Student loan forgiveness program has a 72,730-person backlog. Here's what borrowers need to know
But that program, called PSLF Buyback, has been experiencing some challenges of late.
Chief among them: As of July 31, there's a 72,730-person backlog of borrowers waiting to have the Department of Education process their applications, according to a new court filing. That's up from 65,448 borrowers as of the end of June.
Some of the borrowers CNBC has spoken with have been waiting for half a year or more for answers. Others have only a few months' payments to make.
PSLF, which President George W. Bush signed into law in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 120 payments, or 10 years.
Here's what borrowers need to know about PSLF Buyback.
The Biden administration first offered PSLF Buyback in the summer of 2023.
The opportunity allows borrowers who've hit 120 months of qualifying public service employment to submit a request to the Education Department to retroactively pay for — or "buy back" — any months they missed because of a forbearance or deferment.
During those payment pauses, borrowers often don't get credit toward PSLF.
After you've submitted your buyback request, the Education Dept. is supposed to send you an offer letter. That should include the number of monthly payments you missed during your public service history, and a chance to pay that bill now in exchange for student loan forgiveness.
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How the government calculates your missed monthly payments is complicated, said higher education expert Mark Kantrowitz. But it's usually based on your bills before and after the period during which you weren't making qualifying payments, Kantrowitz said.
Some people who had low incomes are eligible for zero-dollar payments, and they might [not?] have to pay anything to get their debt cleared.
Once you get the offer letter, Kantrowitz said, "You must pay the amount to your loan servicer within 90 days."
You can apply for the Buyback program through the PSLF Reconsideration portal on your Federal Student Aid account, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
Consumer advocates recommend keeping track of when you submitted your buyback request (you should receive a confirmation email) and your recorded number of qualifying PSLF payments, so far. That number should be accessible on your student loan account.
Buyback applications have piled up under the Trump administration.
The latest court filing shows 72,730 PSLF buyback requests were pending with the government as of the end of July. The bottleneck has only worsened since June, when 65,448 applications were under review by the Trump administration. In May, the backlog was close to 59,000.
(The Education Dept. has regularly shared the data on pending buyback requests as part of a lawsuit the American Federation of Teachers filed against it. The teacher's union alleges the agency is blocking borrowers from their rights.)
"The main issue with the PSLF Buyback program is that it is apparently a labor-intensive process to review these forms, and there isn't a lot of resources dedicated to the program," Nierman said.
"So it could take a very long time for borrowers to get a response."
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The Buyback program became especially popular after courts blocked the Biden-era Saving on a Valuable Education, or SAVE, plan in the summer of 2024.
Millions of student loan borrowers who signed up for SAVE were automatically enrolled in a forbearance. Those borrowers found their progress towards PSLF frozen throughout the SAVE payment pause, even as they continued to work in eligible public service.
"The Department is working its way through this backlog while ensuring that borrowers have submitted the required 120 payments of qualifying employment," said Ellen Keast, deputy press secretary at the Education Department.
Despite the delays, "if you are eligible for the Buyback, there's no harm in submitting the application," Nierman said.
"But if you can afford payments in other repayment plans, don't rely solely on the Buyback to get you to 120 qualifying payments, particularly if you only need a few months of credit to reach forgiveness," she said.
You can apply for Buyback and also submit paperwork to switch into another repayment plan at the same time.
While you can remain in the SAVE forbearance for now, borrowers' debts began accruing interest again on Aug. 1.
If you continue making payments on your loans after you've applied for a buyback offer, or if the Education Department finds you've made more than the required 120 qualifying payments for PSLF, you're entitled to a refund from the government, Kantrowitz said.
He's heard from people who've gotten one in this scenario.
If you're running into issues with your PSLF Buyback request, you can file a complaint with the Education Department's feedback system at Studentaid.gov/feedback. Problems can also be reported to the Federal Student Aid's Ombudsman, said Kantrowitz.
But after the Trump administration's layoffs at the Education Department, "I think there are only one or two people answering complaints right now," said Stephanie Sampedro, who used to work in the Federal Student Aid office at the agency. Sampedro was terminated in March.
"It might be more effective to complain to their congressmembers," Sampedro said.
Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending, recommended filing a complaint with your state attorney general's consumer protection office and the Consumer Financial Protection Bureau.
"Document everything," Herbin added. "Keep records of payments, correspondences and account changes."
