rest of their debt.

But if a borrower has paid throughout the pandemic and still owes $14,000, they won’t get an automatic refund. They can, however, request the cancellation of $10,000 of this debt.

Another group of people who need to request a refund are those who have fully paid off their loan balance during the pandemic. If this is you, you are eligible for loan forgiveness, but you will need to request a refund before seeking debt relief. Borrowers must confirm their eligibility for the loan forgiveness program before requesting a refund.

For example, if a borrower had $5,000 in debt at the start of the pandemic and paid it all back during the freeze, but qualifies for a forgiveness of up to $10,000, they would request a repayment of $5,000. $, then request the cancellation of his debt. .

“Borrowers who have repaid their loans during the pause will need to request a refund first and then request cancellation,” a department spokesperson said.

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Reimbursement is not available for private student loans.

Eligible federal student loans:

—Direct loans (defaulted and non-defaulted)

—Federal Family Education Loan Program (FFEL) loans held by ED (defaulted and non-defaulted)

—Federal Perkins loans held by ED (defaulted and non-defaulted)

—Defaulted loans from the FFEL program not held by ED

—HEAL loans in default

If you’re not sure what loan you have, visit your dashboard on studentaid.gov and look for the “my loan officers” section. If you can’t access your dashboard, you can call the federal student aid office at 1-800-433-3243 to request loan service information.

HOW CAN I REQUEST A REFUND?

Borrowers who want to repay a specific amount can request it by calling their loan service provider. At this time, refunds are only made over the phone and not through a website or email.

When the Biden administration announced the pardon, loan managers found themselves inundated with calls. But many borrowers now say they don’t wait long when they call.

“I was on hold for about five minutes,” said Megan McParland, from New Jersey, who graduated in 2018 and made multiple payments during the payment freeze.

McParland requested a refund the first week of September. At first, she felt the service agent was trying to talk her out of making the request. But after confirming she wanted to continue, she was told she would see her refund in about a month.

Sierra Tibbs, a 47-year-old resident of Casselberry, Florida, had a similar experience. The entire phone call with her loan officer lasted about 20 minutes.

Tibbs requested a refund after seeing a video online advising her that she could get the money she paid back during the pandemic.

If you are unsure who is servicing your loan or if the agent has changed during the pandemic, visit your student aid account dashboard and scroll to “my loan officers” or call 1- 800-433-3243.

Before you call your loan provider to request your refund, you need to know your account number and the amount you want to repay.

—Loan Officer Phone Numbers:

FedLoan Services: 1-800-699-2908

Great Lakes Educational Loan Services, Inc.: 1-800-236-4300

Edfinancière: 1-855-337-6884

MOHELA: 1-888-866-4352

Advantage Help: 1-800-722-1300

Netnet: 1-888-486-4722

OSLA Service: 1-866-264-9762

ECSI: 1-866-313-3797

Default resolution group: 1-800-621-3115 (1-877-825-9923 for the deaf or hard of hearing)

HOW WILL PAYBACK WORK — AND WHEN WILL MY LOANS BE PAID?

When you request a refund, the amount you paid during the payment freeze will be added to your student loan balance, said Katherine Welbeck, civil rights counsel for the Student Borrower Protection Center.

This amount is still eligible for cancellation and can be eliminated after requesting a rebate.

You are eligible for debt relief if you had an annual federal income of less than $125,000 individually or $250,000 if you are married or head of household in 2020 or 2021. Application should open in early October and you can apply until December 31. , 2023.

It is unclear when borrowers will see debt relief. So far, the plan only mentions that borrowers will be notified by their loan officer when their debt is cancelled. It is also possible that forgiveness will be delayed if the Biden the administration faces legal challenges.

Laura Baum, a 30-year-old Chicago resident, paid $5,000 during the payment freeze for her remaining debt of $15,000. She is eligible for the $20,000 waiver since she was a Pell grant recipient when she was an undergraduate student. In early September, Baum called his loan manager and requested a refund.

But due to the uncertainty, she plans to save that money until the Ministry of Education confirms that her debt has been forgiven.

“I’m going to hold onto this refund until I see absolutely $0 in my student loans,” Baum said.

WHAT IS THE DEADLINE TO APPLY?

The deadline to request a refund is December 31, 2023. However, Welbeck recommends that you request a refund before requesting debt forgiveness.

“If you make a request first, you can process the refund to get your money back, and then that balance in your account is canceled,” Welbeck said.

The loan forgiveness application process should take four to six weeks.

The Ministry of Education offers a subscription page where you can sign up to be notified when the application is opened.

HOW MUCH CAN I BE REIMBURSED?

According to the Ministry of Education, you can get a refund of the full amount you paid during the payment freeze. However, you can choose a lower amount.

You can choose this option if, during the pandemic, you have paid enough so that your debt is less than the maximum forgiveness amount. You could get a partial refund and then request cancellation of your remaining debt.

Let’s say you had $15,000 of debt remaining when the payment freeze started and you’ve since paid $8,000, but qualify for $10,000 in debt relief. You might decide to request a refund of just $3,000. Then your debt balance will be exactly $10,000 and you can apply for maximum loan forgiveness.

WHEN WILL I GET MY REFUND?

Borrowers should expect to receive their refund 6 to 12 weeks after applying, according to the Ministry of Education. But you might want to check with your loan officer.

McParland’s loan officer told her she should see her amount refunded in 30-45 business days, but Baum was told it would take 60-70 business days to see her money in her bank account.

IS THE REPAYMENT INCOME TAXABLE?

It is not yet clear whether the money refunded will be considered taxable income. Welbeck recommends borrowers check with financial advisors in their own state.

Some states, like Indiana, have already said they will provide debt relief for people whose student loans have been forgiven. Policies vary from state to state.

DOES THE REFUND AFFECT MY CREDIT SCORE?

Because the Department of Education has yet to announce how cancellation or refunds will be reported to credit bureaus, it’s still unclear whether these amounts will affect borrowers’ credit scores, Welbeck said. .

DO I HAVE TO START PAYING WHEN THE PAYMENT FREEZE ENDS?

The pandemic payment freeze is set to end on December 31. If you haven’t seen debt relief by then, you still need to start making payments. Welbeck recommends borrowers enroll in income-driven repayment plans before the payment freeze ends.

Income-driven repayment plans allow you to set an affordable payment amount based on income and family size.

You can find more information about the four types of income-based repayment plans here.