Why a student loan borrower is still waiting for a $5,000 refund

• Roxanne Dougherty made payments on her college debt during the break early in the pandemic.
• After Biden announced sweeping debt relief, she asked for a refund of her $5,000 voluntary payments.
• Six months later, she’s still waiting – and couldn’t get any help from her servicer.

Roxanne Dougherty has always made sure to keep her student loan payments on track.

After graduating from public school in 2014, Dougherty — after receiving a Pell scholarship — had about $25,000 in student debt that she paid off immediately. She only missed one payment on her loans when she left college, and Dougherty said it hurt her credit report right off the bat. Since then, she has always tried to pay them back as soon as possible.

“Even if they say I don’t have to pay, I still pay because I’m so scared of the consequences,” Dougherty, 31, told Insider.

For this reason, she continued to make payments on her student loans when President Donald Trump first instituted the payment pause in March 2020 to relieve borrowers from the financial burdens of the pandemic. She wanted to use the 0% interest on her loans during the break to drain her balance, and she now has just over $10,000 in student debt after making about $5,000 in payments during the break, according to documents viewed by Insider.

But President Joe Biden’s announcement in August of up to $20,000 in student debt relief changed things for Dougherty. Federal Student Aid reiterated at the time that borrowers who made payments during the hiatus could get a refund of those payments by contacting their student loan servicer. The process was estimated to take six to 12 weeks, and borrowers with less than $10,000 in balances who made payments during the hiatus would be automatically reimbursed.

Dougherty seized the opportunity and in September filed for a refund with her student loan company, the Missouri State Higher Education Loan Authority.

A month later, she decided to consolidate her eight federal loans into two, believing it would benefit her credit rating. She later feared it would affect her refund and said she asked for her consolidation request to be canceled. But after checking multiple times with MOHELA regarding the status of her refund, the only communication Dougherty says she received from the company was that her consolidation request had gone through.

Now she’s wondering if she’ll get the $5,000 she was promised back — on top of Biden’s sweeping student debt relief.

“I’m 31. I’m trying to invest in myself with a house and starting a family soon, but we’re really limited with how the economy is today, how the housing market is and all that,” he said Dougherty. “Five thousand dollars would really help our situation right now and relieve us of the stress we’ve been going through since deciding on the house we just bought.”

MOHELA did not respond to a request for comment. The Department of Education referred insiders to refund guidance posted on Federal Student Aid’s website.

“No one takes the time to help me”

Dougherty is far from alone in her student debt limbo. Millions of federal borrowers are waiting to see if the Supreme Court will uphold Biden’s student debt relief plan, which was suspended in November. In light of the lawsuits, Biden extended the student loan payment pause for 60 days after June 30 or 60 days after the lawsuits are settled, whichever comes first, meaning there is a possibility that payments could resume without relief.

The uncertainty surrounding the relief and whether she will receive her refund has prompted Dougherty to make her payments.

“I just don’t know if the Biden thing is actually going to go through and I’ve been paying for so long,” she said. “When you leave college, you’re told to pay that off until it goes to zero, so I do that. I just keep paying it off. I don’t want to stop hoping for anything else. If something comes along that gives me that relief, so be it.”

But she hasn’t stopped trying to get help from MOHELA and other federal agencies to recoup payments she voluntarily made. In January, she called MOHELA twice and was unable to get in touch with a customer service representative, she said. In March – six months after requesting a refund – she was on hold for almost two hours before she had to hang up to practice volleyball.

“No one takes the time to help me or listen to me when it comes to MOHELA,” Dougherty said. “It’s just so bizarre and it’s sad that I have to try to find another way.”

Insider reported in October that MOHELA’s hours-long waits have kept borrowers from getting even simple questions answered.

Scott Buchanan, the executive director of the Student Loan Servicing Alliance — a group that represents federal loan servicers — told Insider at the time that the Department of Education “decides how many resources and how much staff to pay to have them on the phones.”

“So this is not surprising in the sense that unless the department provides additional financial resources, there is no way that they can provide additional staff,” Buchanan said.

Biden called for additional funding for the Federal Office of Student Assistance in his latest budget proposal, but given the Republican majority in the House of Representatives, Congress is unlikely to agree.

Dougherty has now contacted MOHELA, the Department of Education, the Better Business Bureau, the Consumer Financial Protection Bureau, Federal Student Aid and the Federal Trade Commission — and none of those agencies have helped her figure out what’s up with her refund.

“It just seems like there’s something they can’t help,” Dougherty said. “That’s how it feels.”

Still waiting for your student loan payment refund? Do you have any other concerns about student debt? Share your story with this reporter at asheffey@insider.com.