After President Biden said he would cancel up to $10,000 in federal student loan debt for people earning less than $125,000 a year, or $250,000 for couples, and up to $20,000 for Pell Grant recipients. Borrowers have started to inquire about refunds. Among the questions: What if they paid off their loans during the pandemic? Are they still eligible for cancellation? how does that work?

This way: Suppose you paid off the remaining $8,000 of your loan during the pandemic. You can demand a refund of that money and then apply for debt relief to clear your ledger. Then you can cancel the loan while keeping $8,000. That is, if you meet the eligibility criteria.

Who is eligible for the new plan to cancel $10,000 student loans?

Most of the nearly 42 million people covered by the suspension have not made payments since its inception, but about 9 million borrowers in good standing continue to send money, according to the Department of Education. The borrower can apply for a refund for one year. The agency has confirmed that eligible persons who have paid off some or all of their debts in the last two and a half years may be eligible for cancellation if they meet the income criteria.

But the education ministry’s website doesn’t say much and borrowers should be hesitant, said the Student Loan Servicing Alliance, a trade group representing companies that collect education debt payments. said Scott Buchanan, executive director of

The Department of Education’s website states, “There is no guidance on how refunds will work in relation to forgiveness. Buchanan said his members have been receiving a “high volume” of refund inquiries recently. Some student loan servicers put the number in the tens of thousands. I’m here.

Calculate how much student loan debt you can forgive

“The sudden resurgence of interest in these reimbursements is part of a renewed faith in the student loan system,” said Michael Pearce, executive director of the Center for Student Borrower Protection. said it spoke with a borrower who attempted to submit a written request early in Refunded and ignored. “I don’t want to make fun of everyone who’s telling people this is reliable because of servicer capacity issues,” Pierce said.

Some payments made during the freeze were involuntary. This is the result of the department continuing to seize wages from borrowers who defaulted early in the pandemic. Some borrowers, especially those working on loan forgiveness for public services, continued to pay out of disbelief.

Others, like Gray and Lauren Cole, have seen an opportunity to eliminate debt without paying interest. and spent paying off a $40,000 student loan that I acquired while studying ministry.

User Experience Designer Lauren Cole, 32, said: “We were already working hard to pay off our debts and kept our commitments.” Lauren said she was happy to have a friend to benefit from when she learned of Biden’s cancellation plans. I said I was in it, but I didn’t think I was in it.

That changed after I found a tweet from the Center for Student Borrower Protection encouraging people who made payments during the suspension to request refunds. Nonprofits that have advocated debt cancellation have told borrowers to apply for reimbursement before applying for forgiveness.

Last Friday, Coles called Gray’s servicer and a representative said it would take six to 12 days. It took weeks to process the request and return the $10,000 he had paid for his debt. “It was a little shocking at first, especially how easy it was,” said Army Chaplain Gray. “The woman looked into her account and said, ’10 grand refunds were granted,'” she said. “