Getting More Out of Your Student Loan Forgiveness: What You Need to Know About the PSLF Buyback Program

The Department of Education has introduced a new opportunity for public service workers seeking student loan forgiveness. Through the recently launched student loan buy back initiative, borrowers in qualifying positions can now recover certain periods of deferment and forbearance that previously didn’t count toward the Public Service Loan Forgiveness (PSLF) program—potentially accelerating their path to full loan discharge.

Who Can Benefit From the Student Loan Buy Back Option?

The Public Service Loan Forgiveness program targets a specific group of borrowers: those working at least 30 hours weekly for government agencies or nonprofit organizations. Under the traditional PSLF structure, you need 120 qualifying payments (roughly 10 years of employment) to receive complete forgiveness of your remaining loan balance.

The Biden administration’s 2023 reforms expanded what counts as “qualifying” time, including certain forbearance and deferment periods such as military-related suspensions, AmeriCorps work, hardship periods, and mandatory administrative forbearances. However, many other gaps in payment history remain outside this expanded framework—until now.

The new student loan buy back program fills that gap. If you have additional deferment or forbearance months that don’t qualify under current rules, you can essentially purchase credit for those months by paying what your loan payment would have been at that time.

Key Eligibility Requirements for the Buyback Program

Before pursuing the student loan buy back option, confirm you meet these prerequisites:

• Your deferment or forbearance period must align with months of approved qualifying employment
• You must be pursuing 120 total qualifying PSLF payments, and buying back these months will help you reach that threshold
• Your federal student loans still carry an outstanding balance
• The periods you want to buy back weren’t previously counted in any other forgiveness calculation

How Payment Amounts Are Calculated

The calculation for your buyback payment hinges on what you would have paid during the deferment or forbearance period. The Education Department uses specific benchmarks:

If you were enrolled in an Income-Driven Repayment (IDR) plan during the gap period, your buyback cost is based on the lower of your monthly payment amounts before and after that period. If you weren’t in an IDR plan, you’ll need to provide tax return information and family size details from that timeframe.

The Department applies this standard: “Your payment amount will be based on the lowest IDR amount you were eligible for during that period. If the 10-year Standard repayment payment is lower than your calculated IDR payment, the Standard payment will be used instead.”

This approach ensures you’re paying what you theoretically would have contributed had you remained in a qualifying repayment arrangement throughout.

Current Pause: What Borrowers Should Do Now

The Education Department is currently completing an IDR Account Adjustment review, which may automatically count additional past deferment and forbearance periods toward PSLF without requiring buyback payments. This review is expected to continue through mid-2024.

The Department recommends holding off on submitting buyback requests until this adjustment process concludes, as it may resolve your situation without additional out-of-pocket costs.

How to Request Student Loan Buy Back Consideration

When ready to proceed, submit a PSLF reconsideration request that includes this exact language: “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.”

Be specific about the exact months and years you’re requesting. You can verify your loan payment history and employment records through StudentAid.gov to ensure accuracy before submitting.

The student loan buy back program represents a strategic opportunity for public service workers to reclaim previously unrecognized periods of qualifying employment and accelerate their journey toward forgiveness. Review your records, confirm your eligibility, and consider waiting for the current account adjustments to complete before making your move.