Student Loan Borrower PSLF Buyback Backlog swells to 74,510

More than 74,000 federal student loan borrowers are caught up in the backlog of applications for the popular student loan forgiveness program.

Called the forgiveness buyback for public service loans, the program allows borrowers pursuing PSLF to clear their debts faster than expected. Signed into law by President George W. Bush in 2007, PSLF offers debt cancellations to people who have worked for a specific nonprofit organization or government for ten years.

As of August 31, there is a backlog of 74,510 borrowers waiting for the U.S. Department of Education to process the buyback application, according to a new court filing. This is up from 72,730 and 65,448 borrowers at the end of June. In August, there will be a filing show with just 5,600 repurchase applications being processed.

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

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The Education Department regularly shares data on pending buyback requests as part of a lawsuit filed by the American Federation of Teachers. The teachers’ union claims that the institution is blocking borrowers from their rights.

Some borrowers CNBC talk by explaining that they have been waiting for more than six months to resolve to request a buyback.

This is what student loan borrowers need to know about the program and its current challenges.

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

This opportunity allows borrowers who have hit 120 months of eligible public service employment to retroactively pay the months they missed due to leniency or postponement, or submit a request to the Education Department to “buy back.” During suspension of these payments, borrowers will not normally obtain credits to the PSLF.

The buyback program was particularly popular after the court blocked valuable education or SAVE plans in the summer of 2024. These borrowers found that even though they continued to work in eligible public services, they still frozen towards the PSLF during payment suspension.

Applications are currently piled up under the Trump administration. In March, Trump officials finished almost half of the education department’s staff, including many people who supported the borrower.

Nancy Nierman, assistant director of New York’s Education Debt Consumer Assistance Program, said despite the delay in buying back at the PSLF, “If you are eligible, there is no harm in submitting your application.”

“But if you can afford to pay with other repayment plans, don’t resort solely to buy back to get a 120-qualified payment, especially if you only need a few months of credit to reach your forgiveness,” she said.

You can also apply for a buyback and submit documents to switch to another repayment plan at the same time. However, there is also a backlog of repayment plan applications. Court records also pending more than one million requests for the new plan.

For now, you can remain tolerant of savings, but borrowers’ debts began to attract attention again in August.

If you apply for a buyback offer or the education department determines it is above the required 120 qualification payments for the PSLF, you are entitled to a government refund, said Mark Kantrowitz, a senior education expert. He’s heard from people who got it in this scenario.

Nierman said you can apply for a repurchase program through the PSLF Reconsideration Portal for the Federal Student Aid Account.

Consumer advocates recommend tracking when submitting a buyback request (you must receive a confirmation email) and the number of eligible PSLF payments. That number should be accessible through your student loan account.

After submitting your buyback request, the Education Department is supposed to send you an offer letter. This should include the number of monthly payments missed during the history of public services, as well as the opportunity to pay that bill now in exchange for student loan forgiveness.

It is complicated to calculate how the government missed monthly payments, Kantrowitz said. But it is usually based on bills before and after the period when you weren’t making qualifying payments, Kantrowitz said.

Some people with low incomes may not need to pay anything to clear their debts, and some people who are eligible for zero dollar payments.

Upon receiving the offer letter, Kantrowitz said, “We must pay the amount to the loan servicer within 90 days.”