Already paid off your student loans? How to still get forgiveness

Many student loan borrowers rejoiced when President Joe Biden announced an unprecedented $10,000 to $20,000 in student loan forgiveness for qualifying individuals on Wednesday.

However, some people who had previously paid off their loans the old-fashioned way were frustrated by the news.

For the most part, folks who already paid off their loans will not receive any retroactive reimbursement. However, individuals who paid their loans during pandemic-prompted moratorium, which started on March 13, 2020 and is still going on, can get a refund.

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Betsy Mayotte, president of The Institute of Student Loan Advisors, explains that anyone who qualifies for Biden’s forgiveness plan and paid down their federal loans during the pandemic can get those payments refunded and put back onto their balance. You can do this by simply calling your loan servicer.

“Just say ‘I’d like the payments I made during COVID back,' and they’ll say 'No problem,’” Mayotte explains.

As an example, let’s say you had $15,000 worth of student loan debt at the start of the pandemic and then got a raise and were able to pay off $10,000, meaning you were left with a $5,000 balance. Mayotte suggests calling your servicer and asking for them to refund you $5,000 of the $10,000 you paid. Your new outstanding balance would be $10,000.

Assuming you met the income requirements for forgiveness – $125,000 for a single person or $250,000 for married couples – you would end up getting your new outstanding balance of $10,000 forgiven.

Your student loan forgiveness questions answered

Once you make the initial step of getting the money refunded and put back onto your balance, Moyette suggests looking at your account to verify the new balance went up. Next, if your income information is already filed with the Department of Education, you’ll see the forgiveness kick in without doing a thing. If your income information is not on file, you’ll have to fill out a simple form that hasn’t been released by the Department of Education yet.

Moyette says a refund could take up to a few months.

The COVID-19 relief package, which became law in 2021, designates federal student loan forgiveness as tax-free through the end of 2025.