The PSLF buyback is a federal option that lets you pay what you would have owed during past months of deferment or forbearance and have those months counted toward the 120 qualifying payments required for Public Service Loan Forgiveness, provided you were working full-time for a qualifying employer during those months. For borrowers who earned modest salaries at the time, the cost per month can be small, and in some cases it is zero.
Who Can Use the Buyback
Three conditions have to be true before you can apply:
- You still owe a balance on your Direct Loans. Paid-off, forgiven, or discharged loans are ineligible.
- You have at least 120 months of certified full-time qualifying employment at a government or nonprofit employer. All of that employment must already be certified through the PSLF Help Tool before you submit a buyback request.
- You have fewer than 120 qualifying payments because some months were spent in deferment or forbearance.
Full-time means averaging at least 30 hours per week, or meeting your employer’s own full-time standard if it sets a lower threshold. If you work part-time for more than one qualifying employer, the combined hours have to reach 30 per week.
Which Months You Can Buy Back
Any month qualifies if three things line up: your Direct Loans had a positive balance, you were in deferment or forbearance, and you were working full-time for a qualifying employer that same month. That covers the most common cases, including financial hardship forbearances, administrative forbearances while a servicer processed paperwork, and the extended SAVE plan forbearance many borrowers landed in.
Some months are permanently excluded, regardless of your employment:
- In-school or in-origination status, when the loan hadn’t yet entered repayment.
- The six-month grace period after leaving school.
- Any month the loan was in default.
- Months during an active bankruptcy proceeding.
- The post-discharge monitoring period for total and permanent disability.
The label “in-school” causes confusion. If you went back to school while existing loans were already in repayment and your servicer placed them in an in-school deferment, that deferment is not the same as the original in-school status and may be eligible for buyback. Borrowers currently enrolled who want ongoing payments to count can file an in-school deferment waiver with their servicer.
If You Consolidated
Once loans are folded into a Direct Consolidation Loan, you can only buy back months after the consolidation’s first disbursement date or after October 2007, whichever is later. Deferment or forbearance months on the original loans before consolidation don’t carry over. You also can’t buy back months on an existing loan and then consolidate to move that credit onto a new loan.
What the Buyback Costs
The price is based on what your monthly payment would have been during the months you’re buying back, using your income and family size from that time. It is not based on your current finances. The Department of Education applies these rules:
- If you were on an income-driven repayment plan immediately before or after the deferment, and the gap was under a year, the department uses the lower of the two IDR payment amounts.
- If you weren’t on an IDR plan, the department requests your tax returns and family size for the relevant years and calculates what an IDR payment would have been.
- If the 10-year standard repayment amount for that period is lower than the IDR figure, the department uses the standard amount instead.
- If you don’t provide tax information within 30 days, the calculation defaults to the 10-year standard amount, which is almost always higher than an IDR figure.
If your income during the buyback months would have qualified you for a $0 IDR payment, your buyback cost for those months is $0, and the months still count toward forgiveness.
How to Apply
The process runs entirely through StudentAid.gov, and skipping the first step is the most common reason requests are denied.
Certify all qualifying employment first. Use the PSLF Help Tool to file a PSLF form for every period of qualifying employment, including past jobs. Every month you want to buy back has to overlap with an already-approved employment certification.
Identify the months you want to buy back. Review your loan history to pin down the exact months of deferment or forbearance that lined up with qualifying employment. StudentAid.gov and your servicer’s records show those periods. Confirm none of them fall in an excluded category.
Submit through PSLF Reconsideration. On the PSLF Reconsideration page, select “PSLF Buyback” as the reconsideration type and confirm that you have 120 months of qualifying employment. There is no separate paper form.
Wait for the buyback agreement. If you’re eligible, the Department of Education emails a buyback agreement stating the dollar amount and payment instructions.
How Long It Takes
The Department of Education’s official estimate is 45 business days. Actual processing has been running much longer, with reported averages of roughly six to twelve months and some requests taking 16 months or more. A large backlog of pending applications is part of the reason.
Once your agreement arrives, you have 90 days from its date to pay the full amount to your servicer. You can split the total across multiple payments inside that window, but the whole balance has to arrive within 90 days. Miss the deadline and the agreement is void; you would have to start over.
The agreement also becomes void if your loan status changes during the payment window, for example if the loan is paid off or rolled into a new consolidation. After the servicer receives full payment, the bought-back months convert to qualifying payments. If that brings you to 120 or more, your remaining balance is discharged.
What to Do While You Wait
Keep making your regular monthly payments. Those payments count toward PSLF on their own, independent of the buyback. Stopping payments in anticipation of forgiveness is one of the costliest mistakes borrowers make: if the buyback falls through, you’ve lost qualifying payment credit for nothing.
If the approved buyback plus your regular payments push you past 120, any payments made beyond the 120th may be eligible for a refund. Keep records of every payment during the waiting period.
Keep employment certification current, too. If you change employers or your certification is close to lapsing, submit updated PSLF forms. A gap in certified employment can complicate a buyback that would otherwise be straightforward.
Taxes on Forgiveness Reached Through Buyback
PSLF forgiveness is not federally taxable, and that exclusion is permanent under Section 108(f)(1) of the Internal Revenue Code. This is different from income-driven repayment forgiveness. The American Rescue Plan Act temporarily excluded all student loan forgiveness from federal taxes through December 31, 2025, and starting in 2026, borrowers who reach forgiveness through IDR will generally owe federal tax on the forgiven amount. PSLF borrowers, including those who cross the 120-payment line by using the buyback, are not affected by that change.
Some states tax forgiven student debt even when the federal government does not. Check your state’s rules before assuming you owe nothing.