How to Calculate PSLF Buyback

The PSLF buyback program is one of the many changes President Biden’s administration rolled out for federal student loans. If you work in public service, PSLF buyback can help you get additional credit towards the 10 years needed for Public Service Loan Forgiveness (PSLF) that you might have otherwise missed. 

We’ll help you evaluate whether you should apply for PSLF buyback or not and show you step-by-step how to calculate the correct amount you should be paying for your buyback offer.

Who can apply for PSLF buyback? 

The PSLF buyback regulation was part of the mid-2023 overhaul of PSLF program rules under the Biden administration. 

A borrower can apply for PSLF buyback if BOTH of the following two conditions are met:

• You have periods of forbearance or deferment (such as the 2024-2025 SAVE plan forbearance) that would have normally counted for PSLF if you had been enrolled in an income-driven repayment plan.
• Adding the months of forbearance or deferment would put you at 120 months of total payment credit under PSLF.

Most common PSLF buyback mistakes

The biggest mistake borrowers make is misunderstanding the 10-year employment requirement. To qualify for PSLF buyback, you need 10 years of employment with a PSLF-eligible employer during periods when you had federal student loans.

Generally speaking, that means you need at least 10 cumulative years of public sector employment post-graduation, or you won’t qualify for PSLF buyback.

That’s because the program is exclusively there to help get you over the 10 year finish line, not to update your payment count before you arrive at that milestone.

The other big mistake is not using exact language when applying (we’ll cover that below).

How to submit for PSLF buyback

If you have 120 total months of PSLF-qualifying employment on your Direct Loans, you qualify for PSLF buyback if you have forbearance or deferment that would put you at 120 months of qualifying repayment!

Here’s how to apply.

Step 1: Make sure Student Aid knows about your employment

You need to use the PSLF help tool to let them know about all potentially qualifying public sector employment.

Step 2: Verify what periods you want to “buy back”

After your employment certification form is processed and payment counts are updated, verify the months you want to buy back. 

It's helpful to look at your NSLDS for this so you can be confident in what you're requesting to buy back. It should show periods of forbearance clearly. 

Note that the COVID forbearance should already be counted in your PSLF payment counts and thus, that period does not need to be included in your buyback request.

Generally speaking, most borrowers will only have the SAVE plan forbearance to buy back.

Step 3: Submit a PSLF reconsideration request

You next need to go to the PSLF Reconsideration page and use the EXACT language below, or the request will be denied. 

Don’t worry too much about being denied — the Department of Education will provide the correct language for reapplying. However, since you're here, let's get it right the first time. 

Language to use:

“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.”

If Student Aid decides that you are eligible to buy back months, they will send you a buyback agreement with the amount to pay and instructions to pay the full amount within 90 days of their email to you with the buyback agreement.

How to calculate what your PSLF buyback amount should be

The buyback amount should be determined by: 

• Your IDR plan before or after the period of forbearance (whichever is lower), OR 
• The Standard 10 year plan, if the IDR plan amount would be higher than that.

With the SAVE plan no longer being an option, this complicates the math, and borrowers should know the following strategy so they can advocate for themselves.

Borrowers should run the PSLF buyback calculation based on their payment under the IBR plan to know the maximum amount they should be asked to pay under PSLF buyback.

We’ll do some examples below, so you can reflect on the amount you’d owe. But first, let’s talk about what your buyback amount is based on.

Why PSLF buyback could be based on the IBR plan in the future

Our best guess is that the Department of Education would retroactively use the IBR plan for PSLF Buyback if SAVE was not an option.

Many borrowers did not have to pay much during the 3.5 year COVID-era pause, and most borrowers did not need to recertify their IDR payment either prior to the June 2024 start of the SAVE plan forbearance.

So the Department of Education could either calculate the buyback number on the SAVE plan, or they could retroactively calculate the IBR plan amount.

So far, it appears that they are using the SAVE plan payment amount for the buyback calculation, but this part of the calculation is uncertain in the future with the new Trump administration in place.

