Refund Checks Arrive for Student Loan Borrowers Who Paid During Pandemic

Some student loan borrowers are starting to receive refund checks from the government, even as President Joe Biden’s forgiveness plan is tied up in court.

The government is sending money to borrowers who paid down their student loans after the pandemic pause took effect in March 2020, when interest rates fell to zero and payments were suspended. The checks are part of a little-known provision of the Covid-19 stimulus program that is getting new attention because millions of borrowers expect to have at least $10,000 in student debt forgiven. For many, it’s the first tangible sign that Biden’s plan is working.

Jason Gutierrez, a 33-year-old engineer in Greensville, South Carolina, graduated in 2011 with about $50,000 in student debt and had a balance of around $9,000 when the pandemic hit. He paid it off the last of it in December, taking advantage of the interest freeze to zero his balance.

Gutierrez was initially frustrated by the news that Biden was going to forgive debt, but was able to take advantage of a provision in the CARES Act that allows borrowers who want refunds on pandemic-era payments to ask for the money back. Gutierrez contacted Nelnet, his loan servicer, at the beginning of September and recently received 18 checks in the mail to cover the payments he made during the pause.

He plans to put the $9,000 toward an engagement ring for his girlfriend, and has applied to have the money forgiven as part of Biden’s plan.