Student-loan borrowers will automatically receive refunds on pandemic-era payments if they qualify for Biden's debt relief

• The process for getting student loan payment refunds has been updated by the Education Department.

• Biden's debt cancellation will give borrowers refunds.

• They will need to call their servicer to begin the process.

The Education Department quietly posted new guidance for student loan borrowers.

Many borrowers who were unsure if relief was ever coming and decided to make payments during the payment pause wanted refunds after Biden announced $10,000 to $20,000 in debt cancellation for federal borrowers. Until this point, the department said that borrowers could call their student-loan servicer to initiate the process of getting their money back, but now that's no longer the case.

In an FAQ posted on studentaid.gov with details on accessing Biden's debt relief, the department recently added a refund section explaining that borrowers can automatically receive a refund if they make a payment during the pause.

• Through Biden's plan, you can apply for loan forgiveness.

• The voluntary payments brought your balance below the maximum amount of relief you would have been eligible to receive, but didn't pay off your balance in full.

If you had a balance of $10,500 before March 13, 2020 and made $1,000 in payments since then, you are eligible for $10,000 in relief.

If borrowers consolidate their loans before March 13, 2020, refunds are not available for payments made prior to that date, according to the department.

The application form for student loan forgiveness is expected to go live in early October and the department said it should take four to six weeks to process the forms and make the changes to borrowers' balances. The executive director of the Student Borrower Protection Center said in a statement that the automatic refunds are a positive and necessary step for fulfilling President Biden's historic promise to cancel.

He said that borrowers would be made whole if they made payments during the payment pause without having to rely on abusive and ineffective servicers. The Department understands the importance of automation and maximizes relief to borrowers. We want them to make Biden's debt cancellation all automatic.

Business Insider has an article on it.