You likely received a student loan refund check in 2023 because you made voluntary payments on federal loans during the COVID-19 pandemic payment pause (March 13, 2020, to December 31, 2022). Under the Biden-Harris administration, these pandemic-era payments were deemed refundable, allowing borrowers to request them back, especially if they qualified for broader loan forgiveness initiatives.
If your student loan balance was forgiven under an income-driven repayment plan or PSLF, it's possible you overpaid, and you might receive a refund. You may also be eligible for a refund if you lost money as a result of a student loan forgiveness scam.
A. The IRS encourages taxpayers to discuss the issue with their financial institutions because they may need to close bank accounts. Taxpayers receiving erroneous refunds should also contact their tax preparers immediately. There are established procedures they should follow to return erroneous funds.
Only borrowers who requested refund checks got them. The refunds weren't automatic. Payments made on federal student loans during the pandemic pause were eligible for a refund — but with broad cancellation off the table and payments restarting, the refunded amounts are being added back to borrowers' loan balances.
WASHINGTON – Today, the Department of Education announced that it will delay plans to seize tax refunds and garnish the wages of struggling student loan borrowers who have not been able to keep up with rising loan bills.
The amount of federal student loans applied to an account exceeds the account's outstanding balance. More was paid than actually due. There was an account balance adjustment that resulted in a lower balance owed. Student loan forgiveness refund.
You have made payments but you do not earn enough to start repaying your student loan. You are on the wrong repayment plan. You have finished paying off your student loan but payments are still being taken from your wages. You started paying your loan too early.
The American Rescue Plan Act of 2021 (American Rescue Plan), enacted in early March 2021, provided Economic Impact Payments of up to $1,400 for eligible individuals or $2,800 for married couples filing jointly, plus $1,400 for each qualifying dependent, including adult dependents.
How do I know if I'm getting a refund check? Students will know if they are receiving a financial aid refund check after all of their tuition and fees have been covered for the term and there are remaining funds.
Direct Stafford Loan. Direct Stafford Loans are student loans that must be repaid and are available to both undergraduate and graduate students. First-year undergraduates are eligible for loans up to $5,500. Amounts increase for subsequent years of study, with higher amounts for graduate students.
Unexpected Checks or Payments
If you receive an unexpected IRS refund check or direct deposit payment, this could be a red flag. The IRS typically does not issue refunds without prior communication. You can verify your status by logging into your IRS account on their official website.
In 2021, Congress lowered the threshold for reporting income on payment apps from $20,000 and 200 transactions annually to $600 for a single transaction.
Look up the authorizing agency directly and contact them to find out why they sent the payment. Verify that the check is legitimate: Use the Treasury Check Verification System to confirm that the check you received is legitimate and issued by the government.
Scholarships, grants, and loans usually disburse directly to your college to cover billed expenses. If the financial aid exceeds these costs, a refund is generated.
Refunds for federal student loans
Keep in mind that this isn't free money. It's still part of your loan. Ideally, you'll want to return the money to your lender or you can choose to use it for books, or other school-related expenses.
The disbursement date is the date your school disburses (pays out) your Direct Loan by applying the loan funds to your school account, paying you directly, or both. Direct Loans are usually disbursed in more than one installment.
Some of the most common FAFSA errors are: Leaving blank fields: Too many blanks may cause miscalculations and an application rejection. Enter a '0' or 'not applicable' instead of leaving a blank. Using commas or decimal points in numeric fields: Always round to the nearest dollar.
Generally, though, if you are eligible for a refund, your payments can be refunded to you in the same way that you made them. For example, if you made your payments electronically, your refunds can usually be sent to the same bank account that you used to make the original payments.
You might get a refund check every semester you're in college, but it depends. You must submit the FAFSA each year, which could affect the amount of aid you receive. That, in turn, can determine whether or not you receive a refund.
Fake Treasury Check Scams
This scam involves the fraudulent use of checks that appear to be issued by the U.S. Treasury. Scammers send counterfeit checks to individuals, claiming that the recipients are entitled to receive a government grant, tax refund check, or other payments from the Treasury.
If you recently received $2,800 from the IRS, it's likely related to Economic Impact Payments issued under the American Rescue Plan Act of 2021. This legislation provided: $1,400 per eligible individual. $2,800 for married couples filing jointly.
Stimulus payments
Single taxpayers with an adjusted gross income (AGI) of $75,000 or below. Taxpayers filing as heads of household with AGIs of $112,500 or below. Married couples filing jointly with AGIs of $150,000 or below.
Today, the White House announced an indefinite pause of the collection of defaulted federal student loan debt, including through the Treasury Offset Program, which applies any tax refunds towards a defaulted borrower's outstanding federal student loan debt.
If your refund check has not arrived in the expected time frame, you should first verify when your refund was issued. You may do this by reviewing your mailing address in GET. For refunds that have been issued and did not arrive in the expected time frame, contact One Stop Financial Services.