Here's How to Get Student Loan Forgiveness Sooner While SAVE Remains on Hold
Mike De Socio
5 min read
Teachers and other public servants who are close to forgiveness through the Public Service Loan Forgiveness program could get debt relief faster with this new buyback program.
If you're enrolled in the Public Service Loan Forgiveness program and were due to receive debt relief last year or expected to hit the 120-payment mark this year, a new program can help you apply for debt relief during the SAVE payment pause.
PSLF offers student loan forgiveness to teachers, nurses and other public service workers who have made 120 qualifying payments -- the equivalent of 10 years -- while working at a qualifying job. The PSLF Buyback program offers the opportunity for eligible borrowers to "buy back" no-payment months that didn't count toward forgiveness while their loans were in forbearance or deferment.
The buyback option could help some borrowers in the PSLF program get debt relief sooner, but it's not a shortcut to accelerate your progress toward PSLF, said Elaine Rubin, director of corporate communications at Edvisors.com. You'll need to have hit the 10 years of service and meet other conditions to qualify. If you're only five years into your teaching position, for example, you can't use this program to pay off your remaining five years of payments to get debt relief now.
Here's how to find out if you're eligible for the buyback program and how to apply.
The PSLF Buyback Program allows you to buy back certain skipped-payment months to count as qualifying payments under PSLF, which would speed up debt cancellation for a small number of eligible borrowers.
For example, if you're a teacher who has worked 130 months in the role, you've already surpassed the required 10 years to be eligible for public loan forgiveness. But if your student loan was in deferment or forbearance for 15 months, you may have only made 115 months of payments. Normally, this would mean that you're not yet eligible for forgiveness under the PSLF program.
Under the government's PSLF Buyback program, you can now make a payment (either in one lump sum or through multiple payments) within 90 days to cover the five months needed to fulfill your obligation and receive debt relief.
What amount will you need to buy back? That depends on how many months short of the 120 goal you are and how much your monthly payment is. If you were on an income-driven repayment plan, your monthly payment could be as low as $0, Rubin said. But if your monthly payment is $200 and you've only made 117 payments, you'll need to pay $600 to complete the buyback process.
After you submit an application requesting a buyback, the government will detail the total amount you must pay to your servicer within 90 days in order to have your remaining balance forgiven.
Who's eligible for PSLF buyback?
There are several requirements to be eligible for the PSLF buyback:
You have worked at least 120 months in a qualifying public service role, including during the months when your student loan payments were in forbearance or deferred
Buying back certain months of deferment or forbearance will get you over the threshold of 120 payments, allowing you to qualify for forgiveness under PSLF
Your loan has a remaining balance greater than zero
In other words, you cannot request a buyback if you have less than 10 years of service, and a buyback does not apply to defaulted loans or discharged loans.
Confirm the missing payment months you want to buy back and make sure you have approved qualifying employment for the same months (see how to verify these months).
Wait to hear back from StudentAid.gov about your final payoff amount.
Rubin warns that the application is a bit confusing. "Be patient, but make sure that your information has been filed," Rubin said.
You can check the status of your application through StudentAid.gov.
Can I apply for PSLF buyback if I'm enrolled in SAVE?
Yes, you can apply for the PSLF buyback if you're enrolled in the Saving on a Valuable Education plan. The SAVE program, an income-driven repayment plan, is considered an eligible forbearance type under the PSLF buyback.
Payments have been on hold for SAVE borrowers since the summer, so if you're a PSLF borrower who would have received debt relief in the fall or winter, you're a prime candidate for the buyback program.
How long will the PSLF buyback program be open?
Rubin said the PSLF buyback program is currently open, and there is no hard deadline for applications.
That being said, once you submit your application and learn your buyback amount, you have 90 days to make the buyback payment to your loan servicer. If you fail to pay the total amount within that time frame, you need to start over with a new application.
With a new administration in the White House, the long-term fate of the PSLF buyback program is unclear. Rubin recommends taking the time now, while PSLF buyback is still available, to determine whether you're eligible and submit your application.
