Currently, there are approximately 74,000 borrowers with federal student loans who are also waiting in an expanding queue for processing under a program called the Public Service Loan Forgiveness (PSLF) Buyback. This program allows participants to accelerate their progression toward loan cancellation by counting certain non-payment periods back in time. The PSLF program, which was designed in 2007 during the presidency of George W. Bush, cancels a borrower’s remaining balance on a federal student loan after 10 years of full-time employment at a qualifying government or nonprofit organization and 120 qualifying monthly payments.
Over 74,000 federal student loan debtors are caught up in a backlog of applications for a popular loan forgiveness program.
That option, Public Service Loan Forgiveness Buyback, enables debtors seeking PSLF to have their debt forgiven sooner than they would have imagined. PSLF, which was signed into law by President George W. Bush in 2007, provides debt forgiveness to persons who have worked for a decade for specified non-profit organisations or the government.
According to a new court filing, there is a 74,510-person backlog of borrowers waiting for the United States Department of Education to complete their repurchase petitions as of August 31. This is an increase from 72,730 borrowers in July and 65,448 at the end of June. Only 5,600 repurchase petitions were handled in August, according to the filing.
Ellen Keast, deputy press secretary at the Education Department, said that the Biden Administration’s Public Service Loan Forgiveness buyback scheme allows borrowers to ‘purchase’ entry into the program, thereby weaponising a lawful discharge plan for political objectives. “The Department is working its way through this backlog while ensuring that borrowers have submitted the required 120 payments of qualifying employment.”
As part of the American Federation of Teachers’ lawsuit, the Education Department has disclosed data on outstanding repurchase requests on a regular basis. The teacher’s union claims the agency is denying borrowers their rights.
PSLF Buyback applications pile up under Trump
The Biden administration originally proposed PSLF buyback in the summer of 2023.
Borrowers who have completed 120 months of eligible public service work may request that the Education Department retroactively pay for—or “buy back”—any months they missed due to a forbearance or postponement. Borrowers often do not get PSLF credit during payment interruptions.
The Buyback scheme gained popularity when the courts halted the Biden-era Saving on a Valuable Education, or SAVE, proposal in the summer of 2024. Millions of student loan borrowers who signed up for SAVE were automatically put in a forbearance throughout the judicial struggle. Those borrowers’ progress towards PSLF was halted during the payment stoppage, even though they continued to work in qualifying public service.
Applications have piled up during the Trump administration. In March, Trump administration officials fired almost half of the Education Department’s employees, including those who supported borrowers.
Student loan borrowers should still apply
Despite the PSLF repurchase delays, “if you are eligible, there’s no harm in submitting the application,” said Nancy Nierman, assistant director of New York’s Education Debt Consumer Assistance Program.
“But if you can afford payments in other repayment plans, don’t rely solely on the Buyback to get you to 120 qualifying payments, particularly if you only need a few months of credit to reach forgiveness,” she told the audience.
You may apply for buyback while simultaneously submitting documentation to change your repayment plan. However, there is also a backlog of repayment plan applications. According to court documents, the government is now processing more than one million petitions for a new plan.
While you may still be in SAVE forbearance, debtors’ obligations resumed incurring interest in August.
If you continue to make payments on your loans after applying for a repurchase offer, or if the Education Department determines that you have made more than the requisite 120 qualifying payments for PSLF, you are eligible to a return from the government, according to higher education expert Mark Kantrowitz. He’s heard from others who have received one in this circumstance.
How to apply for PSLF Buyback
According to Nierman, you may apply for the buyback program using the PSLF Reconsideration site on your Federal Student Aid account.
Consumer advocates advised that you keep note of the date you made your buyback request (you should get a confirmation email) as well as the number of qualified PSLF payments. That sum should be available in your student loan account.
How your buyback offer is calculated
After you’ve submitted your buyback request, the Education Dept. is supposed to send you an offer letter. That should include the number of monthly payments you missed during your public service history, and a chance to pay that bill now in exchange for student loan forgiveness.
How the government calculates your missed monthly payments is complicated, said Kantrowitz. But it’s usually based on what your bills were before and after the period during which you weren’t making qualifying payments, Kantrowitz said.
Some people who have low incomes are eligible for zero-dollar payments, and they might not have to pay anything to get their debt cleared.
Once you get the offer letter, Kantrowitz said, “You must pay the amount to your loan servicer within 90 days.”
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