If I made payments that would qualify under the waiver, but was not employed at the time, what will happen when I reach the 120 payments with my current employer? Sorry, this post was deleted by the person who originally posted it. $17,000 refunded. All Rights Reserved. Now that Im out from under the loan, I can think about what it meant.. Though Wadsworth learned about PSLF in 2010a few years after the program was launched to reward those working in public service professionsshe didnt know she had to consolidate her loans into direct loans until 2015. They said this is an easy one, it'll wipe out all the rest of your loans once you've consolidated this, so I said okay, great. The hundreds shell save in payments each month are earmarked for different savings goals as well as going toward her wifes $20,000 student loan balance. Those over-payments were made while I was in the EDRP program. All of this comes as millions of borrowers are waiting to see if the Supreme Court will uphold Biden's broad student-debt relief plan. "It typically takes 30 days to 45 days for the consolidation to occur," Kantrowitz said. Thank you. We're so sorry.' Has anyone else gotten their refunds, and if so, how long did it take? She tries not to think of how much further that money could have gone if it was invested or simply put in a savings account when she was younger. The Department of Education has not released exact details on the refund procedure. However, if the refunds work like the Covid-19 refund requests, the refunds will be issued via the original payment method. "Borrowers should do this even if they don't expect to have 120 payments by the deadline, as the previously ineligible payments will count only if they do this," he added. Rather, her checking account balance was $15,000 more than she had anticipated, thanks to 20 deposits from the federal government worth between $730 and $790 each. Jacob Currence, 41, made years of extra payments through the Public Service Loan Forgiveness program. The implementation of that adjustment was recently pushed back to 2024. 3. 3/26: received official notification of forgiveness of $28k. You can find more information about the four types of income-driven repayment planshere. They told him he could then consolidate his loans to get his remaining balance wiped out under PSLF, he said. If thats you, youre eligible for loan forgiveness, but youll have to request a refund prior to applying for debt relief. All rights reserved. If you have either a Federal Family Education Loan (FFEL) or a Federal Perkins Loan, which don't normally count for public service loan forgiveness but now temporarily do, you'll need to consolidate those into direct loans with your servicer. All Rights Reserved. The recent changes mean that many borrowers will see a dramatic increase in their number of certified payments. This FAQ provides basic information and answers to common questions about PSLF Program and the limited waiver opportunity. (Part of the /r/StudentLoans network) It has reassessed borrowers' applications and recounted their payments, and it estimates that more than 500,000 people may now be closer to loan forgiveness. Get this delivered to your inbox, and more info about our products and services. "Slam dunk. Additionally, the department announced permanent PSLF reforms last year. He contacted his servicer, MOHELA, in August to get refunded on those payments, but hasn't had any luck. and our Tibbs applied for a refund after seeing a video online informing her that she could get back money she paid during the pandemic. He simply wants MOHELA to follow through with what they advised him nearly seven months ago. It only took 15 months from the time I applied for the waiver in December 2021. But if a borrower paid throughout the pandemic and still owes $14,000, they wont get an automatic refund. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice| Do Not Sell/Share My Personal Information| Ad Choices He's made no progress getting a refund on his overpayments to PSLF. Privacy Policy. On Oct. 6, 2021, the U.S. Department of Education (ED) announced a change to Public Service Loan Forgiveness (PSLF) program rules for a limited time. "They called it slam dunk," Currence said. Access your favorite topics in a personalized feed while you're on the go. This is a really interesting question, Shona. Right now I 85 payments under my current employer, and 79 payments from before I worked for this employer. The eight years of payments she made before the PSLF program existed didnt count toward forgiveness at all. Is the $2630.00 supposed to be my refund? I cant tell you how unfamiliar it is to have this feeling of lightness and freedomSuddenly, I feel young., Wadsworth had no idea if the waiver would work or notand she didnt have high hopes initially. Laura Baum, a 30-year-old resident of Chicago, paid $5,000 during the payment freeze toward her $15,000 remaining debt. For more information, please see our The refunds shouldn't have any tax implications, Mayotte said. To get your student loans forgiven under PSLF, you need to have made 120 payments over 10 years while working a public service job. 6. Find out why we're restricted and access emergency FAQ about student loans here: https://www.reddit.com/r/studentloanadvice/comments/147ef3s/brief_faq_while_rstudentloans_and_rpslf_are_dark/. 