Can You Change Repayment Plans While Waiting For PSLF Buyback?

Nearly 100,000 student loan borrowers are awaiting their PSLF buyback applications to be processed. Most of these applications are related to the SAVE forbearance, which is ending in the next 6 months.

The question becomes: what happens if you need to choose another repayment plan because your PSLF buyback application hasn't processed yet? It's going to happen to nearly everyone waiting.

And the answer is: yes, you can re-enter repayment while waiting for your PSLF buyback application to process.

For most people, the impact will be minimal - each qualifying monthly you accrue "the normal PSLF way" is one less buyback month.

However, for some borrowers, it could be more costly, since they're paying PSLF payments today at a higher rate than they'd be buying back at.

What Is PSLF Buyback?

PSLF buyback allows you to "buy back" qualified periods of deferment and forbearance to gain qualifying payments for Public Service Loan Forgiveness (PSLF). Since PSLF requires 120 qualifying payments, borrowers forced into periods of forbearance (such as the SAVE forbearance) were unable to make the payments they wanted to.

PSLF buyback solves this by allowing you to make a lump sum payment covering the time you were in forbearance - based on the repayment amount you should have paid during the time. Here's how PSLF buyback amounts are calculated.

The process, however, is mired in issues. In order to apply, you need to have 120 months of already certified eligible employment. You then submit an application, and it goes into a processing queue. The wait time to process PSLF buyback applications is stretching out to 3 years.

Furthermore, since your buyback is calculated based on what you're supposed to be paying anyway, for some borrowers, there is minimal savings for waiting - simply doing PSLF "the normal way" would be quicker for the same cost.

What Happens If You Resume Student Loan Payments While Waiting For Your Buyback Application?

Waiting for PSLF buyback does not guarantee any sort of forbearance period. You must continue to make your student loan payments until your loans are forgiven, unless you have some eligible deferment or forbearance you request.

With that being said, borrowers in SAVE must select a new repayment plan by September 2026. This means many borrowers who've been waiting for buyback will have to resume payments.

For every eligible PSLF payment you make, it simply deducts from what you're able to buyback. If you end up completing your 120 qualifying months the "normal" way, your buyback application is simply cancelled.

For many borrowers trying to buyback a period of the SAVE forbearance, this will be the likely outcome. Given that you may be only looking to buyback 8-16 months, and the wait time is 36 months, you'll likely complete PSLF "normally" before your buyback application is processed.

People Also Ask

What Is PSLF Buyback?

PSLF Buyback allows you to "buy back" eligible time spent in deferment or forbearance to be able to qualify that time for Public Service Loan Forgiveness.

How Is PSLF Buyback Calculated?

PSLF Buyback is calculated by determining your monthly payment under IBR, ICR, or PAYE during the time spent in forbearance. It's then added up as a lump sum, which the borrower is required to pay within 90 days.

Is PSLF Buyback Worth It?

It depends. PSLF buyback can be worth it for some borrowers who may be able to use older lower income to "buy back" the payment. However, the multi-year processing delay, and length of time in forbearance, may make it not worthwhile for many.

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