Summary
The U.S. Department of Education has changed how lump-sum payments for the Public Service Loan Forgiveness (PSLF) Buyback are calculated. This change may increase costs for nearly 90,000 borrowers seeking loan forgiveness. The alteration might make it more expensive for individuals trying to resolve periods of non-payment in their loan history.
Key Facts
- The PSLF Buyback program lets borrowers count certain past non-payment periods toward loan cancellation.
- A new calculation method for required lump-sum payments may increase costs for borrowers.
- This change impacts approximately 90,000 borrowers with pending PSLF Buyback applications.
- Borrowers affected are usually working in government or nonprofit jobs.
- Under traditional PSLF, borrowers need to make 120 qualifying monthly payments.
- PSLF Buyback started in 2023 to help those with non-counted deferment or forbearance periods.
- The recalculated payments could now be higher, especially for those in the SAVE repayment plan.
- The SAVE plan and income-driven repayment options are also undergoing changes.
