Dilemma-refund of student loan pmts made during the pause, but pd through BK

[ope2]

Hello all!

It has come to my attention that you are able to request a refund of any payments made toward Federal student loans during the Covid payment pause. (Yes, it is true, it's a thing and it is stated on the studentaid.gov website.)

Question is though...all those payments were made through my Chapter 13 bankruptcy. Would I get in some sort of trouble for this? Or is it considered "paid by me" and therefore mine to request back? I want to do this, but I want to make sure I am not violating any sort of rule that would void my bankruptcy.

They say that the refund goes back into the bank account the payments were made from. When I inquired, since my payments were apparently made via physical checks from the trustee, my student loan servicer said that a check from the Treasury Department would then be sent to the address they have on file for me.

I'm in a situation where this money would come in handy (health insurance deductible/medical costs), and I've already unfortunately exhausted my other credit options.

Any thoughts/precedent on this? I've contacted the attorney I used for the BK, but I guess since I have been discharged they are not required to or willing advise me.

[flashoflight]

Can you request a partial refund of $50 and see what happens first? My concern is that it will go to the trustee somehow.

To me, it's like a loan modification after the bankruptcy which is legal. But I'm not a lawyer.

If it was me, I would just do a trial refund and see what happens. If it works, then take it all out.

[eap82]

Hello all!

It has come to my attention that you are able to request a refund of any payments made toward Federal student loans during the Covid payment pause. (Yes, it is true, it's a thing and it is stated on the studentaid.gov website.)

Question is though...all those payments were made through my Chapter 13 bankruptcy. Would I get in some sort of trouble for this? Or is it considered "paid by me" and therefore mine to request back? I want to do this, but I want to make sure I am not violating any sort of rule that would void my bankruptcy.

They say that the refund goes back into the bank account the payments were made from. When I inquired, since my payments were apparently made via physical checks from the trustee, my student loan servicer said that a check from the Treasury Department would then be sent to the address they have on file for me.

I'm in a situation where this money would come in handy (health insurance deductible/medical costs), and I've already unfortunately exhausted my other credit options.

Any thoughts/precedent on this? I've contacted the attorney I used for the BK, but I guess since I have been discharged they are not required to or willing advise me.

Hey, Question...who is your servicer? As soon as I filed mine went to ECMC who happens to be the like top servicer for bankruptcy and or delinquent loans. They are a nightmare. The website doesn't work and hasn't for years. You have to call and as soon as I do I get the bankruptcy department and they treat you like your trash b/c you are in a bankruptcy. My loans were never delinquent before my BK. It turns out my loans are not eligible for the interest free deferment supposedly b/c the government told them they don't have to do that for my loans in bankruptcy. They are accruing interest daily and the payments my trustee is making isn't even covering interest. I will owe more when I'm done that when I started. It's a hole I feel I'll never get out of. I literarily cried on the phone with them for like 30 minutes trying to understand why someone who clearly needs the interest free forbearance doesn't get it. I hope your situation is better than mine. I doubt there is anyway for me to recover any payments made to my loan while I'm in bankruptcy.

[flashoflight]

Hey, Question...who is your servicer? As soon as I filed mine went to ECMC who happens to be the like top servicer for bankruptcy and or delinquent loans. They are a nightmare. The website doesn't work and hasn't for years. You have to call and as soon as I do I get the bankruptcy department and they treat you like your trash b/c you are in a bankruptcy. My loans were never delinquent before my BK. It turns out my loans are not eligible for the interest free deferment supposedly b/c the government told them they don't have to do that for my loans in bankruptcy. They are accruing interest daily and the payments my trustee is making isn't even covering interest. I will owe more when I'm done that when I started. It's a hole I feel I'll never get out of. I literarily cried on the phone with them for like 30 minutes trying to understand why someone who clearly needs the interest free forbearance doesn't get it. I hope your situation is better than mine. I doubt there is anyway for me to recover any payments made to my loan while I'm in bankruptcy.

With EdFinancial student loans, the 0% interest is applicable to everyone including bankruptcy. Not sure why ECMC is doing what they're doing, but it's probably impermissible due to the CARES Act. I doubt EdFinancial is doing 0% because they care about former students struggling to pay down student loans.

[Carmella]

Could it be something like the nursing home corporation where I work? They didn't have HAVE to pay us if we got Covid or were exposed/had to stay home back when pandemic started because the CARES act DID NOT cover healthcare workers or front-line workers or companies with over 500 employees. It really stinks.

