Want Student Loan Forgiveness Sooner? This Buyback Program Could Be the Answer
If you are already registered Public Service Loan Forgiveness Program If you were due for debt relief last year or expected to hit the 120 payment mark this year, a new plan could help you get there Save payment hold.
PSLF provides student loan forgiveness to teachers, nurses and other public service workers who make 120 qualifying payments (equivalent to 10 years) while holding qualifying jobs. this PSLF buyback program Offers eligible borrowers the opportunity to “buy back” the months of nonpayment that do not count toward forgiveness during a loan deferment or forbearance period.
The buyback option can help some borrowers in the PSLF program get debt relief more quickly, but it’s not a quick fix for accelerating PSLF progress. Elaine RubinDirector of Corporate Communications Edvisors.com. You need 10 years of service and meet other conditions to qualify. For example, if you have only been in a teaching position for five years, you cannot now use this plan to pay off the remaining five years of your payments to obtain debt relief.
Here’s how to determine if you qualify for the buyback program and how to apply.
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What is the PSLF Buyback Program?
The PSLF Buyback Program allows you to buy back certain skipped payment months and count them as qualifying payments under PSLF, which will accelerate debt cancellation for a limited number of eligible borrowers.
For example, if you are a teacher and have worked for 130 months, you have exceeded the 10 years required to qualify for public loan forgiveness. But if your student loans are in deferment or deferment for 15 months, you may only have made 115 monthly payments. Typically, this means you are not yet eligible for forgiveness under the PSLF program.
Under the government’s PSLF buyback program, you can now make a payment (one payment or multiple payments) within 90 days to cover the five months it takes to meet your obligations and receive debt relief.
How much do you need to buy back? It depends on how many months you are away from your 120 goal and what your monthly payments are. If you’re on an income-driven repayment plan, your monthly payments could be as low as $0, Rubin said. But if your monthly payment is $200 and you only make 117 payments, you’ll need to pay $600 to complete the buyback process.
After you submit your buyback application, the government will detail the total amount you must pay to the servicer within 90 days in order for your balance to be forgiven.
Who is eligible for PSLF buyback?
There are several requirements to qualify for PSLF buyback:
In other words, you cannot request a buyback if you have less than 10 years of service, and buybacks do not apply to loans that are in default or have been discharged.
You can view your PSLF eligible payments at StudentAid.gov, the program’s central dashboard. You can view More details on eligibility requirements can be found here.
How to apply for PSLF buyback program?
There are Application steps For PSLF Buyback Program:
- If you have an unreported qualifying period of employment, use PSLF help tool.
- Pending review of your situation Payment frequency adjustment Available with PSLF credit.
- Confirm the missing payment month you want to buy back and make sure you have approved qualifying employment for the same month (see how Verify these months).
- Submit a repo request via PSLF reconsidered.
- Wait to hear back from StudentAid.gov regarding your final payment amount.
Rubin warns that the app can be a bit confusing. “Be patient, but make sure your information is on file,” Rubin said.
You can check the status of your application by studentAid.gov.
If I join SAVE, can I apply for a PSLF buyback?
Yes, you can apply for PSLF buyback if you are enrolled in the Saving on a Valuable Education plan. this save programis an income-driven repayment plan that is considered a qualifying type of forbearance under the PSLF buyback.
SAVE borrowers’ payments have been on hold since the summer, so if you’re a PSLF borrower who was due to receive debt relief in the fall or winter, you’re a prime candidate for the buyback program.
How long will the PSLF buyback program last?
Rubin said the PSLF buyback program is currently open and does not have a strict application deadline.
That being said, once you submit your application and find out the buyback amount, you have 90 days to pay the buyback amount to your loan servicer. If you fail to pay the full amount within that period, you will need to start a new application.
With a new administration in the White House, the long-term fate of the PSLF buyback program is unclear. Rubin recommends taking the time to determine your eligibility and submit an application now while PSLF buyback is still available.
