PSLF Buyback Faces Delays and Uncertainty for Borrowers

The Public Service Loan Forgiveness (PSLF) buyback program, designed to help borrowers accelerate their path to debt cancellation, is facing significant delays and ongoing concerns about eligibility changes. Over 83,000 borrowers are currently waiting for a decision on their applications, as of December 31, 2025, according to recent court filings. This backlog is causing anxiety for those hoping to have their student loan debt forgiven after years of public service.

What is the PSLF Buyback?

The PSLF buyback allows borrowers pursuing PSLF to retroactively receive credit for months spent in forbearance or deferment. This is particularly helpful for those who previously didn’t qualify for PSLF due to periods of non-qualifying repayment. Borrowers can apply for a buyback if making payments for those previously deferred or forbearance months would enable them to reach the required 120 qualifying payments for loan forgiveness.

Significant Backlog in Application Processing

As of December 31, 2025, the Department of Education reported a backlog of 83,370 PSLF buyback applications. In December alone, the department approved 1,690 applications although receiving an additional 5,090. The Department of Education acknowledges the dynamic nature of the database, stating that application status can change as packages are supplemented with necessary information. CNBC reports that some borrowers have been waiting for over 14 months for a decision.

Impact of SAVE Plan Litigation and New Eligibility Rules

The delays are compounded by the fact that some borrowers were enrolled in the Saving on a Valuable Education (SAVE) income-driven repayment plan, which was subject to litigation and a period of forbearance. During this time, borrowers were not receiving credit toward PSLF. The buyback program offered a potential path to relief for these individuals.

Adding to the uncertainty, the Department of Education is implementing a new rule, effective July 2026, that narrows the definition of qualifying employers for PSLF. This rule, stemming from an executive order under the Trump administration, excludes employers with a “substantial illegal purpose.” Federal Student Aid states this change aims to redefine public service. Advocacy groups, including Protect Borrowers and Democracy Forward, have filed lawsuits challenging the rule, arguing it is “irremediably vague” and could disqualify borrowers based on their employers’ political views.

Borrower Concerns and Future Outlook

The combination of the backlog and potential eligibility changes is causing concern among PSLF borrowers. Many are worried they will lose the relief they have been working towards. Despite the challenges, experts recommend applying for the PSLF buyback if you believe you qualify. The future of the program remains uncertain as the lawsuits progress and the Department of Education works to implement broader student loan repayment changes.

Key Takeaways

• Over 83,000 PSLF buyback applications are currently pending.
• Delays are due to a backlog in processing and litigation surrounding the SAVE plan.
• A new rule narrowing qualifying employer definitions could impact eligibility.
• Borrowers are encouraged to apply if they qualify, despite the uncertainty.