How does Public Service Loan Forgiveness work?

The Public Service Loan Forgiveness program is available to borrowers employed by government entities or qualifying not-for-profit organizations, with the opportunity to have Federal Direct Loans forgiven after ten years of qualifying income-driven payments, entirely tax-free. An important aspect of the PSLF program is income-driven repayment (IDR). If you have federal student loans, you will likely qualify for at least one of the government’s Income-driven (IDR) Repayment plans that aim to make borrowers’ monthly student loan payments more manageable based on their discretionary income. These programs include: Revised Pay As You Earn Repayment Plan (REPAYE Plan) / Saving on A Valuable Education Plan (SAVE Plan) Pay As You Earn Repayment Plan (PAYE Plan)* Income-Based Repayment Plan (IBR Plan) Income-Contingent Repayment Plan (ICR Plan)** *Only new enrollments from borrowers of consolidated Parent PLUS loans are being accepted into the ICR plan. No change for current enrollees. **New enrollments in PAYE are being accepted until further notice, but this plan will eventually be phased out. No changes for current enrollees. If you’re pursuing forgiveness through the PSLF program, you will need to enroll in one of these plans. For more details on the differences between IDR programs, see our Guide to Federal Student Loan Repayment Programs. An important distinction between the PSLF and IDR programs listed above is that if you’re enrolled in PSLF, you can qualify for forgiveness in ten years rather than the typical 20 to 25 years with IDR. Also note that there are currently proposed changes to the PSLF and IDR programs that could change eligibility, requirements, and potentially the amount of money you could save. Currently, there is a deadline for the one-time account adjustment for eligible IDR borrowers coming up at the end of 2023. Past periods of repayment, deferment, and forbearance may count toward your IDR forgiveness. For eligible borrowers seeking to take advantage of these changes, they must consolidate their commercially managed FFEL, Perkins, or Health Education Assistance Loan (HEAL) into a Direct Consolidation loan by the end of 2023.

How to apply for Public Service Loan Forgiveness

To pursue and qualify for PSLF, you must provide paperwork, including an Employment Certification Form (ECF) filled out by each eligible employer in your work history. But once you fill out your first ECF, you’re not done. You will need to re-certify your current employment and submit the form at least annually, as recommended by the Office of Student Aid. Note that if you change employers while you’re enrolled in the program, you will need to obtain certification from your new employer and submit the form again.

Is Public Service Loan Forgiveness (PSLF) right for me?

If you qualify, taking advantage of the PSLF program potentially means major savings for you, depending on the size of your federal student loans, income, lifestyle, and other personal financial factors. However, getting accepted and staying in compliance over the course of ten years until your forgiveness event takes time, effort, and organization. Changes to program eligibility and IDR requirements that happen periodically in response to economic and political events can be challenging to navigate. Additionally, if you are in a financial position to pay off your student loan debt faster than 10 years, it could be preferable to take that route and save money on interest. Unfortunately, once you’re in the PSLF program, you cannot make extra monthly payments to accelerate your forgiveness event. If you have questions about qualifying for PSLF, a student loan specialist at GradFin can help you understand all your repayment options, and help you determine if PSLF is the right program for you.

PSLF Buyback Program: FAQs

Learn about the PSLF Buyback program, including eligibility criteria and how to apply.

Published February 17, 2025 10 min read

What is the PSLF Buyback program?
Who is eligible for the PSLF Buyback program?
What does not qualify for the PSLF Buyback program?
Does the PSLF Buyback program apply to the SAVE plan for forbearance?
Are there any deadlines for applying for the PSLF buyback program?
How do I apply for the PSLF Buyback program?
How is the lump sum amount calculated?
What's next for the PSLF Buyback program?

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.

Does the PSLF Buyback program apply to the Saving on A Valuable Education (SAVE) plan for forbearance?

Yes, if your loans were placed into forbearance under the save plan and you were employed full time by a qualifying employer during that time, you can utilize the PSLF Buyback program to have those months count toward PSLF. This involves making a lump sum payment as outlined below.

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:

Submit your Employment Certification.

Eligible employment needs to be approved and covered over any deferment or forbearance periods that are needing to be reviewed.

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.”

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.