The student loan tax offset program resumed in 2024. If you have federal student loans in default, your 2025 tax refund may be at risk.
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.
Spring refund date (remaining 75% of Federal Pell Grant) and other financial aid programs, including Federal Direct Loans, will be March 08, 2024. After March 8th, refunds will be issued weekly as students become eligible.
When will I receive my financial aid refund? This varies by school. It'll usually take between 1 week and 1 month after classes start, but it can take even longer. You can check online or contact your financial aid office to see the status of your financial aid refund disbursement.
Additionally, the Department is now processing 2024-25 FAFSA paper applications within 7-10 days or less of receipt. The Department is also reprocessing a small number of paper applications that encountered issues during initial processing. We will communicate with these applicants if further information is needed.
You earned below the threshold
Get a refund if your annual income for a previous tax year was below the repayment threshold.
You don't get reported when you're in forbearance. During the on-ramp period (through Sept. 30, 2024), we automatically put your loan in a forbearance for the payments you missed. Here's what this means: Your account was no longer considered delinquent and was made current.
Your Financial Aid refund can be used towards any education-related item listed in the cost of attendance such as such as books, transportation, housing, food, and miscellaneous expenses. This also means you are solely responsible for budgeting this refund throughout the semester.
Will Treasury offset, such as withholding of tax refunds and Social Security benefits, resume after the student loan payment pause ends? No. If you're eligible for the Fresh Start for defaulted loans, any collections on those defaulted loans, including through Treasury offset, will stay paused through Sept. 30, 2024.
Your tax refund may be bigger this year due to inflation-related changes to the standard deductions and tax brackets for 2024. These adjustments could translate to a bigger tax refund compared to 2023 if your income, withholding, filing status and tax credits stay the same.
According to the IRS, student loan amounts forgiven under PSLF are not considered income for tax purposes. Learn more about the PSLF process. You won't be taxed by the federal government, but your state may tax you. Any debt forgiven as a result of PSLF won't create a federal tax liability for you.
Most student loan borrowers receive a student loan refund check just before the beginning of every semester. The check represents the amount left over after the school has taken out what is owed for tuition, fees and room and board (if applicable).
Refunds for all types of financial aid will begin 30 days after the start of the semester. You will receive loan funds in two disbursements each semester.
If you work full time for a government or nonprofit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you've made 120 qualifying payments—i.e., at least 10 years of payments. To benefit from PSLF, you need to repay your federal student loans under an IDR plan.
The department first implemented the forbearance in August 2024 due to ongoing litigation between the department and seven states challenging the debt cancellation effort's legality. The plan is under an injunction preventing the department and servicers from forgiving loans.
In July 2024, AFT sued MOHELA for a wide range of unlawful practices, including illegally executing a “call deflection” scheme to deny service to borrowers who need help.
Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s). If you haven't yet qualified for forgiveness, you'll be able to see your exact payment counts in the future.
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.
The Fresh Start program for borrowers with previously defaulted student loans will prevent withheld tax refunds through at least September 2024. And borrowers won't newly fall into default as payments resume. The White House announced a 12-month student loan on-ramp from Oct. 1, 2023 to Sept.
It is easy to check whether a refund is owed by logging on to the government's Student Loan Company portal, where individual refunds could range from tens of pounds to more than £1,000. Tom Allingham from Save the Student said for many getting a refund could make a world of difference.
The application was delayed because of the FAFSA® Simplification Act passed by Congress, which led the U.S. Department of Education to overhaul the FAFSA® process by shortening the application and making other changes, which caused the 2024-25 application's release to be delayed.
Disbursement Calendars
Mailed refund checks should arrive within 7-10 business days (Monday - Friday) after check is generated. Direct Deposit refunds are deposited into a U.S. bank account within 3 to 5 business days from the Anticipated Financial Aid Refund date.
Gavin Newsom signed a bill on March 25 extending the deadline for California students to file their FAFSA to May 2, 2024, in order to be eligible for state financial aid.