The PSLF Buyback Formula Changes to Know About

On March 31, 2026, the Department of Education modified the Public Service Loan Forgiveness (PSLF) buyback program in a way that will cost borrowers applying for it more money.

The old formula allowed borrowers to use the Saving on a Valuable Education (SAVE) plan to calculate the buyback amount. SAVE produced the lowest monthly payments of any plan, so it was the cheapest way to calculate a buyback. With the SAVE plan no longer available, the new formula will use the lowest available IDR payment, which will now be the Income-Based Repayment (IBR) and Repayment Assistance Plan (RAP) plan payments. But these can cost more — sometimes a lot more.

Let’s look at how this will work and what the impact will be on borrowers.

How PSLF buyback works depending on forbearance length

The whole point of PSLF buyback is to allow borrowers to pay money to “buy back” periods during which they were in forbearance. This way, the “lost months” can count retroactively for PSLF.

You have to be on an income-driven repayment (IDR) plan for a payment to count towards PSLF. It used to be that if you weren’t on an IDR plan in the past, you were out of luck, even if you were working at a not-for-profit employer at the time.

But with PSLF buyback, you can correct this past mistake once you reach 120 total months of qualifying employment. If you apply before you hit 120 months, your application won’t be processed. So you need to wait until you've reached the full 10 years of qualifying work, then submit your buyback request for the months you're missing.

Why PSLF buyback now affects so many people

Because of the SAVE plan forbearance and how long it lasted, many public-sector borrowers are eligible for PSLF buyback (or should be).

The SAVE forbearance that started in June 2024 lasted longer than a year, which means the Department of Education is supposed to review tax returns, year by year, to calculate the payment amount.

So while PSLF buyback impacts a large number of borrowers today, in the future it should be far more of a niche program. Forbearance rules are changing, and it'll be much harder to sit in forbearance for years the way borrowers could during the SAVE litigation.

How much more buyback could cost

Let’s assume a borrower earns $120,000 a year, has a family of four, and has $200,000 in student debt.

That borrower’s SAVE plan payment would have been $244 per month, but their RAP plan payment would be $900 a month.

Assuming a 15-month buyback period, that would be $2,928 total under SAVE and $10,800 total under the RAP plan.

Buyback cost factor	Under SAVE	Under RAP
Monthly payment	$244	$900
15-month buyback total	$2,928	$10,800

That's nearly $8,000 more for the same forgiveness benefit. But the PSLF buyback changes will hit certain groups way more than others.

PSLF buyback changes: Big negative impact for modest income earners, not a big deal for high income earners

Using the above example, you can see how someone with a moderate income would face much larger payments under the recent PSLF buyback changes.

However, a high-income physician would not really notice much of a hit with the elimination of SAVE under the buyback formula. If you pay an extra $10,000 to have $400,000 of student loans wiped out and you earn over $250,000 a year, this represents a higher cost, but it’s not as big a hit percentage-wise as it is to a lower-earning household.

Build a PSLF strategy that includes buyback

Buyback has survived, and you should certainly apply for it and plan for it. But it’s important to build a student loan repayment plan that incorporates PSLF buyback while also preparing for the possibility that it could be repealed one day. In practice, that means not banking your entire payoff strategy on buyback being there years from now.

If you want a custom PSLF strategy to maximize your return on investment (ROI), book a consultation with our team of PSLF experts.