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The PSLF buyback program allows you to “buy” missing payments that would have made you eligible for loan forgiveness.
To qualify for public student loan forgiveness, you must have made 120 months of qualifying payments while employed in a qualifying public sector job.
However, if some payments were missed for certain reasons and you would otherwise be eligible for forgiveness, you can now make retroactive payments using the PSLF buyback program.
Requirements for the PSLF buyback program
To qualify for the PSLF buyback program, you must have qualified public service employment for 120 months. You must also have an outstanding balance on your student loans.
You can buy back months during which you were in an ineligible deferment or forbearance status but were otherwise eligible for PSLF by making payments equal to what you would have paid had you been on a qualified payment plan during the deferment or forbearance period.
You must buy back enough months to result in forgiveness under PSLF or TEPSLF. Repurchases that do not meet the number of 120 qualifying payments are not permitted – and you cannot repurchase months that do not qualify for a credit to PSLF.
You must have been in repayment status during the months in which the repurchase is to occur. You must not have been in a school or grace period, in arrears or bankruptcy, or in a period of complete and permanent disability monitoring.
Only months in the Direct Loan Program can be repurchased. FFELP loans are only eligible if consolidated into a Federal Direct Consolidation Loan. You cannot buy back months before consolidation, and periods before October 1, 2007, when the PSLF program began, do not count.
Amount of buyback payments
Surrender payments are based on the lowest income-based monthly repayment (or standard repayment if lower) during the deferment or forbearance period.
If you were on an income-based repayment plan during the forbearance or forbearance, the amount of retroactive payments will be based on the lower of the two monthly payments before or after the forbearance or forbearance.
If you did not have an income-driven repayment plan, you must provide a copy of your federal income tax return for each tax year in the applicable periods. (If you were not required to file a federal income tax return, you must provide an appropriate return.) You must also provide a return listing the size of your family in each of the relevant time periods.
The PSLF repurchase program is subject to the lowest calculated income-based repayment amount based on tax returns during the deferment or deferment period. Otherwise, the standard 10-year repayment plan monthly rate applies, if lower.
If you were eligible for a zero monthly payment, no payments are required under the PSLF buyback program for the months in which you were eligible for a zero monthly payment. This can happen if your income in the previous tax year was below a certain multiple of the poverty level.
For Parent PLUS loans, the PSLF repurchase program amount will be the standard 10-year repayment plan amount, unless the Parent PLUS loan is part of a Federal Direct Consolidation Loan. In this case, the payment amount of the Income-Contingent Repaid (ICR) plan will be used if it is lower than the usual repayment amount. Note that Parent PLUS loans are eligible for PSLF, but not TEPSLF.
First, wait for the IDR payment account adjustment
The one-time IDR payment number adjustment may increase the number of payments that count toward PSLF and income-driven repayment (IDR).
Payment count adjustments include the following adjustments:
- A few months of forbearance, e.g. B. Forbearances of 12 or more consecutive months or 36 or more cumulative months
- Deferment in case of economic hardship
- Military deferments in 2013 or later
- All deferred months, excluding in-school deferrals, prior to 2013
It's best to wait for the payment number adjustment before applying for the PSLF buyback program. Adjusting the number of payments may reduce the number of payments remaining before you are eligible for forgiveness. The adjustment of the payment figures should be completed in summer 2024 by July 1, 2024.
The PSLF buyback program allows those who have deferrals and forbearances that do not qualify for the payment number adjustment to have those periods counted toward forgiveness. You must have been working full-time in a qualifying public service at the time and are now making payments commensurate with these periods. You must repurchase enough payments to meet the 120-payment forgiveness requirement.
New regulations allow time spent on certain deferrals and omissions to be retroactively credited, including:
- Cancer deferral
- Postponement of the rehabilitation training program
- Postponement of unemployment
- Deferment in case of economic hardship
- Postponement of military service
- Deferment after active service
- AmeriCorps leniency
- Leniency in National Guard duty
- Forbearance in the Department of Defense's student loan repayment program
- Forbearances for up to 60 days to collect and process documentation related to a borrower's request for forbearance
- Failure to do so in connection with a national military mobilization or other local or national emergency.
Some borrowers don't wait for the IDR payment number adjustment because they just want to be free and get the repayment obligation over with. Others fear the program will disappear under a new administration.
How to Apply for the PSLF Buyback Program
To apply for the PSLF buyback program, you should submit the PSLF verification application.
They should “Incorrect number of qualified payments” and indicate the start and end of the period under consideration. If there are multiple time periods, you should specify the start of the earliest time period and the end of the latest time period.
In response to the question of why the time frame should be reconsidered, you should include the following:
“I have at least 120 months of approved skilled employment and am seeking release from PSLF or TEPSLF through PSLF buyback. Please assess my eligibility for the PSLF buyback.”
If you are eligible for the PSLF Buyback Program, you will receive a PSLF Buyback Agreement to pay for the specified months of the buyback. This will specify the total surrender amount and you must pay the amount within 90 days of the agreement approval date.
You must continue to make loan payments until the buyback is approved and you have made the buyback payments. If payments exceed the amount specified in the PSLF repurchase agreement, the excess payments will be refunded to the borrower, provided the borrower has no other outstanding federal student loans.
For more information, contact the U.S. Department of Education, not the loan servicer.
Other options
There will be an IDR repurchase program (34 CFR 685.209, 88 FR 43820) that is similar to the PSLF repurchase program (34 CFR 685.219, 87 FR 65904), but the months in which repurchase is available will be different. The IDR buyback program will not be available until summer 2024.
You are not eligible for the PSLF buyback program if you have not had 120 months of qualifying employment, but you can make a lump sum payment to prepay up to 12 months of future PSLF payments until your next income-driven repayment plan certification date. These payments will be applied toward PSLF forgiveness once you have certified your qualified employment with a qualified employer during the 12-month period. A certificate of qualified employment cannot be provided in advance.
The U.S. Department of Education also publishes a list of other student loan forgiveness programs at StudentAid.gov/forgiveness.
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