Student loan forgiveness: Paid off loan? You may still be eligible for up to $20,000 refund

Applications for loan forgiveness  will be available by mid-October and, once that is complete, the borrower can expect to see the loan adjustment in 4-6 weeks, before the scheduled payment restart of Dec. 31st. Loan payments have been on hold since March 2020, the start of the COVID-19 pandemic.

What if you’ve already paid off your loan?

The debt relief plan only applies to borrowers who currently have a loan balance but any borrower who made a payment on their student loans since the start of the moratorium is eligible for a refund.

From the Department of Education Office of Student Loans: “You can get a refund for any payment (including auto-debt payments) you make during the payment pause beginning March 13, 2020.”

Borrowers are advised to contact their loan services to request their payment be refunded. To do so, eligible borrowers will have to request their balance be restored and then apply the forgiveness to that amount. The amount of the relief is capped at the level of the outstanding debt, the department noted, so there won’t be a refund for the difference of the restored amount and the $10,000 or $20,000 allowed.