Earlier this year, President Joe Biden approved sweeping student debt cancellation for federal student loan borrowers. The plan faced immediate legal challenges. The White House has battled many of those lawsuits and won. A few are still pending, but they’ll likely fail due to a lack of standing.
Once the legal charade ends, the Biden administration will proceed with this one-time federal student loan forgiveness opportunity, which the president claims will be a “game changer” for the 40 million Americans who stand to benefit.
Not one dime of this federal student loan cancellation will go straight to private student loans — even though private student loan borrowers represent about 8% of the $1.71 trillion total outstanding student debt in the US.
There is a workaround, however. If you refinanced your federal loans with SoFi or another private lender during the pandemic, you might qualify for some forgiveness indirectly.
Related: Can Refinanced Student Loans Be Forgiven?
Here’s how that works.
Borrowers who paid off their student loans in the last two years may be eligible for a refund if they are qualified for the president’s cancellation, according to the Education Department. The loans listed in the application are paid off via refinancing. So, if you refinanced your loans during the pandemic and qualify for the cancellation benefit, you can get your money back.
You’d get up to $10 thousand if you got a Pell Grant, which is a type of aid available to low-income undergraduate students, and up to $20 thousand if you did.
Visit the Federal Student Aid website, StudentAid.gov, to check if you got a Pell Grant and to apply for the relief. The Department of Education has already approved the applications for 16 million borrowers. It plans to apply the forgiveness to borrowers’ loan balances before the end of the year.
Learn More: Student Loan Forgiveness Programs