- The PSLF Buyback Program allows borrowers to retroactively earn credit for past deferment or forbearance months by making payments under a qualified repayment plan.
- If the pause lasts less than 12 months, the Department of Education uses the lesser of IDR payments from before or after that period.
- For longer periods, borrowers must provide tax returns and family size information for each year covered to calculate the buyback payment.
The Public Service Loan Forgiveness (PSLF) buyback program allows federal student loan borrowers to “buy back” eligible months for PSLF that were previously ineligible due to deferment or forbearance. Its goal is to allow borrowers to compensate for time lost for legitimate reasons such as certain forbearances or forbearance for administrative errors (such as the current SAVE forbearance).
“Buyback” is a way to make up the difference by paying the amount that would have counted if you were on a qualified repayment plan during those months. The calculation is based on your lowest IDR payment At that time, it will be adjusted for your income, family size and loan type for that calendar year.
However, the rules differ on whether it is a short moratorium or forbearance (less than one year), or a longer period (more than one year). Specifically for borrowers in SAVE forbearance, this runs through July 2024, which is more than a year – so different rules will apply.
How is PSLF buyback amount calculated
Education Department (ED) Uses a set of rules that vary depending on how long your deferment or forbearance lasted and whether you were on an income-driven repayment (IDR) plan before or after that period.
1. If the break was less than 12 months
For short periods (less than one year) the calculation is straightforward. ED looks at your payments under the lowest legal repayment plan (like drink Or ibr) immediately before and immediately after the moratorium or forbearance. then they will use it lower Of those two amounts as monthly payment for your buyback calculation. Remember, since SAVE is no longer a “legal” repayment plan, it will not be used, and the courts have confirmed that neither will repayment.
Example:
Let’s say you were on the SAVE plan before entering the four-month moratorium in 2024. Your SAVE payment was before the stop $110 per month. You submitted a buyback request in November 2024. Your buyback will be calculated on the IBR or PAYE amount during that period. This will bring your buyback to $312/month, so your Total buyback will be $1,248.
2. If the break was 12 months or more
Here’s what that request will look like and how you’ll know what calendar year they’ll ask for:
ED uses this information to determine what your payment will be Lowest IDR Plan Available For that period. Income data from your tax return, along with your family size, is used to estimate your discretionary income – the basis for IDR payment calculations.
If your forbearance exceeds multiple tax years, ED requires tax documentation for each of those years to ensure accuracy. And remember, this uses the calendar year, not the tax year. This may change your mathematics.
For periods:
- July 2024 – December 2024: IBR or PAYE using your 2024 income tax return
- January 2025 – December 2025: IBR or PAYE using your 2025 income tax return
- January 2026 – present: Whatever you owe under RAP, IBR, or PAYE today, or your 2026 tax return (if you file after December 2026)
Example:
Imagine you had a grace period of 20 months between 2024 and 2025. Your 2024 adjusted gross income (AGI) was $60,000And your 2025 AGI falls $55,000. The number of your family was three each in both the years. ED will calculate your buyback payment separately for each year based on that AGI – using the lower monthly IDR payment for each respective period.
If the 10-Year Standard Plan payment for your loan is less than the calculated IDR amount, ED will use that standard payment instead.
3. If you were not on an IDR plan before or after the break
Borrowers who were not enrolled in an IDR plan before or after their deferment must still provide income data so ED can estimate what their payments will be. Would have been done On IDR scheme. Without tax or family size information, the Department defaults to 10-year standard plan payments, which often exceed IDR-based amounts.
4. If you have not filed taxes during this period
If you were not required to file a tax return during the months you bought back, you will need to submit a signed statement confirming that fact. You must also include your household size For that time period.
Without these documents, the department automatically offers 10-year standard plan payments, which can increase your buyback costs significantly.
Should you keep waiting to save stamina?
The SAVE forbearance expires in fall 2026 due to a court settlement and OBBBA rules. But staying in forbearance longer does not make your PSLF buyback cheaper, nor does it add to the PSLF credit.
For buyback purposes, what matters is the period of your moratorium/moratorium: If it is less than 12 months, ED uses the lower of your IDR payment immediately before or after the moratorium (for earlier periods this would mean your repayment amount).
Since the SAVE prohibition has already been over 12 months, ED requires Tax returns and family size for each affected year and bases the buyback on lowest repayment plan You became eligible in those months. If you do not provide documents within 30 days, the 10-year standard payment is used.
Waiting in SAVE forbearance could potentially delay progress toward PSLF without reducing costs. In fact, if you’re not saving up every month for this large lump sum payment, it may deter you from even using the option.
Furthermore, when you are forced to give up the save tolerance and make the payment, it is much like you will exhaust the PSLF in the “normal way” before your buyback process even begins. There is no specific “PSLF buyback forbearance” and each month you make a payment as usual means one month of buyback is reduced – until you are done.
what happens next
For anyone considering a PSLF buyback, the key steps are:
- Verify eligibility. You must be employed (and certified) in eligible public service employment and have an eligible Direct Loan.
- Review your credit history. Identify which months were in forbearance or forbearance that can count toward the buyback. For many borrowers, this is a savings forbearance.
- Gather documents. Make sure you have your tax returns included for each year and note your family size for each period.
- Submit information promptly. Reply to ED or your servicer within 30 days to avoid assessment at the standard rate.
Don’t forget that the timeline for PSLF buybacks is two or more years away… so this could be a “hurry up and wait” situation.
The PSLF buyback program offers public service borrowers a way to recoup lost time for forgiveness, but it is important to understand the trade-offs of the program.
Whether your stay is a few months or several years, understanding how your IDR payments are calculated can help you plan those months.
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