Will PSLF Buyback Last 2026: What Borrowers Need to Know

What Is the PSLF Buyback?

The PSLF buyback is a process that lets borrowers make a lump-sum payment for past months when they were employed full-time by a qualifying employer but were not on an income-driven repayment (IDR) plan, typically because they were in a forbearance, deferment, or grace period. By making this back payment, borrowers can get those months counted toward their 120 qualifying payments.

The program was enacted through the IDR Account Adjustment announced by the Education Department in April 2023 and codified in September 2023. It is available only to borrowers who have already made at least 120 qualifying payments on their loans or are close to that threshold.

Borrowers who had a period of forbearance or deferment after October 1, 2013, and before October 1, 2017, and who were employed by a qualifying employer at that time, may also use the buyback to fill gaps. The buyback is not available for months when a borrower made no payment and was not in an eligible forbearance or deferment.

There is no official sunset date for the PSLF buyback. The Education Department has stated the program will continue indefinitely under current administrative rules. However, its longevity depends on several factors.

Administrative priority. The buyback was introduced under the Biden administration's effort to fix systemic PSLF processing errors. Future administrations could choose to restrict or eliminate it through regulatory changes. Any such change would likely require a formal rulemaking process under the Higher Education Act.

Congressional action. If Congress were to amend the Higher Education Act to remove the buyback authority, the program would end. There is no active legislation to do so as of mid-2026.

Technical implementation. The Department is still building automated systems to handle buyback requests. Currently, borrowers apply through the PSLF Help Tool at StudentAid.gov and receive a manual review. If the Department determines the volume is too high to process efficiently, it could suspend new applications.

How to LEARN MORE the PSLF Buyback

1. Check your employment history. Use the PSLF Help Tool to confirm each employer is a qualifying employer and verify months of full-time employment.
2. Identify gap months. Review your loan payment history on StudentAid.gov to find months where you were in forbearance or deferment but not on an IDR plan.
3. Complete the buyback request form. Download and fill out the PSLF Buyback Request (Form 2023-PSLFB). The form requires employer certification for each month you want to buy back.
4. Submit the request. Mail or fax the form to the ED PSLF processing center. Expect a 6-12 week review time. If approved, you will receive a payment letter with the exact amount due.
5. Make the payment. The lump sum covers the unpaid months. Once processed, those months count toward your 120 total.

This article is for informational purposes only and does not constitute personalized tax advice. Consult a qualified tax professional for guidance specific to your situation.

The PSLF buyback has specific limitations. It does not apply to months when a borrower was not employed by a qualifying employer, even if payments were made. It also does not cover borrowers who were in default during the gap months, except under limited circumstances during the COVID-19 forbearance period.

Not covered by the buyback:

• Months of non-employment with a qualifying employer
• Months where no payment was made and the borrower was not in an eligible forbearance or deferment
• In-school deferment periods (unless the borrower was employed full-time)
• Months prior to October 1, 2013, unless they were part of the IDR Account Adjustment narrow window

Another common error: Borrowers sometimes LEARN MORE buyback before reaching 119 qualifying payments. The Education Department recommends waiting until you have 120 months of eligible employment, even if some of those months were gaps.

While the PSLF buyback is a powerful option, it carries several risks. The most significant is timing: the Education Department has not guaranteed a processing timeline, and some borrowers report delays of six months or more. During that period, your loan may remain in forbearance, accruing interest if not already in a zero-interest status.

Tax implications: PSLF forgiveness is not considered taxable income by the IRS under current law (IRC §108(f)). However, some states may treat forgiven amounts as income. Check your state tax rules.

Program exhaustion: Although no sunset date exists, the Education Department could end the buyback with 30 days' notice through a Federal Register notice. Borrowers nearing 120 months should apply as soon as they are eligible.

Expert Tips

• Save evidence of employment dates (pay stubs, W-2s, or employer letters) before the 10-year statute of limitations on records expires.
• Use the PSLF Help Tool's payment tracker to identify exact gap months before you fill out the buyback form.
• If you have multiple Direct Loans, the buyback applies to all of them simultaneously, you cannot pick and choose.
• After you hit 120 payments, submit the buyback request within 30 days to avoid unnecessary interest accrual.
• If you are employed by a 501(c)(3), confirm your employer's eligibility annually using the PSLF Help Tool's employer search.

Mistakes to Avoid

Assuming buyback works for non-IDR payment months. The buyback only fills gaps where you were not on an IDR plan, it does not help with payment amounts that were too low.

Leaving the PSLF program before checking buyback eligibility. Even if you have a few forbearance months, the buyback may make it worth staying in public service.

Paying more than necessary. The buyback amount is calculated at 1/120th of the remaining principal, not the minimum monthly payment. Verify the amount on your payment letter before sending a check.

Pros and Cons

• 👍 Pros: Fills critical gaps in employment; allows borrowers who left PSLF to return without restarting; no tax penalties from the IRS; process is standardized and documented.
• 👎 Cons: Processing delays; requires lump-sum payment; not available for in-school deferment; program may be discontinued without a replacement; some forbearance periods do not qualify.

Bottom Line

The PSLF buyback is a legitimate, government-approved path to forgiveness for borrowers with eligible employment gaps. It is worth using if you are within 12 months of 120 qualifying payments and have identifiable forbearance or deferment months. However, the lack of a guaranteed processing timeline means borrowers should apply early and prepare for a wait. ✅ Recommended for borrowers with at least two years of eligible employment gaps. ❌ Not useful for borrowers with no eligible gap months or those who are more than 24 months from 120 payments.