Loan service companies announced that qualified student loan borrowers have three months to reclaim payments during an administrative forbearance.
Student loan borrowers who made payments while on administrative forbearance and want a refund may have a limited time to address the issue, according to a Forbes report.
In October, a Federal Student Aid internal memo outlined remediation efforts to ensure that borrowers are not negatively affected by return-to-repayment servicing errors. The notice requested approval to “grant credit toward Income-Driven Repayment Loan (IDR) and Public Service Loan Forgiveness (PSLF) for borrowers who were taken out of a repayment status and placed in an administrative forbearance.”
“Returning to repayment after the payment pause is one of the most significant management challenges on FSA’s history,” the memo read. It was anticipated that many borrowers would face challenges when issues arise, while FSA and call centers have struggled to handle the volume of callers seeking information and repayment arrangements. Forbes reported that the Biden administration had recently instructed loan servicers to place many borrowers into administrative forbearance to address and correct past administrative servicing errors.
As a result of communication issues, from service account transfers to lack of clarity and billing irregularities, some borrowers continued to make payments. Now, loan service companies such as Aidvantage have announced that qualified student loan borrowers have three months to reclaim payments during an administrative forbearance. Other federal servicers may be offering similar opportunities.
Ahead of the news, BLACK ENTERPRISE reported on the Biden administration’s latest round of debt cancellations by approving an additional $5 billion. This was made possible through existing programs such as the Public Service Loan Forgiveness program, which erases remaining student loan debt after a decade of qualifying monthly payments.
RELATED CONTENT: Skipping Student Loan Payments Can Have Serious Consequences, Here’s Why
Source: Black Enterprise