8/4 - Studentaid.gov website updated to show new balance. Here are the steps you should take to make sure you're included. If some of your payments didn't qualify for another reason than an illegible loan type, you should still get a refund as long as you've hit those 120 payments. "I don't really see this Biden relief making it through the Supreme Court," Currence said. However, you can choose a lower amount. PSLF counts were never updated. Refunding prior payments is a surprise. More from Personal Finance:How to get back on track after blowing your budgetThere's still time to slash your 2021 tax billProposed retirement system changes are still in play, "I noticed that a lot of payments I made weren't counted," Tongson, 48, said. Reddit, Inc. 2023. Left: You'll receive a notification when your loans are forgiven, provided you've had your employment certified for those 120 qualifying payments. If you apply first, you can process the refund to get your money back, and then that balance in your account is canceled, Welbeck said. Income-driven repayment plans allow you to set an affordable payment amount based on income and family size. Actually getting the money back, it was more important for the validation that this really had happened. The Biden administration says the waiver is necessary because the rules of the program were confusing for so many borrowers for so long. as well as other partner offers and accept our. He contacted his servicer, MOHELA, in August to get. After a weekend in Mexico, Nancy Wadsworth opened her bank account app to assess her finances after the trip. https://www.pbs.org/newshour/education/how-to-get-a-student-loan-refund-if-you-paid-during-the-pandemic, Some states have laws to tax student loan debt forgiven by Bidens plan, I can breathe a little bit more. How student debt relief will affect 8 borrowers, in their words, What students returning to campus are craving, Answers to questions about Bidens student debt forgiveness plan. When the Public Service Loan Forgiveness program was created, it was naively assumed that all borrowers would voluntarily join an Income-Driven Repayment plan, or IDR for short. I got my official forgiveness letter today! For some people, that refund will be automatic. For more detailed information about PSLF under the normal rules, please see the Department of Education . The forum is also where she learned a refund was a real possibility. Now I'm curious about the overpay refund as I had over 160 eligible payments as I made my 120th in 2017. "It may take longer to get your refund, depending on processing times in other parts of the government," the guidance states. I was on hold for about five minutes, said Megan McParland, of New Jersey, who graduated in 2018 and made several payments during the payment freeze. Reddit and its partners use cookies and similar technologies to provide you with a better experience. I am anticipating additional refunds representing the 19 payments I made to Direct Loan Servicing Center between Nov 2017 (after my 120th payment) and May 2019 (last payment before my loans shifted over to FedLoan). The limited waiver expires October 31, 2022. McParland requested a refund the first week of September. Sherpa Thoughts: Why issue refunds on prior payments?These refunds are likely an acknowledgment that the government recognizes that borrowers should have already been given forgiveness and that it was wrong to continue to collect payments.Additionally, government attorneys may have concluded that refunds were necessary to avoid losing a lawsuit against former borrowers. June 15, 2022, 7:14 AM PDT Nancy Wadsworth's student loans were forgiven, and she was refunded $15,000, after submitting the PSLF waiver earlier this year. Scan this QR code to download the app now. FYI for those wondering about refund of overpayments. After multiple extensions, these benefits are currently available through August 30, 2023. Keith Williams can attest to Currence's experience. Subscribe to Here's the Deal, our politics newsletter. He never thought getting his money back would be so hard. Sign up for notifications from Insider! document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Answering questions helps me identify the issues borrowers face and makes this site a better resource. I have FFEL loans and am going to consolidate because of the new pslf announcement. Ive never seen my checking account look so healthy. Direct consolidation loan and the Public Service Loan