The PSLF Buyback Program allows you to “buy” missing payments that would have allowed you to qualify for loan forgiveness.
To qualify for the Public Student Loan Forgiveness, you must have 120 months of qualifying payments made while employed in a qualifying public service job.
However, if some payments were missed for specific reasons, and you would otherwise qualify for forgiveness, you can now make retroactive payments with the PSLF Buyback Program.
Requirements For The PSLF Buyback Program
To qualify for the PSLF Buyback Program, you must have 120 months of qualifying employment in a qualifying public service job. You must also have an outstanding student loan balance remaining.
You can buy back months when the you were in an ineligible deferment or forbearance status but otherwise eligible for PSLF by making payments that are the equivalent of what you would have paid if you had been in a qualifying payment plan during the deferment or forbearance period.
You must buy back enough months to result in forgiveness under PSLF or TEPSLF. Buybacks that do not complete the 120 qualifying payment count requirement are not permitted — and you cannot buyback months that are ineligible for credit toward PSLF.
You must have been in a repayment status during the months to be bought back. You cannot have been in an in-school or grace period, in default or bankruptcy, or in a total and permanent disability monitoring period.
Only months in the Direct Loan program can be bought back. FFELP loans are not eligible unless consolidated into a Federal Direct Consolidation Loan. You cannot buy back months prior to consolidation, and time periods prior to October 1, 2007, when the PSLF program started, do not count.
Amount Of The Buyback Payments
The buyback payments will be based on the lowest income-driven repayment monthly payment (or standard repayment, if lower) during the time of deferment or forbearance.
If you were in an income-driven repayment plan during the deferment or forbearance, the amount of the retroactive payments will be based on the lower of the two monthly payments before or after the deferment or forbearance period.
If you were not in an income-driven repayment plan, you will need to provide a copy of your federal income tax returns for each tax year during the relevant time periods. (If you were not required to file a federal income tax return, you will need to provide a statement to this effect.) You must also provide a statement listing your family size during each of the relevant time periods.
The lowest calculated income-driven repayment payment amount based on the tax returns during the deferment or forbearance period will apply to the PSLF Buyback Program. Otherwise, the standard 10-year repayment plan’s monthly payment will apply, if it is lower.
If you would have been eligible for a zero monthly payment, no payments will be required under the PSLF Buyback Program for the months during which you qualified for a zero monthly payment. This can happen when your income during the prior tax year was below a certain multiple of the poverty line.
For Parent PLUS loans, the PSLF Buyback Program amount will be the standard 10-year repayment plan amount unless the Parent PLUS loan is in a Federal Direct Consolidation Loan, in which case the Income-Contingent Repayment (ICR) plan payment amount will be used if it is lower than standard repayment amount. Note that Parent PLUS loans are eligible for PSLF but not TEPSLF.
Wait For IDR Payment Account Adjustment First
The one-time IDR payment count adjustment may increase the number of payments that count toward PSLF and Income-Driven Repayment (IDR).
The payment count adjustments include the following adjustments:
- Some months in forbearance, such as forbearances of 12 or more consecutive months or 36 or more cumulative months
- Economic hardship deferment
- Military deferments in 2013 or later
- Any months in a deferment, other than in-school deferments, prior to 2013
It is best to wait for the payment count adjustment before applying for the PSLF Buyback Program. The payment count adjustment may reduce the number of payments remaining before you qualify for forgiveness. The payment count adjustment should be complete during the summer of 2024, by July 1, 2024.
The PSLF Buyback Program allows those who have deferments and forbearances that don’t qualify for the payment count adjustment to have those time periods count toward forgiveness. You must have been working full-time in a qualifying public service job at the time and now be making payments corresponding to those time periods. You must buyback enough payments to reach the 120-payment requirement for forgiveness.
New regulations may retroactively count time spent in certain deferments and forbearances, these include:
- Cancer deferment
- Rehabilitation training program deferment
- Unemployment deferment
- Economic hardship deferment
- Military service deferment
- Post-active-duty deferment
- AmeriCorps forbearance
- National Guard Duty forbearance
- U.S. Department of Defense Student Loan Repayment Program forbearance
- Forbearances for up to 60 days to collect and process documentation relating to a borrower’s request for a deferment
- Forbearances relating to a national military mobilization or other local or national emergency.
Some borrowers aren’t waiting for the IDR payment count adjustment because they just want to be free and get the loan repayment obligation over with. Others worry that the program will go away under a new administration.
How To Apply For The PSLF Buyback Program
To apply for the PSLF Buyback Program, you should submit the PSLF Reconsideration Application.
You should select “Incorrect Qualifying Payment Count” and specify the start and end of the time period to be reconsidered. If there are multiple time periods, you should specify the start of the earliest time period and the end of the latest time period.
In the answer to the question about why the timeframe should be reconsidered, you should provide the following statement:
“I have at least 120 months of approved qualifying employment, and I am seeking PSLF or TEPSLF discharge through PSLF buyback. Please assess my eligibility for PSLF buyback.”
If you are eligible for the PSLF Buyback Program, you will receive a PSLF Buyback Agreement to pay the specified months as part of the buyback. It will specify the total buyback amount and you must pay the amount within 90 days of the approval date on the agreement.
You must continue to make loan payments until the buyback is approved and you have made the buyback payments. If the payments exceed the amount specified in the PSLF Buyback Agreement, the excess payments will be refunded to the borrower, assuming that the borrower has no other outstanding federal student loans.
For more information, contact the U.S. Department of Education, not the loan servicer.
Other Options
There will be an IDR Buyback Program (34 CFR 685.209, 88 FR 43820) that is similar to the PSLF Buyback Program (34 CFR 685.219, 87 FR 65904), but the months that can be bought back will differ. The IDR Buyback Program will not be available before the summer of 2024.
You are not eligible for the PSLF Buyback Program if you haven’t had 120 months of qualifying employment, but you can make a lump-sum payment to prepay for up to 12 months of future PSLF payments, until your next income-driven repayment plan certification date. These payments will count toward PSLF forgiveness once you have certified your qualifying employment with a qualifying employer during the 12-month period. Certification of qualifying employment cannot be done in advance.
The U.S. Department of Education also publishes a list of other student loan forgiveness programs at StudentAid.gov/forgiveness.
