Student loan borrower PSLF Buyback backlog swells to 74,510

More than 74,000 federal student loan borrowers are stuck in a backlog of applications for a popular student loan forgiveness program.

That program, called Public Service Loan Forgiveness Buyback, allows borrowers pursuing PSLF to get their debt wiped away sooner than they might have expected. Signed into law in 2007 by President George W. Bush, PSLF offers debt cancellation to those who’ve spent a decade working for certain not-for-profits or the government.

As of Aug. 31, there’s a 74,510-person backlog of borrowers waiting to have the U.S. Department of Education process their buyback applications, according to a new court filing. That’s up from 72,730 in July and 65,448 borrowers as of the end of June. During the month of August, just 5,600 buyback applications were processed, the filing shows.

The U.S. Department of Education did not respond to a request for comment.

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The Education Department has regularly shared data on pending buyback requests as part of a lawsuit filed by the American Federation of Teachers. The teacher’s union alleges the agency is blocking borrowers from their rights.

Some of the borrowers CNBC has spoken with describe waiting for half a year or more for a determination on their buyback request.

Here’s what student loan borrowers need to know about the program and its current challenges.

The Biden administration first offered PSLF Buyback in the summer of 2023.

The opportunity allows borrowers who’ve hit 120 months of qualifying public service employment to submit a request to the Education Department to retroactively pay for — or “buy back” — any months they missed because of a forbearance or deferment. During those payment pauses, borrowers typically don’t get credit toward PSLF.

The Buyback program became especially popular after courts blocked the Biden-era Saving on a Valuable Education, or SAVE, plan in the summer of 2024. Millions of student loan borrowers who signed up for SAVE were automatically enrolled in a forbearance during that legal battle. Those borrowers found their progress towards PSLF frozen throughout the payment pause, even as they continued to work in eligible public service.

Now applications have piled up under the Trump administration. In March, Trump officials terminated nearly half of the staff at the Education Department, including many of the people who assisted borrowers.

Despite the PSLF buyback delays, “if you are eligible, there’s no harm in submitting the application,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.

“But if you can afford payments in other repayment plans, don’t rely solely on the Buyback to get you to 120 qualifying payments, particularly if you only need a few months of credit to reach forgiveness,” she said.

You can apply for Buyback and also submit paperwork to switch into another repayment plan at the same time. But there’s a backlog of repayment plan applications, too. More than one million requests for a new plan are pending with the department, court records also show.

While you can remain in the SAVE forbearance for now, borrowers’ debts began accruing interest again in August.

If you continue making payments on your loans after you’ve applied for a buyback offer, or if the Education Department finds you’ve made more than the required 120 qualifying payments for PSLF, you’re entitled to a refund from the government, said higher education expert Mark Kantrowitz. He has heard from people who’ve gotten one in this scenario.

You can apply for the Buyback program through the PSLF Reconsideration portal on your Federal Student Aid account, Nierman said

Consumer advocates recommend keeping track of when you submitted your buyback request (you should receive a confirmation email) and the number of your qualifying PSLF payments. That figure should be accessible on your student loan account.

After you’ve submitted your buyback request, the Education Dept. is supposed to send you an offer letter. That should include the number of monthly payments you missed during your public service history, and a chance to pay that bill now in exchange for student loan forgiveness.

How the government calculates your missed monthly payments is complicated, said Kantrowitz. But it’s usually based on what your bills were before and after the period during which you weren’t making qualifying payments, Kantrowitz said.

Some people who have low incomes are eligible for zero-dollar payments, and they might not have to pay anything to get their debt cleared.

Once you get the offer letter, Kantrowitz said, “You must pay the amount to your loan servicer within 90 days.”