The Public Service Loan Forgiveness (PSLF) program offers an incredible opportunity for student loan forgiveness for those working in qualifying public service jobs. If you’re aiming to make up for past deferment or forbearance periods, a unique “PSLF buyback” option may help. This program change allows qualifying borrowers to “buy back” months in forbearance or deferment status, dating as far back as October 2007, the start of PSLF, so these months count toward the 120 required payments.
The PSLF buyback option is especially relevant if you’ve reached 120 months of qualifying employment but find yourself short on eligible payments due to deferments or forbearances. To qualify for buyback, you need to have maintained approved employment during the months you’re buying back and still carry an outstanding balance. Importantly, the buyback months need to complete your total of 120 qualifying payments, which is the threshold for PSLF forgiveness.
Let’s say you had been in an income-driven repayment (IDR) plan but had deferment months that didn’t initially count toward PSLF. The Department of Education can assess your “buyback amount” based on what your monthly payment would have been under IDR.
If you’re eligible for this option, the process is straightforward: submit a request through the PSLF Reconsideration process, include your buyback months, and specify that you’re requesting buyback eligibility for PSLF or Temporary Expanded PSLF (TEPSLF). If approved, you’ll receive a buyback agreement detailing the amount due.
How far back can you go?
It’s worth noting that if your calculated payment for those deferment or forbearance periods would have been $0, you won’t need to pay anything to complete the buyback-and you’ll still receive forgiveness.
For those wondering about limitations, the buyback program applies only to Direct Loans. Ineligible months include those in in-school deferment, default, or any month before the earliest date that PSLF counts: October 2007. If you’ve consolidated loans, buyback applies only to periods after the consolidation date.
This buyback provision is significant, especially as new PSLF adjustments will also begin applying credit for eligible deferment and forbearance months automatically. But if you’re aiming for forgiveness soon and can benefit from these options, PSLF buyback might help close that gap in your journey to loan forgiveness.