"In essence, it seems that the "student loan" isn't a student loan anymore but just a regular loan."

You withdraw funds meant for school, but didn't pay off the loan, so unless the costs of the loan (and school) are more than that withdrawal, of course you cannot write off the interest, and you can't take out more 529 money later to repay the loan, because:

You already took that amount for that supposed reason out of that account; and,

You already got "repaid" for the loan, by your initial withdrawal, so you don't also get to write off the interest as a double benefit.

What you have, in essence, as the Net, is: borrowed as school loans, then used that as an excuse to remove 529 funds falling under the tax-free umbrella, but then you didn't follow through. You don't get two shots at the same benefit.