Forgiveness Waiver 4. Cookie Notice You can get a refund without applying if your payments brought your loan balance below the maximum debt relief amount: $10,000 for all borrowers, and $20,000 for Pell Grant recipients. However, if the refunds work like the Covid-19 refund requests, the refunds will be issued via the original payment method. When Insider previously asked the Education Department for comment on whether it oversees the refund process, it pointed to guidance posted on Federal Student Aid's website that outlined the general process to request a refund. Lenders have been accused of misleading borrowersand miscounting their qualifying payments. The recent changes to Public Service Loan Forgiveness may mean that borrowers who had FFELP or Perkins loans get a huge refund. The government is giving people refunds for overpaying on their loans 7. Direct Loans (defaulted and non defaulted), Federal Family Education Loan (FFEL) Program loans held by ED (defaulted and non defaulted), Federal Perkins Loans held by ED (defaulted and non defaulted), Defaulted FFEL Program loans not held by ED. "They have completely led me down the wrong path through this whole process," Currence said. Some borrowers consolidated their FFEL or Perkins loans many years ago. Another possible refund is for the payments you made during the payment pause toward loans covered by the forbearance. She is eligible to have $20,000 canceled since she was a Pell grant recipient when she was an undergraduate. Get the inside scoop on todays biggest stories in business, from Wall Street to Silicon Valley delivered daily. Should borrowers refinance during the Waiver period? Welbeck recommends that borrowers enroll in income-driven repayment plans before the end of the payment freeze. The department previously estimatedaround 550,000 borrowers will benefitthey haveuntil Oct. 31, 2022, tosubmit a waiverto have previously ineligible payments counted. Learn more about Friends of the NewsHour. How to consolidate federal student loans Apr 2, 2023, 4:15 AM PDT Getty Images Jacob Currence, 41, made years of extra payments through the Public Service Loan Forgiveness program. What is student loan consolidation? Global Business and Financial News, Stock Quotes, and Market Data and Analysis. The cherry on top of this great news is that many borrowers will receive refunds for previous payments. "And I never understood why.". Like many other employer-based student loan repayment assistance programs, there may have been a contract that participants signed at the time they enrolled or when they received reimbursements for payments. All rights reserved. Since his undergraduate education, Currence said he went right into public service work as a teacher for health and physical education, and he decided that pursuing an advanced degree in administration would allow him to make a bigger impact. The benefits of forgivenessfinancially, psychologically, and emotionallyare impossible to overstate, she says. She and her wife are planning to take a weeklong trip to Europe in a few months with some of the $15,000 refund. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. 1098bb to benefit student loan borrowers, particularly the public service workers who have been affected by the COVID-19 pandemic. Other commenters wrote that qualifying payment counts were often updated by the Education Department more than once for each borrower. Those who were on the wrong repayment plan will also benefit. Those who made more than 120 payments will receive a refund for the extra payments. Borrowers who had FFEL and Perkins loans may now qualify for forgiveness. I'm like, I understand that that's the best you can do at this point. Do you know anything about refunds for people who were also in EDRP at the same time as PSLF? FORTUNE may receive compensation for some links to products and services on this website. I am going to wait until the end of April before inquiring about those, as I am guessing they will be taken care of in the Department of Education's review. 2023 Fortune Media IP Limited. Reddit, Inc. 2023. She was always unsure if those five years of payments would end up counting toward the 10 years she needed to have her balance forgiven. Reddit, Inc. 2023. When the Biden Administration announced the forgiveness,loan servicers found themselves inundated with calls. I got a refund for my 13 payments from USDOE in Sept 2022. MOHELA did not respond to Insider's request for comment. I would have been happy with just having the loans forgiven. I really had paid my loans, and then some.. After Biden announced up to $20,000 in student-debt relief in August, Federal Student Aid reiterated that borrowers who made payments during the payment pause could get a refund by contacting their student-loan servicer. Its the little things that I havent been able to do, she says. Now I'm curious about the overpay refund as I had over 160 eligible payments as I made my 120th in 2017. Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications. Are you a single adult who lives alone? If you paid by check you'll get a check mailed to you, and it may take longer than getting it by automatic deposit. Through 10/31/2022 borrowers may receive credit for past payments made that would not otherwise qualify for PSLF. 7/27 - FedLoan website updated to show new balance and all pandemic payments gone. Assuming they met the other criteria for the program, borrowers like Wadsworth would be eligible for forgiveness if they had made 120 on-time payments, regardless of loan type. I wish the best to all fellow student loan borrowers. McParlands loan servicer told her that she should see her refunded amount in 30 to 45 business days, but Baum was told that it would take 60 to 70 business days to see her money back in her bank account. According to Federal Student Aid's website, borrowers who made over 120 qualifying payments and met the employment certification guidelines to PSLF are entitled to a refund. To give people the proper credit for their payments, the administration is now looking not at the number of your qualifying payments but the months that you've been in repayment, saidElaine Griffin Rubin, senior contributor and communications specialist at Edvisors. That's all I get out of MOHELA. The entire phone call with her loan servicer took around 20 minutes. On Oct. 6, 2021, the Department announced a set of improvements to the PSLF Program, including waivers of certain program requirements, which will be available to borrowers over the next year. Biden extends moratorium on student loans till May 1, 2022, How to get back on track after blowing your budget, There's still time to slash your 2021 tax bill, Proposed retirement system changes are still in play, fixes the Biden administration has been making to the loan program. My only familiarity with the Education Debt Reduction Program is based on the information publically available. It came in separate refund payments for each month I overpaid. Just patience. It was like a miracle.. You can get a refund for the entire amount you paid during the payment freeze, according to the Department of Education. You want to act as quickly as possible, Kantrowitz said. Borrowers who paid down their debt during a pandemic freeze that started in March 2020 can in fact get a refund andthen apply for forgiveness but the process for doing that hasnt always been clear. The refund deposits showed up in her account a few weeks later. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. The application process for loan forgiveness is expected to take four to six weeks. So many wealthy Chinese are trying to get their kids out of the country that its made an obscure school one of the How a 24-year-old saved enough money to buy a $250,000 house by living in a tiny home her parents built for her in CA Notice at Collection and Privacy Notice, Do Not Sell/Share My Personal Information. My loans were finally forgiven but I had overpaid. For more information, please see our You might pick this option if, during the pandemic, you paid enough to get your debt below the maximum amount of forgiveness. The problem the Biden administration is working to fix is that many borrowers are told by their lenders that they've made fewer payments than they actually have, or that some of their payments aren't counted for technical reasons, such as the type of federal loan they hold or being late one month. But Congress failing to increase funding for Federal Student Aid has left the department and servicers with limited resources to answer borrowers questions in a timely manner. Post consolidation, you made a total of 80 payments. "But if they don't tell me what the hell's going on, I think that's the the only thing I'm going to be able to do.". If you decided to continue making payments to your federal student loans after March 13, 2020, that would effectively help you get out of debt faster. We're so sorry. "However some states do tax the amount forgiven under PSLF," she added. They can, however, apply to have $10,000 of that debt erased. Currence jumped at the opportunity to consolidate his loans into federal direct loans under student-loan company MOHELA to qualify for debt relief. "Any payments made over 120 will be automatically refunded as long as those extra payments occurred after consolidation," said Betsy Mayotte, president ofThe Institute of Student Loan Advisors, a nonprofit. Information and advice about Public Service Loan Forgiveness, a forgiveness program for US federal student loans. Thus, you have made a total of 140 PSLF payments. For many years, advocates have been calling for PSLF changes to help borrowers who had issues with repayment plan or loan eligibility. The Public Service Loan Forgiveness (PSLF) Program allows you to receive forgiveness of the remaining balance of