Confused about student loan forgiveness and checks? 4 things to know

In defense of his debt relief package, President Biden said last week that his administration would push back against the states’ legal challenge and that the scheduled cancellation would begin soon.

“We are going to win this case”, Biden told NewsNation when asked about the case. “I think in the next two weeks you’re going to see those checks coming out.”

That last bit left some people confused. Borrowers eligible for the rebate will not receive a check through Biden’s program but will have their balances reduced by up to $20,000.

The debt relief plan aims to cancel up to $10,000 in federal student debt for people earning less than $125,000 a year, or less than $250,000 for married couples. Those who received Pell Grantsfederal aid for low-income students, could see up to $20,000 forfeited.

Now there is a separate initiative that could offer refunds to some borrowers. The Ministry of Education offered to return the money to people who continued to pay on their debt since the beginning of a payment in the era of the pandemic moratorium in March 2020. The policy went largely unnoticed until the Biden administration took notice when the president unveiled the debt relief plan.

Most of the nearly 42 million people covered by the pause have not made payments since its inception, but the Department for Education said around 9 million borrowers in good standing continued to send money. silver. This population of borrowers is entitled to repayments, which must be requested through loan servicers.

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