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Walmart earnings China's $11 trillion stock market is a headache for both Xi and Trump US warns that India is 'cozying up' to Russia Tesla almost halves UK lease fee as sales slump: Report Goldman: S&P 500 earnings have blown past forecasts Bond market's rate-cut bets hit decisive stretch with Powell Novo Nordisk stock rises after Wegovy gets new US approval US-listed shares in Danish drugmaker Novo Nordisk (NVO) are gaining before the bell, as investors welcome a US boost for its flagship Wegovy. Novo is also reportedly planning to hold off from charging more at next year's launch of pill versions of its weight-loss injections, a departure from usual practice as President Trump puts pressure on pharma companies to cut US prices. Reuters reports: Shares in Novo Nordisk rose on Monday, after the Danish drugmaker got US approval for its weight-loss drug Wegovy to treat a serious liver condition. That was positive news for Novo which has lost more than one-third of its market value in recent weeks. ... Three weeks ago, investors wiped $70 billion off its market value, after Novo — which became Europe's most valuable listed company following the launch of Wegovy in 2021 — issued a profit warning and named a company veteran as new CEO. On Friday, the U.S. Food and Drug Administration granted accelerated approval for Wegovy to treat metabolic dysfunction-associated steatohepatitis, or MASH, making it the first GLP-1 class therapy cleared for the progressive liver condition that affects around 5% of adults in the United States. Read more here. US-listed shares in Danish drugmaker Novo Nordisk (NVO) are gaining before the bell, as investors welcome a US boost for its flagship Wegovy. Novo is also reportedly planning to hold off from charging more at next year's launch of pill versions of its weight-loss injections, a departure from usual practice as President Trump puts pressure on pharma companies to cut US prices. Reuters reports: Shares in Novo Nordisk rose on Monday, after the Danish drugmaker got US approval for its weight-loss drug Wegovy to treat a serious liver condition. That was positive news for Novo which has lost more than one-third of its market value in recent weeks. ... Three weeks ago, investors wiped $70 billion off its market value, after Novo — which became Europe's most valuable listed company following the launch of Wegovy in 2021 — issued a profit warning and named a company veteran as new CEO. On Friday, the U.S. Food and Drug Administration granted accelerated approval for Wegovy to treat metabolic dysfunction-associated steatohepatitis, or MASH, making it the first GLP-1 class therapy cleared for the progressive liver condition that affects around 5% of adults in the United States. Read more here. Powell at Jackson Hole, Walmart earnings: What to watch this week The investing world is gearing up for Jerome Powell's comments at Jackson Hole — the most important Fed monetary policy speech of the year, says Yahoo Finance's Myles Udland. The Fed chair's appearance dominates the week's calendar for markets, which also brings a clutch of retail giant earnings. Myles reports: Read more here. The investing world is gearing up for Jerome Powell's comments at Jackson Hole — the most important Fed monetary policy speech of the year, says Yahoo Finance's Myles Udland. The Fed chair's appearance dominates the week's calendar for markets, which also brings a clutch of retail giant earnings. Myles reports: Read more here. Goldman team likely to stay in Trump's crosshairs President Trump has recently offered a few choice words on the work from Goldman Sachs' economics team, led by long-time economist Jan Hatzius. The team is unlikely to garner some praise from Trump today. Here's what Hatzius and his team served up in a new note on Monday morning: "After the recent downward revisions to payrolls, our estimate of trend job growth is now clearly below even that . And while the picture could change again for better or worse, future revisions to job growth are more likely to be because the birth-death model is likely a bit too generous, changes in trend payroll growth can initially be partially misattributed to changes in seasonal factors, revisions to the raw payrolls data tended to be negative in past slowdowns, data from ADP raise doubts about officially reported payroll growth in healthcare, and the household survey is now overstating immigration and employment gains. Like the slowdown in activity growth this year, the slowdown in job growth appears to have arisen from more than just the direct effects of trade and immigration policy changes. We are particularly worried that 'catch-up hiring' in a few industries now appears over and job growth outside those industries has fallen to around zero. And while job openings remain at a decent level, they started to decline again earlier this year." President Trump has recently offered a few choice words on the work from Goldman Sachs' economics team, led by long-time economist Jan Hatzius. The team is unlikely to garner some praise from Trump today. Here's what Hatzius and his team served up in a new note on Monday morning: "After the recent downward revisions to payrolls, our estimate of trend job growth is now clearly below even that . And while the picture could change again for better or worse, future revisions to job growth are more likely to be because the birth-death model is likely a bit too generous, changes in trend payroll growth can initially be partially misattributed to changes in seasonal factors, revisions to the raw payrolls data tended to be negative in past slowdowns, data from ADP raise doubts about officially reported payroll growth in healthcare, and the household survey is now overstating immigration and employment gains. Like the slowdown in activity growth this year, the slowdown in job growth appears to have arisen from more than just the direct effects of trade and immigration policy changes. We are particularly worried that 'catch-up hiring' in a few industries now appears over and job growth outside those industries has fallen to around zero. And while job openings remain at a decent level, they started to decline again earlier this year." Sign in to access your portfolio
Axios
3 minutes ago
- Axios
How your county is affected by "big beautiful bill" tax cuts
Americans dodged a big tax hike when Congress passed the "big, beautiful bill," making permanent the tax cuts of President Trump 's first term — and adding on a bunch more. Why it matters: Tax cuts free up money for folks to spend on other things — which could be dearly needed next year as wages still haven't caught up with inflation and tariffs threaten to push costs up further. The big picture: The average American will receive a federal tax cut of $3,752 in 2026 thanks to the bill, per an analysis from the Tax Foundation, a nonpartisan research group that mostly supports lower taxes. The intrigue: They may not feel much of a change. The map above compares the tax rate in 2026 with what it would've been had the big bill not passed and the 2017 tax cuts expired. By the numbers: The largest average tax cuts will be in Wyoming ($5,375), Washington ($5,372) and Massachusetts ($5,139). Taxpayers in West Virginia ($2,503) and Mississippi ($2,401) will see the smallest average cuts. How it works: The big bill not only made the 2017 tax cuts permanent, it added on new breaks: deductions for tips and overtime income, a cut for seniors and an expanded child-care tax cut. These are temporary provisions. Zoom in: Business owners will get some of the biggest cuts — thanks, in part, to tax breaks being made permanent for research and development expenses and other provisions. Those in high-tax coastal regions will also get big breaks, thanks to the increased cap on state and local tax deductions (known as SALT — also temporary). For example, the average tax cut in 2026 for Westchester County, N.Y. — a high-income New York City suburb poised for a big SALT payoff — is $6,644. But just to the south, in the Bronx, the average tax cut is $1,761. The largest average tax cuts are happening in mountain resort towns where high-earners and business owners live. In Teton County, Wy., residents will see an average tax cut of $37,373, the highest in the U.S. The smallest tax cuts are in rural counties — like Loup County, in Nebraska, where the average tax cut in 2026 is $824.
