I already paid off my student loans! Am I eligible for a refund and loan forgiveness? Yes, up to $20K — but only under these 2 specific conditions
If federal student loans hang over your head, you’ll no doubt see good news in the Student Debt Relief Plan proposed by the Biden administration.
If you owe $25K+ in student loans, there are ways to pay them off faster
Too many Americans are still missing out on cheaper car insurance
A TikToker paid off $17,000 in credit card debt by ‘cash stuffing’ — can it work for you?
That’s five-digit good news, as you may land up to $20,000 to pay off current eligible balances.
But what if you’ve already paid off your loans? Can you cash in on some of the government loan forgiveness money? The answer is yes — but it depends on a few important factors.
Forgiveness — for some
First off, as with so many things in life and finance, timing is everything. With the forgiveness program, if you made or are making payments on eligible loans when the government paused payment requirements and interest accrual (between March 13, 2020 and Dec. 31, 2022) then you fall within the window and qualify for forgiveness.
But debt cancellation is only available for public loans, meaning loans held by the U.S. Department of Education.
To qualify for forgiveness, you’ll have to have made payments during the freeze period and have an eligible public loan.
Per the Federal Student Aid site, certain qualifying loans include:
Federal Family Education Loan (FFEL) Program loans held by the U.S. Department of Education (defaulted and non-defaulted)
Government-held Federal Perkins loans
Government-held Federal Family Education Loan Program loans
Some defaulted loans
What to do if you’ve already paid down your loan
Any borrower who took advantage of the pause on payments and interest accrual during COVID-19 to pay down their debt can request a refund now. The refunded amount will reappear in your account as a loan balance.
According to the Department of Education, all you need to do is contact your loan servicer to request the refund.
Applications for loan forgiveness are expected to be available by mid-October. But since it could take some time for the change to be reflected in your account, borrowers who want payments refunded should think about starting that process soon.
Claiming your forgiveness
Keep in mind that the forgiven amount is capped at what you owe — or owed until you paid it off during the pause. For example, if you have an outstanding loan balance of $6,000 and you qualify for up to $10,000 canceled through the program, your $6,000 loan will be canceled and that’s that.
If you owe $13,000 and qualify for $10,000 canceled through the program, you’ll now have a loan balance of $3,000 after the forgiveness amount is applied.
But let’s say you paid off the last $15,000 on your account before you knew you’d qualify for $10,000 of forgiveness. You can ask for a refund, but keep in mind that by reopening your account, you will have to start repaying that balance — with interest — once the pause ends on Dec. 31.
And since it could take months for the forgiveness to be applied, you could be on the hook for regular payments until that comes through.
What to read next
High prices, rising interest rates and a volatile stock market — here’s why you need a financial advisor as a recession looms
You could be the landlord of Walmart, Whole Foods and Kroger (and collect fat grocery store-anchored income on a quarterly basis)
Get the latest personal finance news sent straight to your inbox with the MoneyWise newsletter
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
After many months of rumors and significant pressure from his left flank in the Democratic Party, President Joe Biden recently announced a plan to relieve the student debt pressure that many younger adults say is keeping them from achieving their … Continue reading → The post Here’s How Biden’s Student Loan Forgiveness Can Boost Your Retirement and Financial Stability appeared first on SmartAsset Blog.
Congressional Democrats want to slam shut a tax loophole known as the “backdoor” Roth IRA. In one of several proposed changes that target the retirement accounts of wealthy Americans, Democrats on the House Ways and Means Committee want to prohibit people … Continue reading → The post Democrats Want to End This Lucrative Retirement Account Loophole appeared first on SmartAsset Blog.
In a world where the stock market is unpredictable and interest rates are rising, many investors are looking for someplace to put their money that is as close to risk-free as possible – even if it means forgoing the chance … Continue reading → The post How to Buy More than $10,000 in I Bonds Through This Loophole appeared first on SmartAsset Blog.
Since President Joe Biden announced his plans to cancel up to $20,000 in student loan debt for qualifying Americans last month, people have been wondering: When can I apply? See: 5 ‘Shark Tank’ Fails…
What’s going on in the markets lately? Since the start of this year, we’ve seen a prolonged bearish trend, and now a cycle of high volatility. Investors can be forgiven for feeling some confusion, or even some whiplash, in trying to follow the rapid ups and downs of recent weeks. One important fact does stand out, however. Over the past three months, since mid-June, we’ve see rallies and dips – but the markets have not seriously challenged that mid-June low point. Examining the situation from re
If you’ve been thinking about converting a traditional IRA to a Roth IRA, here’s the good news: This year’s market turmoil may be giving you a golden opportunity to do it. “Lower markets present opportunities to make Roth conversions with a lower tax impact,” Mark Wilson, the president of Mile Wealth Management in Irvine, Calif., tells me. Roth IRAs are retirement accounts on which you’ve already paid all the tax.
As part of our recent 2021 Environmental, Social, and Governance Report, KeyBank outlined several commitments it has made to fostering diversity, equity and inclusion in both its enterprise and in …
Border apprehensions exceed 2 million this year: Enforcement increases as GOP buses migrants elsewhere
The number of arrests or detentions of migrants at the border this fiscal year remains at a record high, according to data released Monday — as Republicans level sharp criticism at the Biden administration, even as the White House says it is working to humanely manage immigration and stresses its limited influence over those seeking to enter the country. U.S. Border Patrol’s apprehensions of migrants have exceeded 2 million so far this fiscal year, including people who turn themselves into authorities between land ports of entry, according to agency data. With more than a month still left in the fiscal year, the number of apprehensions marks a significant increase from 2021.
A newcomer to the sportscasting space might be tasked with chronicling a bit of Major League Baseball history. Now that Aaron Judge has slugged home run No. 60 for the season, the New York Yankees outfielder is just one dinger away from matching Roger Maris’ all-time American League record, and two away from breaking it. […]
The Biden administration’s student loan forgiveness plan will provide financial relief to about 43 million federal student loan borrowers, according to White House estimates. For those in default of…
The Wall Street Journal
Ralph Lauren started out as a tie business 55 years ago before it eventually became known for its iconic polo shirt. The brand now wants to keep the spirit of that expansion going, setting its sights on women’s apparel and less penetrated cities such as Atlanta and Houston. At an investor day on Monday, Ralph Lauren set out a target to grow revenue at a compound annual growth rate in the mid- to high-single-digit percentage range over the next three years, a clear upgrade from its 0.15% CAGR over the past four years.
Retirees don’t accurately understand their risks in retirement, according to a recent analysis from the Center for Retirement Research at Boston College. The brief, authored by Wenliang Hou, finds a disconnect between how retirees rank perceived risks and their objective … Continue reading → The post Retirees Don’t Know Their No. 1 Retirement Risk: Advisors Can Help appeared first on SmartAsset Blog.