your Direct Loans after you have made 120 qualifying monthly payments while working full time for a qualifying employer. To ensure you're following all the PSLF requirements and keeping on top of your records: Enroll in autopay so you never miss a payment or make a late payment.And consider keeping a separate bank account for your loan payments to make it easier to track your payments, LRAP funds, and out-of-pocket contributions . Find out why we're restricted and access emergency FAQ about student loans here: https://www.reddit.com/r/studentloanadvice/comments/147ef3s/brief_faq_while_rstudentloans_and_rpslf_are_dark/. Nancy Wadsworths student loans were forgiven, and she was refunded $15,000, after submitting the PSLF waiver earlier this year. It hasn't been easy. He said hemade about 20 years worth of payments on his $83,000 balance, and he attempted to contact MOHELA to start the process of getting refunded. However, if you didnt consolidate and made all 140 payments towards the FFEL loan, you can still qualify for PSLF, but a refund isnt available. 20 11 comments Anyhow Just thought I'd share in case the timeline helps others. This is not right. However, if the 79 payments were made while you worked for a different PSLF-eligible employer, those payments can still get certified. She hopes other people are able to benefit from forgiveness the way she has. and our Cookie Notice (Part of the /r/StudentLoans network) 2. Just patience. Share your story with this reporter at asheffey@insider.com. Youreeligible for debt reliefif you had an annual federal income below $125,000 individually or $250,000 if youre married or head of household in 2020 or 2021. Im never the person who can pick up the check with a group of people, and Id really like to pick up the check once in a while.. For a payment to be certified, you must be working in an eligible job at the time the payment was made. The U.S. Department of Education also refunded Tongson $20,000 for her years of overpayments, and many other borrowers are likely due refunds, as well, experts say. I sent two e-mails through the Fed Loan Servicing website requesting a refund and got automatic response e-mails confirming they had received my communication. The Public Service Loan Forgiveness Program is intended to encourage individuals to enter and continue in full-time public service employment by forgiving the remaining balance of their Direct loans after they satisfy the public service and loan payment requirements. But for Currence, he's not even relying on that relief going through. newsletter for analysis you wont find anywhereelse. If borrowers consolidate, does repayment history reset to zero? But because of the uncertainty, she is planning to save that money until the Department of Education confirms her debt has been canceled. Save my name, email, and website in this browser for the next time I comment. However, the program has been defined by problems and rejections, with borrowers often believing they're paying their way to loan cancellation only to learn at some point in the processthat they don't qualify, often for wonky and unclear reasons. Jacob Currence has spent nearly two decades working in public service and he's paid off his student loans far longer than needed to qualify for debt relief. There was no message [from the Education Department] saying I would be refunded for overpayments, she saysthey just appeared in her bank account one day. Got a confidential news tip? Though she makes decent money as a tenured professor, she says she still felt like she was living paycheck-to-paycheck as a result of her loans. Let's do it.". eligible for forgiveness if they had made 120 on-time payments, Half of boomers and late Gen Xers who took early retirement during the first Covid wave have fallen into poverty. Following President Biden's most recent extension of the student loan pause to June 2023, borrowers may ultimately receive more than three years of "free" credit towards IDR and PSLF student. Affiliate Disclosure and Integrity Pledge. An example is the best way to explain this exception. While these refunds are great news, several significant exceptions might prevent borrowers from collecting a refund check. Now shell have enough money not only to save, but to live more spontaneously, without the worry of how shell pay off the loans each month looming over her. That's when things started getting complicated. Youre in a program, you have no idea if its real, but so much hangs on it.. WATCH: School systems struggle to fill teaching jobs as students return to class. Welbeck recommends borrowers check with financial advisers from their own state. 4/7: overpayment refund was direct deposited in multiple amounts of $387.50 (my monthly standard payment) totaling about $3000ish. 2020 through Dec. 2022 so long as you worked for a qualifying employer at the time.
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