Buy Back Previous Months with the PSLF Buyback Program.

Public Service Loan Forgiveness (PSLF) is typically a difficult program to complete, and many borrowers are unaware that some of their past payments may not have been counted toward forgiveness. After recent changes to the PSLF regulations, borrowers can now buy back certain non-qualifying months in their payment history to convert them into qualifying payments.

The buyback option is part of the PSLF program, which is aimed at borrowers working 30 hours per week or more for a qualifying nonprofit or government organization. PSLF provides borrowers with a complete discharge of their federal student loans after they make 120 months (10 years) of qualifying payments.

With the buyback option, borrowers can buy back months that initially didn’t count as qualifying payments because they were in an ineligible deferment or forbearance status.

Buy Back Month Eligibility

For you to be able to buy back previous months, they must align with specific criteria.

• You must still have a balance on your loan(s)
• You have approved qualifying employment for the same months you are buying back
• Buying back these months will complete your total 120 qualifying PSLF payments

The buyback opportunity is only available to borrowers with at least 120 months of certified qualifying employment. Additionally, buying back previous months in forbearance or deferment must result in forgiveness of the loans under PSLF or TEPSLF (Temporary Expanded PSLF). Requiring 120 months of approved qualifying employment prior to applying prevents borrowers from unnecessarily buying back months that aren’t eligible for PSLF credit.

If borrowers have not consolidated their Direct Loans, they can buy back months starting from October 2007, when the PSLF program was established by law. Borrowers who have consolidated their loans can only buy back months after the date of their most recent consolidation. Months prior to consolidation are not eligible for buyback.

Borrowers are recommended to wait until their accounts are updated through the payment count adjustment later this year before submitting a PSLF buyback request. Any borrowers who have submitted a PSLF form and have approved qualifying employment will see updates in the fall.

Buyback Amount Determination

As part of the buyback process, the Department of Education will determine the amount the borrower must pay to buy back the requested months. This amount will depend on what the borrower’s likely monthly payment would have been during the months they are buying back.

If a borrower was on an Income-Driven Repayment (IDR) plan immediately before or after the months they’re buying back—and the deferment or forbearance in question was less than a year—then the lower of the two monthly IDR payments will be used.

Alternatively, if a borrower was not on an IDR plan before or after the months they’re buying back, they will be asked to submit tax information for that calendar year to determine the amount that would have been paid under an IDR plan. If the deferments or forbearances cover multiple tax years, the borrower must submit information for each year. The Department of Education will also request some additional information, such as family size during the period requested for buyback.

If the borrower doesn’t submit the requested information within 30 days, the amount to be paid will be determined based on the 10-year Standard Plan. This payment plan takes only the borrower’s loan balance and interest rate into account, not the income and household size.

If a borrower has an outstanding Parent PLUS loan, the 10-year Standard Repayment Plan will be used to calculate their equivalent payment amount. If the Parent PLUS loan has been included in a Direct Consolidation Loan, the ICR (Income-Contingent Repayment) plan calculator will be used instead.

After Being Approved or Denied for PSLF Buyback

Once a borrower submits their request, they cannot check its status. The Department of Education will analyze the borrower’s account as described and will send an email response when the process is complete. While the request is being reviewed, the borrower must continue to make payments on their student loans.

Once the borrower is approved, they will be sent a PSLF Buyback Agreement, which details the total buyback amount needed to be paid. These payments must be made to their servicer no later than 90 days after the date of the notice.

If the borrower doesn’t submit the payment within 90 days, then the agreement will be voided, and they must start the process over.

On the contrary, if a borrower’s request is denied, they will receive communication of the decision. They should then continue to make loan payments and certify employment using the PSLF Help Tool.

A processing pause began on May 1, 2024, to update user experience. During this pause, which is expected to end in July 2024, no PSLF forms will be processed. However, borrowers can still submit forms during the pause, which will be processed once the update is complete.