PSLF Buyback: How To Get Credit Toward Loan Forgiveness

Millions of public service workers may be closer to loan forgiveness thanks to the PSLF buyback program. This program allows eligible borrowers to receive retroactive credit for months that didn't previously count toward loan forgiveness. This includes months spent in deferment or forbearance, being on the wrong repayment plan, or missing required paperwork.

While the program has been largely stalled due to legal challenges, that may be starting to change. In response to a federal lawsuit, the Department of Education has agreed to begin publishing monthly updates on PSLF buyback application activity and eligibility, starting May 15, 2025. These updates could signal that application processing may soon resume.

Here's how the PSLF buyback program works, who qualifies, and what to expect next.

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What is the PSLF buyback program?

The PSLF buyback program was introduced in 2023 under the Biden administration as part of a broader effort to fix long-standing issues with the Public Service Loan Forgiveness program and income-driven repayment (IDR) plans.

Also known as payment credit restoration, the buyback program gives federal loan borrowers a chance to retroactively receive credit for months that didn't previously count toward Public Service Loan Forgiveness. That includes time spent in certain types of forbearance or deferment, or on the wrong repayment plan.

How does PSLF buyback work?

Eligible borrowers can make a one-time payment to “buy back” months spent in deferment or forbearance and have them count toward the 120 qualifying payments required for Public Service Loan Forgiveness. This can help accelerate forgiveness if progress was delayed by servicing errors or periods of deferment and forbearance, such as the mandatory SAVE Plan forbearance.

The amount you'll pay depends on what your monthly payment would have been under an income-driven repayment plan during the months you're buying back, typically based on your income at the time.

“If their income has increased since then, the monthly payments now may be higher, so buying back the old payments may save them money,” explains Mark Kantrowitz, financial aid expert and author of “How to Appeal for More College Financial Aid.”

If you're not on an IDR plan, your loan servicer will ask for your tax returns to estimate what your payments would have been during the buyback period. They'll base the amount on your documented income at the time, and may adjust it to reflect any changes in family size.

Who qualifies?

PSLF buyback is best suited for borrowers with large loan balances who are nearing the end of their forgiveness timeline.

“If you were working in the public sector but, due to a technicality, were not earning PSLF credit, this program could be a big help,” says William Bevins, a certified financial planner (CFP) in Franklin, Tennessee.

You must meet the following requirements to qualify:

• Loan type: You must have Direct Loans or consolidate an eligible federal loan into a Direct Consolidation Loan.
• Employment: You must have worked full-time for a qualifying government organization or a 501(c)(3) nonprofit for at least 120 months.
• Repayment status: Any months you're attempting to buy back must be during periods when your loans were in repayment, but the time didn't count — either due to a technical error, loan servicing issue, or certain types of forbearance or deferment, such as the mandatory SAVE Plan forbearance.

How to apply

If you meet the eligibility requirements, here's how to apply for PSLF buyback:

• Certify your past employment: Use the PSLF Help Tool to certify any months of eligible employment that haven't been recorded yet.
• Wait for the payment adjustment: Make sure the payment count adjustment has been applied to your account before submitting a buyback request. This step is free and updates your qualifying payment count.
• Verify the months you want to buy back: Identify which months of deferment or forbearance you want credit for, and ensure you were working for a qualified employer during that time.
• Submit your request: Go to the PSLF Reconsideration portal and submit a request. The Department of Education asks that you include the following statement: “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.”
• Review the buyback agreement: If you qualify, you'll receive a buyback agreement outlining the amount due and payment instructions. You must pay the full amount within 90 days or the agreement becomes void.