Hence, borrowers should calculate their PSLF buyback numbers using IBR and be pleasantly surprised when the number is lower than anticipated.

Now, let’s get to those examples.

How to figure out all the PSLF buyback amounts you could owe

Assume Sally owes $200,000 of med school debt, of which $180,000 is principal and $20,000 is accrued interest. Her interest rate is 7%.

Her payment under the former REPAYE income-driven plan was $300 per month as a resident physician in 2019. When the world shut down, her payments were paused until the SAVE plan rolled out in 2023.

Her new payment dropped to $206 per month once SAVE became an option — without her needing to do anything. Her payment remained that low despite becoming an attending physician in 2021 and earning a starting salary of $200,000 a year.

Using the SLP IBR calculator on our website, she sees that a $300 per month REPAYE payment would’ve resulted in a $450 a month IBR payment if she had been enrolled in that other payment plan instead.

Under the PSLF buyback rules posted on the federal website, if the SAVE plan forbearance lasts less than a year in length, and Sally was enrolled in an IDR plan when the forbearance started, the Department of Education is supposed to use the lower of her IDR plan payment before or after the forbearance. 

Sally’s PSLF buyback calculation

Let’s hypothetically say the SAVE plan forbearance ended for Sally in April 2025. She would be eligible to buy back approximately 10 months of forbearance at:

$206 x 10 = $2,060 (if SAVE is used), or

$450 x 10 = $4,500 (if IBR is used)

The $450 a month payment is far lower than the Standard 10 year plan in her case, which would be over $2,000 a month times 10 months.

Example of a PSLF buyback with a high income

Let’s presume LaToya is a surgical subspecialist who was on the REPAYE plan in 2019 with a payment of $3,000 a month, and she has $300,000 of student loans at a 7% interest rate.

Her SAVE plan payment caused her monthly payment to drop to about $2,900 per month, which wasn’t all that different from REPAYE.

If she borrowed her first loan before 2014, she would only be eligible for old IBR and not new IBR. The distinction is new IBR is 10% of income and old IBR is 15% of income.

Given her old IBR payment would’ve been about $4,500 per month, the Standard 10 year plan is lower, and so the Standard 10 year plan would be used in the PSLF buyback calculation since $3,483 (her Standard plan payment) is lower than the IBR payment would’ve been.

Of course, if the servicer is allowed to use her REPAYE or SAVE plan payments in the calculation, then those numbers would be used because the amounts are lower.

What if you have a forbearance lasting more than a year that you need to buy back?

If you have a forbearance lasting more than a year that you need to buy back, the Department of Education is theoretically supposed to ask for tax returns from each of the years that the period stretches over, along with family size information to calculate the appropriate buyback amount.

However, this PSLF Buyback program was never envisioned as a plan to provide millions of borrowers with additional credit. So the future Department of Education’s administration of this rule could certainly be different from what’s been posted on the website.

Related: PSLF Buyback: A Complicated Option for Borrowers

Will the Trump Administration honor PSLF buyback?

What we’ve told clients is that the buyback program is unlikely to be repealed immediately, although it’s unlikely that it will stick around long term.

Borrowers close to the PSLF finish line should try to take advantage of PSLF buyback under the publicly stated rules until that’s no longer an option.

And given that the calculation of the buyback amount is so muddied with litigation over the IDR plans that are supposed to be used in the formula, any reasonable buyback amount should probably be accepted by the borrower instead of challenged as it’s extremely unlikely that a PSLF buyback offer would be reversed in the future. 

That said, buyback offers that have not yet been made are significantly more up in the air. So borrowers should pay attention to what their buy back amount would be in case they can take advantage. 

If this program does stick around long term, then borrowers will need to carefully keep track of the SAVE forbearance period along with what their payments would have been, as virtually all PSLF borrowers would want to be applying for buyback during the affected period.

If you need expert guidance on PSLF buyback, work with a member of our team to get help or check out the resources on the Student Aid website.