The Public Service Loan Forgiveness (PSLF) Buyback program offers a pathway for borrowers to have certain periods of deferment or forbearance counted toward the 120 qualifying payments required for PSLF. If you are enrolled in PSLF and are expected to receive forgiveness, but there are some deferments or forbearances hindering that eligibility, then this program could be something to consider. Below are common questions and answers to help you understand this program.
What is the PSLF Buyback program?
The PSLF Buyback program allows borrowers to retroactively count periods of deferment or forbearance towards PSLF, provided they were employed full-time by a qualifying employer during those periods. To do this, borrowers must make a lump-sum payment equivalent to what they would have paid under an Income-Driven Repayment (IDR) plan during the deferment or forbearance.
Who is eligible for the PSLF Buyback program?
Eligibility criteria for PSLF Buyback includes:
- You have Federal Direct loans with a positive balance
- Your deferment/forbearance period(s) is after a Direct Loan consolidation disbursement
- You have the ability to make the required lump-sum payment
- You are employed full-time by a qualifying public service employer during the deferment or period
Eligible periods include those where you were in deferment or forbearance while employed full-time by qualifying employer. Common scenarios include economic hardship deferment or administrative forbearance.
PSLF Buyback program rules and requirements are subject to change. For the most up-to-date information, visit studentaid.gov.
What does not qualify for the PSLF Buyback program?
It’s important to note that not all deferment or forbearance periods are eligible – only those where you were in qualifying employment can count.
Circumstances that are not eligible for PSLF Buyback:
- You have loans that are paid in full or discharged
- You have a deferment or forbearance history on loans that were paid off due to consolidation
- Student loan default
- Bankruptcy
- Typically, periods of in-school deferment or grace periods are typically not eligible.
Are there any deadlines for applying for the PSLF buyback program?
While there isn’t a universal deadline, it’s advisable to apply as soon as possible after completing 120 qualifying payments including any bought back periods. Timely action ensures that all qualifying payments are accurately counted towards forgiveness. For personalized guidance consult your loan servicer or visit the Federal Student Aid website.
How do I apply for the PSLF Buyback program? How do I submit a buyback request?
Federal Student Aid should inform you about the specific steps and documentation required for submission to the Student Aid website:
1
Submit your Employment Certification.
Eligible employment needs to be approved and covered over any deferment or forbearance periods that are needing to be reviewed.
2
Submit the Reconsideration Request.
Submit the reconsideration for qualifying payment on the student aid website. Include the required verbiage: “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.”
3
Make the lump sum payment.
Pay the calculated amount based on what you would have paid under an IDR plan during the deferment or forbearance period within 90 days.
How is the lump sum amount calculated?
The lump sum payment is determined by calculating the amount you would have paid under an IDR plan during the deferment or forbearance.
- If you were on an IDR plan immediately before or after the deferment or forbearance: The payment is based on the lower of the two monthly IDR
- If you were not on an IDR plan before or after: You will need to provide tax information for the relevant years to determine the IDR payment amount.
The payment amount will be the lowest IDR amount you were eligible for at the time. If the 10-year standard payment is lower than the calculated IDR payment, the standard payment amount will be used.
How is the lump sum amount calculated?
The lump sum payment is determined by calculating the amount you would have paid under an IDR plan during the deferment or forbearance.
- If you were on an IDR plan immediately before or after the deferment or forbearance: The payment is based on the lower of the two monthly IDR
- If you were not on an IDR plan before or after: You will need to provide tax information for the relevant years to determine the IDR payment amount.
The payment amount will be the lowest IDR amount you were eligible for at the time. If the 10-year standard payment is lower than the calculated IDR payment, the standard payment amount will be used.
Is the PSLF Buyback program going to go away?
The student loan policy landscape is ever-changing. For the most up-to-date information, visit studentaid.gov.
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