Make Your Student Loan Buyback Work: A Complete Guide to PSLF Relief

If you’re working in public service and struggling with student debt, a new option for loan forgiveness might be within reach. The Department of Education has introduced an opportunity for qualified borrowers to pursue what’s known as a student loan buyback arrangement—allowing you to potentially count additional periods toward the Public Service Loan Forgiveness (PSLF) program. But who actually qualifies, and is this path right for your situation?

Who Qualifies for the Buyback Option?

Your eligibility for this student loan buyback program hinges on several key factors. First, you must have approved qualifying employment for the months you’re attempting to buy back. This means you were working at least 30 hours per week for a government organization or qualifying nonprofit during those periods.

Second, purchasing back these months must actually complete your 120 qualifying PSLF payments. The program won’t allow you to buy back periods just to get ahead—they must bridge the gap to your forgiveness milestone. Third, you’ll need to maintain an outstanding loan balance. If your loans are already paid off, there’s nothing to forgive.

The Biden administration made significant changes in 2023 that expanded what counts toward PSLF eligibility. Previously, periods of deferment and forbearance were barriers to forgiveness. Now, certain periods—including AmeriCorps service, military-related suspensions, hardship deferrals, and administrative forbearances—automatically count. The buyback program extends this further, potentially allowing previously excluded months to count if you’re willing to pay for them.

Understanding the Student Loan Buyback Payment Structure

Here’s where the math gets important. When you purchase back months of non-payment status, you’ll pay an amount based on what your monthly payment would have been during that period had you been enrolled in an Income-Driven Repayment (IDR) plan.

The calculation depends on your situation. If you were previously in an IDR plan, the Department uses the lower of your two monthly payments—the one before your suspension period or the one after. If you weren’t enrolled in an IDR plan during the months you want to buy back, you’ll need to provide tax returns and family size information for those periods. The Department then calculates the lowest IDR amount you would have qualified for and uses that as your buyback cost.

There’s a safety valve built into this formula: if the 10-year Standard repayment amount is lower than your calculated IDR payment, they use the Standard amount instead. This means you’ll never pay more than the lowest possible amount you would have owed during that period.

The Application Process for Buyback Relief

Requesting to buy back your months involves submitting a specific form to the Department of Education. You’ll need to file what’s called an PSLF reconsideration request and include exact language: “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.”

Precision matters here. You should provide exact months and years for your buyback request. If you’re uncertain about your payment history, StudentAid.gov allows you to review your complete loan record and employment verification before submitting anything. This documentation step prevents delays and rejections.

Why the Department Recommends Patience Right Now

Before you rush to submit a buyback request, the Department of Education has an important recommendation: hold on temporarily. Currently, they’re conducting an IDR Account Adjustment that reviews past periods of suspension and forbearance for PSLF borrowers. This comprehensive review was underway through 2024 and continues to address many of the same periods you might otherwise buy back.

The logic is sound—many borrowers may qualify for automatic credit without paying anything through this adjustment process. Submitting your buyback request before this review finishes could mean paying for months that the Department might credit automatically. The Department strongly encourages borrowers to wait until this process concludes before initiating buyback requests, potentially saving you significant money.

Critical Details Before Proceeding

Several points deserve emphasis as you consider whether a student loan buyback strategy makes sense for your circumstances. The program specifically applies only to federal student loans—private loans don’t qualify. Your employment during the buyback months must meet the same strict criteria as current PSLF employment: 30+ hours weekly at a qualifying government agency or nonprofit organization.

Additionally, understand that not all suspension periods qualify for buyback. The months that automatically count under the 2023 policy changes cannot be repurchased. The buyback option applies specifically to deferment and forbearance periods that still don’t count toward PSLF—essentially the gaps the automatic credit doesn’t fill.

The overall goal remains unchanged: accumulate 120 qualifying payments, then receive discharge of your remaining federal student loan balance. The student loan buyback program simply provides a bridge for borrowers whose work history includes gaps that previously seemed like dead ends. Evaluate your personal loan history, confirm your employer’s eligibility status, and consider whether buying back specific months makes financial sense before proceeding with your application.