Fact Finders: You paid off your student loan. Do you qualify for debt relief?
It’s estimated 40 million Americans could see their student loan debt reduced.
SPRINGFIELD, Mo. (KY3) - President Biden’s Student Loan Relief Plan is sparking several questions from our viewers. This is one of them, “If you paid off your student loans during the pandemic, are you still eligible for student loan forgiveness?”
Update: The application for student loan debt relief is available. Apply for Federal Student Loan Debt Relief here.
President Joe Biden’s student loan forgiveness program will provide millions of Americans with $10,000 in student debt cancellation. For federal Pell grant recipients, that amount is even higher: it’s $20,000. To qualify, your income must be below $125,000 a year. For households, the cap is $250,000.
It’s estimated that 40 million Americans could see reduced student loan debt. And millions of borrowers are eligible for automatic forgiveness because the Department of Education already has your income information. For everyone else, sometime in October, an application will be made available for student loan forgiveness.
We talked to Drury’s Executive Director of Financial Aid about what happens under the relief plan when you’ve paid off your student loan.
“If you made payments on or after March 13 of 2020, when the pandemic officially began, then you are eligible to ask to have those payments refunded to you. So, let’s say you took advantage of the 0% interest during the pandemic, and the student loan pause, you paid off your loans, because everything went to the principal at that time, you can ask for those payments back,” explained Ahrens.
“If you made any payments during that period to your federal student loans, you could get that refunded to you,” added CEO Peter Dunn of Your Money Line. “I also have to note that student loan forgiveness is not 100% going to happen. I mean, there is a slight chance that it gets caught up in the courts or, you know, it gets waylaid. That is a possibility. Right? So, there’s a one or 2% chance that this whole thing falls apart. But as of now, that window I detailed is the rule.”
Again, remember that the date of March 13, 2020, is significant. Ahrens tells us that if you paid off your student loans before the pandemic, you are not eligible for loan forgiveness.
If you have further questions, On Your Side’s Ashley Reynolds answered several questions and mentioned you don’t have to pay for student loan forgiveness. Don’t fall for a scam.
You can also always contact your loan servicer.
Circling back to the question, “If you paid off your student loans during the pandemic, are you still eligible for student loan forgiveness?”
The answer is yes if you meet the requirements we’ve mentioned.
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