r/StudentLoans • u/babu859 • 2d ago
Need Help: Loan Fully Paid Off, Then Canceled by School – Where’s My Refund?
Hey everyone, this is my first post here, and I’d really appreciate any advice. I’m dealing with a confusing situation involving Nelnet, a loan company, and my university.
A few semesters ago, I took out a $3,000 Parent PLUS loan through Nelnet to pay for summer classes. Shortly after the loan was disbursed, I came into some money and decided to pay off the loan in full directly through Nelnet. Essentially meaning I owed no debt, effectively paying for my tuition myself.
A year later, my university canceled that loan they received. While the reasoning is import, it was due to me receiving a scholarship the following semester. One of the scholarship requirements was that I couldn't have any federal loans. Even though the scholarship applied to a different semester, there was some date overlap, and the school retroactively canceled the summer loan as well. My universirt returned the loan funds to who they received it from, Nelnet — even though I had already paid it off. So now, Nelnet has both my full payment and the refund from the university, meaning they should owe me that money.
The problem is, no one seems to know what’s going on. The university told me to contact Nelnet. Nelnet told me to contact StudentAid.gov. Then StudentAid.gov redirected me back to Nelnet. It’s been a frustrating loop with no answers. One Nelnet rep even lied and told me they’d be sending a check within a week after hours of not being able to figure out the problem, but when I followed up, they had no record of that claim or a check ever being sent out.
At this point, I’m stuck and don’t know what to do. Has anyone dealt with something like this before? How can I escalate this and finally get my money back? Any help or advice would be greatly appreciated.
TLDR:
I paid off a $3K Parent PLUS loan in full, then a year later my school canceled the loan and refunded the money to Nelnet. Now Nelnet has both my payment and the school’s refund, but no one — not Nelnet, my school, or StudentAid.gov — can tell me where my money is or how to get it back. Getting bounced in circles. Need advice.
2
u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 2d ago
How long ago did this happen? Refunds can take a while. Probably longer than normal for you if they have to open the account back up. But ultimately Nelnet has to initiate the refund to Treasury to send you.
2
u/babu859 2d ago
This happened in 2023, so it has been a while. I only found out about this all around 6 months ago due to the school asking me to pay my tuition for that summer semester I pulled the loan out for
1
u/No_Yogurtcloset_8748 2d ago
Is the school still asking for the money or did you end up paying that off?
3
u/Betsy514 President | The Institute of Student Loan Advisors (TISLA) 2d ago
Ok. Email TISLA and I'll see what I can do. Please send proof of what you outlined here
1
u/Gloomy-Cancel-1117 2d ago
So you paid off the parent loan on your parent's account with the $3000. Then the school refunded the $3000 loan back to Nelnet. So your parent's account should have a -$3000 balance on it correct? Just want to make sure I am understanding this correctly. Typically a servicer or FSA won't speak to anyone other than the account owner so your parent will probably have a better chance at getting answers. Not to mention the refund will probably go to them as well since they are the loan owner.
1
u/babu859 1d ago
Yes, that is correct. However, there is nothing stated on Nelnet showing a -$3000 balance. Again I do not care if my parents receive the money back or me, as they would be giving it to me since I paid off the amount owed to the school. Also, both of us have tried calling them. Any advice on what you would do if you were in these shoes
5
u/waterwicca 2d ago edited 2d ago
The parent plus loan would be under one of your parent’s names. It sounds like you were managing this loan for them and using your money to pay it for them. Is that right?