If you took out student loans for school but never graduated, you should have had a specific refund. If you did not receive that refund, you may be owed money! The great part is, the cash owed to you also will have earned interest over the years; you may be owed a nice chunk of money! #debt #debtsnowball #money #personalfinance #studentloans #financialfreedom

Student loans are complex, highly regulated instruments, that have an enormous amount of regulations, legal rulings, and case law, behind them.  A superficial understanding of student loans is easy – you pay interest and may have the ability to consolidate them.  You may have even heard of student loan forgiveness – I know people who think they are student loan experts merely because they know that student loan forgiveness exists.

Just because you know about one or two factoids about student loans doesn’t mean you truly understand them.  You likely only have superficial knowledge about them – don’t assume your superficial understanding is a complete understanding.  (by the way, I regard myself as only have a superficial understanding – I am by no means a legal expert)

This article explains a fairly unknown provision entitled to anyone who dropped out of school during a semester.  Hopefully this article will help open your eyes to realize there are areas of the student loan world you have no idea about.  There are programs and laws protecting you as a debtor that you need to know about, and you likely have never heard of.

Today, we explain the unpaid refund discharge, and why you need to know about it if you dropped out of school 1986 or after.

Unpaid refund discharge

The student loan unpaid refund discharge is a refund you should have received if you dropped out of school after the law was passed in 1986.  After dropping out, you should have been refunded the proportional percentage of the semester you dropped out as long as you attend 60% or less of the semester.  In layman’s terms – you get some money back if you dropped out within 60% of a semester.  If your school did not properly refund the proportional percentage of your last semester’s payment – that money is owed to you, along with potential interest and fees.

For example, say you paid $2,500 for a semester of tuition.  If you dropped out of school within the first 25% of your semester, your lender should have been paid back 75% of your semesters tuition payment.  This would equal a total of $1,875 that you should have been refunded.  If you were not refunded that money, you are still entitled to it and should take the appropriate steps to request that refunded money.  Interest and fees are also possible to recoup as well.

How to Apply

You can apply by using the form at the – U.S. Department of Education website

Search for the unpaid refund cancellation form.

You may be entitled to other protections

Certain states may have provisions that may benefit you as well.  If you really think you fit into this, you should seek professional help.

You can read my student loan page which provides some details on who you can speak with: Stock Street’s Student Loan Debt Page

What else do you not know?

If this is a protection you did not know about, I’m here to tell you this may not be the only one.  There are many other protections in place for debtors with public student loans; you may have choices available to you that you don’t even know about.  For this reason, I suggest you go through this analysis to check if you have other protections and programs available to you.  The worst thing that will happen is that the analysis will not find any special protections for you and lost $39.99.  The best thing that will happen is you uncover programs or protections that save you thousands of dollars.  Maybe I’m biased, but I think $39.99 is worth the potential to save thousands of dollars.

Thanks for reading!


Disclaimer: These are the ideas and opinions of the author.  The author is not responsible for the actions of those who read the posts on this blog.  Each individual reader has a unique situation and unique needs.  This blog is not intended to solve those unique situations of the readers.  This blog is not liable for decisions made by the readers of this blog.  I am not a lawyer and this is not legal advice.

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