PSLF Buyback: How It Can Help You Get Student Loan Forgiveness Faster

If you’re working toward Public Service Loan Forgiveness (PSLF), there’s a program that might help you reach forgiveness sooner — it’s called PSLF Buyback. This program allows you to “buy back” certain months of deferment or forbearance so they count as qualifying PSLF payments.

In this article, we’ll explain what PSLF Buyback is, who qualifies, how it works, and what steps you need to take.

What Is PSLF Buyback?

PSLF Buyback is a way for borrowers to count past months when they weren’t making payments because their loans were in deferment or forbearance. Normally, those months wouldn’t count toward PSLF. But now, if you already have 120 months (10 years) of qualifying employment, you can pay back those months and have them count toward PSLF or Temporary Expanded PSLF (TEPSLF).

This can be the final step that helps you reach full student loan forgiveness.

Who Can Use PSLF Buyback?

You may qualify if:

• You have Direct Loans with a balance.
• You’ve already certified 120 months of qualifying employment.
• The months you want to buy back happened while you were working for a qualifying employer.
• Buying back those months gets you to loan forgiveness under PSLF or TEPSLF.

You’re not eligible if:

• You don’t have 120 months of qualifying employment yet.
• Your loans are paid in full, forgiven, discharged, or not Direct Loans.
• You only have FFEL or Perkins Loans (unless you consolidate, but those months won’t count).

Which Months Can Be Bought Back?

You can buy back months if your loan was in:

• Deferment
• Forbearance
• Deferment or forbearance after the first disbursement of a Direct Consolidation Loan

You cannot buy back months if your loan was in:

• In-school status
• Grace period
• Default
• Bankruptcy
• Disability monitoring
• Already forgiven or discharged

How Much Does Buyback Cost?

The cost depends on what your monthly payment would have been during those months:

• If you were on an Income-Driven Repayment (IDR) plan before or after the period, they’ll use the lower of those payments.
  
• If you weren’t on IDR, you’ll need to provide your tax information and family size from that time so they can calculate it.
  
• If your IDR amount would have been $0, then you don’t owe anything — those months will still count toward forgiveness.

How to Apply for PSLF Buyback

Here’s the step-by-step process:

1. Certify your employment using your PeopleJoy portal if you haven’t already.
   
2. Check your deferment/forbearance months and make sure they line up with qualifying employment.
   
3. Submit a request through PSLF Reconsideration and choose “PSLF Buyback.”
   
4. If approved, you’ll get a PSLF Buyback Agreement with the total amount due.
   
5. Pay the full amount within 90 days. You can make multiple payments, but everything must be paid in time.

Important Things to Know

• You must keep making your regular loan payments while your request is being reviewed.
  
• If you don’t pay the buyback amount in 90 days, your agreement is void and you’ll have to start over.
  
• PSLF Buyback is managed by the U.S. Department of Education, not your loan servicer.
  
• Loan forgiveness under PSLF or TEPSLF is not taxable by the IRS.

Why PSLF Buyback Matters

The PSLF Buyback program gives public service workers — like teachers, nurses, and government employees — a chance to fix gaps in their PSLF progress caused by deferment or forbearance. It’s an opportunity that could help thousands of borrowers finally reach student loan forgiveness.

If you’ve already reached 120 months of qualifying employment, this program might be the last step to becoming debt-free.