[eap82]

With EdFinancial student loans, the 0% interest is applicable to everyone including bankruptcy. Not sure why ECMC is doing what they're doing, but it's probably impermissible due to the CARES Act. I doubt EdFinancial is doing 0% because they care about former students struggling to pay down student loans.

Actually it's because my government owned loans were sold to ECMC who is a private lender. So without my consent my loans were transferred and no longer eligible for that benefit. Me, someone who had a covid related illness, was hospitalized and pushed into bankruptcy because I had no income and couldn't pay my bills for months probably needs that payment pause more than others. But because I'm in bankruptcy I don't' qualify. I've reached out to the student aid department at the government level to verify. I called student aid today and that's the reason. As it turns out ECMC has the choice and are choosing to continue to collect payments and interest.

[Carmella]

Actually it's because my government owned loans were sold to ECMC who is a private lender. So without my consent my loans were transferred and no longer eligible for that benefit. Me, someone who had a covid related illness, was hospitalized and pushed into bankruptcy because I had no income and couldn't pay my bills for months probably needs that payment pause more than others. But because I'm in bankruptcy I don't' qualify. I've reached out to the student aid department at the government level to verify. I called student aid today and that's the reason. As it turns out ECMC has the choice and are choosing to continue to collect payments and interest.

What a bunch of ......

I am sorry you have to deal with this.

[eap82]

ope2 I really hope you are able to recover those funds!

Carmella Thanks, it really seems like the student loan system needs a major overhaul. I was an 18 year old at a private college and no parental help, what did I know about debt? My parents gave me no insight or financial education at all so I listened to financial aid. They just sell you these loans and tell you worry about it later. Stupid.

[flashoflight]

Auto lenders don't let dealers pick customers with no consequence. Dealers are subject to a 1 to 6 month recourse where if the sub-prime debtor misses a payment, the dealer has to repay the lender regardless of whether the dealer is able to repossess the collateral.

The same thing should happen with student loans. Every student is sub-prime. Student loan reform is badly needed where the school needs to be required to do a 60 month recourse to the Dept of Education. This will make schools think twice about offering worthless degrees. If the school doesn't want recourse, they should convince a private lender to loan a student with no credit history in a questionable degree program. The current system doesn't work. Even public universities and Ivy League schools have loads of worthless degree programs.

[Carmella]

ope2 I really hope you are able to recover those funds!

Carmella Thanks, it really seems like the student loan system needs a major overhaul. I was an 18 year old at a private college and no parental help, what did I know about debt? My parents gave me no insight or financial education at all so I listened to financial aid. They just sell you these loans and tell you worry about it later. Stupid.

I don't even want to get started on student loans. When I read you were 18 yr old at a private college UGH! I never had student loans. I started paying out of pocket while I lived at home for free (but did most of the housework and even grocery shopping as my mom's health was not good) then when my father saw my success in college he offered to pay. I am thankful for that. We helped my daughter, so she only had minimal student loan debt and I helped her pick out classes to make sure every dollar spent paid for a class that transferred and went towards her degree. She was clueless and knew it and had no problem letting me give her advice. She's paid most of it back already but hasn't paid through the pandemic. I wish parents and school counselors were more aware of the college student loan debt. I was appalled with some of the people I knew through my daughter's school and how they were "helping" their kids choose a college and happy to get the kid out of the house more than anything else! I didn't mind my kid living at home and going to college since we live close to community college, one state university and a few private schools it works in my town. I was more into saving a buck than being an empty nester.

Financial Aid at college I am sure was just a front to get more students and loan $$ in their pockets, not to help the student, not your friend.

[mh321]

Hello all!

It has come to my attention that you are able to request a refund of any payments made toward Federal student loans during the Covid payment pause. (Yes, it is true, it's a thing and it is stated on the studentaid.gov website.)

I would love to be able to do this, as my Trustee pays them more than any other creditor each month. I am just too scared to do it. In case it went back to the Trustee, I can't imagine what kind of can of worms that would open up.

[Carmella]

I would love to be able to do this, as my Trustee pays them more than any other creditor each month. I am just too scared to do it. In case it went back to the Trustee, I can't imagine what kind of can of worms that would open up.

I agree I would be afraid to do this just incase it could cause a problem. The BK plan might state a dollar amount or percentage that goes to the student loan and if that is not met it could be a problem. Best thing is always to discuss with the attorney. Better to be cautious then get your case thrown out and have to deal with the creditors and more fees/interest, etc.