Tuesday, November 12, 2013

A Follow-up on Paying Off My Student Loans

To recap:
I took out federal student loans to pay for grad school.
I saved up over time to pay them off before interest kicked in (or so I'd planned, and then the laws changed and interest started accruing on the second year of loans while I was still in school).
I asked FedLoan for a payoff amount. They gave me a number.
I paid off all of my loans in one big chunk, a couple of weeks before I graduated. That felt awesome.

CC Gwyneth Anne Bronwynne Jones (Flickr)

And now, 6 months later, the final chapter.

As it turned out, the payoff amount FedLoan quoted me was not 100% correct. I happened to be in the unusual circumstance of paying off my loans early -- so early that the most recent loan amount had been disbursed (in January) less than 120 days before I made the payment. By an interesting loophole, that put me in the same boat as, say, a student who had quit school in the second week of the semester, dropped all her classes, and returned the loaned funds to FedLoan. FedLoan considered it a cancellation rather than a simple repayment. And THAT meant that I didn't have to pay any interest on the most recent loan disbursement.

CC Matt Herzberger (Flickr)

Well. Sort of.

I sent FedLoan the amount they asked for at the beginning of May, by initiating an ACH transfer through my bank. They let me know about a month down the line that I had overpaid and now had a credit of about $300 on my account. I had to email and then call FedLoan to get an explanation of the "cancellation" situation. Then I was told that I couldn't receive my refund via ACH transfer; it had to be with a check mailed to me. And that it would take 2-3 months. Because it "had to go through the U.S. Treasury Department". Um. Okay.

And then nothing happened in 2 months. I made some more calls to follow up. I talked to someone at FedLoan who apparently didn't see this kind of thing very often, but looked up the process and explained some more. I was given a number to Direct Loan, where a knowledgeable but bemused person told me that they didn't handle my loan -- that was FedLoan. Who had given me their number. They told me to wait another 6 weeks for processing. I even emailed the U.S. Treasury (after finding out that the phone numbers on their website were disconnected) and asked if they could direct me to the right department (they publicize the department that handles tax refund checks, but student loan refunds are another animal). That got me a toll-free number for the Department of Education, which wasn't answering the phone during the government shutdown (happened to be the timing).

After coming back from vacation, things stalled on my end. I had trouble finding time to make a lengthy phone call during their hours of operation (as they're closed by the time I get off work, and our office is currently undergoing construction and doesn't have any private rooms available during the day). On Monday I fired off a slightly-exasperated email to FedLoan, explaining the situation and what I'd gone through to find a way to get back MY money that had only been paid to them through THEIR error. I received an auto-notification that my message had been received and would be responded to within 2 business days.

And then that evening I opened my mailbox and found a check for $310 from the U.S. Treasury Department, dated last Wednesday.

CC Serena (Flickr)

6 months later -- almost to the day -- I have my money back in my hot little hands. I'd previously decided that since I'd originally saved it to pay for my Master's, I ought to spend the refund on something related to my professional development. That was going to be my new suit and library-appropriate clothing I bought in June, but then most of that ended up being a combination birthday/graduation gift from my mother. And I've long since paid off the bill for the rest. Maybe the money should go into my IRA instead. Or toward a library-related webinar or some specialized training once I have a library job. Any ideas?


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  2. I just requested a refund from FedLoan, so I'm trying to understand what happened to you. You were told to wait 2-3 months... so you waited 2, called, and were told to wait another 1.5... then 6 months later (the same evening you sent an email) you got your check? The email would have to be unrelated, so what did you actually do to get your check? Did it just arrive unexplainably late?

    1. Pretty much. I paid in May and they cut the refund check in November. On my first successful contact (June), they told me to wait 2-3 months (would have been Aug/Sept); the later call said to wait 6 weeks from that call (would have been late September). I don't know whether the process was initiated automatically in June when they sent me the email about the balance credit and just took 5-6 months, or whether one of my calls actually got the refund started. Good luck with yours!

  3. I've been waiting for FedLoan to refund a $1,000 overpayment since November 2015. Every time I contact them, they tell me that the refund has been sent - they just keep giving me new (more recent) dates on which the refund supposedly was sent.


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