The Trump student loan repayment plan is changing the math for borrowers trying to win back months of credit toward Public Service Loan Forgiveness. The Department of Education said buyback payments for months spent in deferment or forbearance on or after July 1, 2024, will now be calculated under a different formula.
The shift matters because PSLF forgives student debt after 10 years of qualifying payments for government and nonprofit workers, and some borrowers use buyback to recover months that would otherwise leave them short of the threshold. Under the old approach, some of those buyback amounts were based on the SAVE formula, but the new guidance moves away from that method as the department unwinds the income-driven plan it eliminated.
FSA said it will ask borrowers for income and family size information if they were not on the IBR, PAYE or ICR plan on either side of the period being bought back. That detail could affect how much some borrowers owe to restore credit for deferment or forbearance months, and it comes as the backlog remains sizable: the Education Department said 88,170 PSLF buyback applications were pending as of February 28.
The latest figures show the system is moving, but not fast enough for many people waiting in line. In February, the department received 4,180 buyback applications and processed buyback relief for 12,640 borrowers. Those numbers suggest officials are still working through demand even as they revise the rules that determine who can use the program and what it costs.
The buyback change is only one part of a broader reset. Borrowers enrolled in SAVE will start getting notices in July telling them to transition to a new repayment plan, and the Trump administration's new rule limiting eligibility for PSLF is also set to take effect that month. The rule redefines what public service means and would exclude employers that participate in illegal activities.
That broader definition has drawn fire from some lawmakers and advocates, who say it could cut off relief for borrowers who work for companies that do not align with the administration's political views. Nonprofits have already filed lawsuits challenging the rule, setting up a legal fight just as borrowers are being pushed out of one repayment system and into another.
For borrowers chasing forgiveness, the immediate answer is no longer simply whether they can buy back missed time. It is whether the department's new formula, the July transition notices and the coming PSLF eligibility rule leave them with a path that is still affordable enough to finish the 10-year race.
