PSLF Buyback Program: How It Works and How to Apply

The PSLF Buyback program lets you convert months spent in deferment or forbearance into qualifying PSLF payments — by paying what you would have owed on an income-driven repayment plan.

• It’s for borrowers who already have 120 months of qualifying employment. Buyback doesn’t add employment credit. It adds payment credit for months you were working but not paying.

• Your cost depends on what your IDR payment would have been. If your income was low enough, buyback can cost $0.

• You apply through the PSLF reconsideration form on StudentAid.gov. There’s no separate buyback application.

• The program is regulatory, not statutory. It could be changed or eliminated through rulemaking — a real possibility under the current administration.

PSLF requires 120 qualifying monthly payments while working full-time for a qualifying employer. For years, many borrowers who met the employment requirement fell short on payment counts — because their servicers steered them into forbearance or deferment instead of income-driven repayment.

The Department of Education created buyback in its November 2022 final rule — codified at 34 CFR § 685.219(g)(6) and effective July 1, 2023 — to fix that problem. You pay the equivalent of what you would have owed on a qualifying repayment plan. Once you pay, those months count toward your 120 — and if that puts you at or over 120, your remaining balance is forgiven.

You must meet three requirements:

1. You have Direct Loans with a remaining balance. FFEL and Perkins loans don’t qualify unless you consolidate them into a Direct Consolidation Loan first. Loans that are already paid in full, forgiven, or discharged can’t be bought back.

2. You have 120 months of approved qualifying employment. This means your employment has already been certified and approved on studentaid.gov. Buyback doesn’t create employment credit — it converts non-payment months into qualifying payment months.

3. You have months in deferment or forbearance that overlap with your qualifying employment. These are the months you’re buying back.

Months You Cannot Buy Back

Not every non-payment month qualifies. You cannot buy back months when your loans were in:

• In-school or in-origination status

• Grace period

• Default

• Bankruptcy

• Total and permanent disability (TPD) monitoring

The key distinction: buyback covers deferment and forbearance. It does not cover default, bankruptcy, or the other statuses listed above.

Your buyback amount is based on what you would have paid on a qualifying income-driven repayment plan. The calculation depends on how long your forbearance or deferment lasted and whether you were on an IDR plan before or after.

Forbearance or Deferment Under 12 Months

If you were on an IDR plan before or after a forbearance that lasted fewer than 12 months, FSA uses this calculation:

1. Identify your monthly IDR payment immediately before the forbearance began.

2. Identify your monthly IDR payment immediately after the forbearance ended.

3. Use the lower of the two amounts as your monthly buyback rate.

4. Multiply by the number of months being bought back.

Example: Your IDR payment was $150/month before forbearance and $175/month after. You were in forbearance for 6 months. Your buyback cost: $150 × 6 = $900.

Forbearance or Deferment 12 Months or Longer

For longer gaps, FSA requires documentation to recalculate what your IDR payment would have been:

• Tax returns for each calendar year covered by the forbearance

• A signed family-size statement for each year

FSA recalculates your hypothetical IDR payment for each year. If the forbearance spanned multiple calendar years, the monthly amount may differ across years.

The 30-day deadline matters. When FSA requests this documentation, you have 30 days to submit it. If you miss that deadline, FSA defaults your buyback calculation to the 10-year Standard Repayment Plan amount — which is almost always higher than the IDR-based amount.

$0 Buyback

If your income during the deferment or forbearance period would have qualified you for a $0 payment on an IDR plan, your buyback costs nothing. This is written directly into the regulation at 34 CFR § 685.219(g)(6)(ii) — it’s not discretionary.

You qualify for $0 buyback when your adjusted gross income during those months fell below the poverty level threshold used by your IDR plan.

The 10-Year Standard Plan Cap

Regardless of the calculation method, your buyback amount per month is capped at the 10-year Standard Repayment Plan payment. This cap protects borrowers whose income-based calculation would otherwise exceed the standard amount — typically higher-income borrowers with smaller loan balances.

The SAVE Formula Change (March 2026)

As of March 31, 2026, the Department of Education changed how buyback is calculated for borrowers who were on the SAVE plan. Previously, FSA used the SAVE plan’s payment formula — which produced lower monthly amounts because SAVE used a higher income exemption (225% of the federal poverty level vs. 150% for IBR and PAYE).

Under the new policy, SAVE payment amounts can no longer be used for buyback calculations. FSA now calculates buyback using IBR, PAYE, or ICR formulas instead. For many borrowers, this makes buyback more expensive.

Example of the impact: A borrower whose SAVE-based buyback would have cost $4,300 may now owe $12,800 under IBR. The difference comes entirely from the formula change — not from any change in the borrower’s income or loan balance.

If you were on SAVE before the plan was blocked by litigation in mid-2024 and placed into administrative forbearance, those months are eligible for buyback — but the cost is now calculated as if you had been on a different IDR plan.

Related: PSLF Buyback Timeline: How Long Does It Take

There’s no separate buyback application. You request it through the PSLF reconsideration process on studentaid.gov.

1. Certify all qualifying employment. Make sure every period of qualifying employment is reflected in your studentaid.gov account. Submit a PSLF form (formerly the Employment Certification Form) for any uncertified periods. Your account needs to show 120+ months of approved qualifying employment.

2. Submit a PSLF reconsideration form. Go to studentaid.gov and select the PSLF reconsideration option. Choose “PSLF Buyback” as the reason for your request.

3. Respond to any documentation requests within 30 days. If FSA needs income documentation to calculate your buyback amount, submit tax returns and family size statements promptly. The consequences of missing this deadline are explained above.

4. Receive your buyback offer letter. FSA sends a letter stating the total buyback amount. Review the amount carefully — it should reflect IDR-based calculations, not the Standard Plan amount (unless your income was high enough to produce that result).

5. Pay within 90 days. Your PSLF servicer (MOHELA, as of 2026) must receive the full buyback payment within 90 days of the date on the offer letter. If the full amount isn’t received within 90 days, the offer expires.
   Once payment is processed, those months are added to your qualifying payment count. If that brings you to 120 or more, your remaining balance is forgiven.

After submitting, you can track your buyback request status through your studentaid.gov account.

Related: PSLF Reconsideration: How to Fix a Denied PSLF Application

PSLF itself is statutory — Congress created it in 2007, and eliminating it would require legislation. But buyback is different. It was created by regulation (the Department of Education’s 2022 final rule), not by statute. That means it can be changed or eliminated through the rulemaking process without congressional action.

The current administration has not announced plans to eliminate buyback. But the signals aren’t encouraging. Processing has slowed, and the backlog of pending applications has grown to 88,170 as of February 2026. The department is processing fewer applications per month than it receives.

None of this means buyback is disappearing tomorrow. Applications are still being accepted and processed. But as a regulation, the program’s future depends on administrative decisions.

If you’re eligible, apply now. The program exists today, and a request submitted now is stronger than one submitted after a potential rule change.

Related: Can PSLF Be Reversed?