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2w ago

Education Dept Raises PSLF Buyback Costs as Delays Grow

Democrats filed resolutions to block a July rule that would let the education secretary cut some nonprofits out of loan‑forgiveness eligibility.

A person walks past the U.S. Department of Education on March 20, 2025 in Washington, DC.
Sen. Cory Booker, D-N.J., speaks at the National Action Network (NAN) Convention in New York, Saturday, April 11, 2026. (AP Photo/Angelina Katsanis)
The U.S. Capitol, center, is seen with the Supreme Court of the United States, left, and the Library of Congress, right, Thursday, April 9, 2026, in Washington. (AP Photo/Rod Lamkey, Jr.)
A view of the U.S. Capitol dome on Capitol Hill in Washington, Monday, April 13, 2026. (AP Photo/J. Scott Applewhite)

Overview

  • The Education Department is no longer using the SAVE plan to price PSLF buybacks for deferment or forbearance periods on or after July 1, 2024, and is instead applying older income‑driven formulas like Income‑Based Repayment that produce higher lump‑sum amounts.
  • Analysts say many public‑service borrowers now face buyback quotes that can run two to three times higher, with examples showing about $2,000 more for a typical single borrower and nearly $4,200 more for a married borrower with two children.
  • Democratic lawmakers introduced Congressional Review Act resolutions on Tuesday to overturn a separate rule that would narrow which nonprofit employers qualify, as lawsuits from cities and nonprofits challenging that policy continue.
  • A court filing and department data released Wednesday show 643,000 borrowers stuck in queues, including 553,966 pending income‑driven repayment requests and 89,720 PSLF buyback applications, with the buyback backlog growing month over month.
  • The department says it will terminate the SAVE repayment plan this summer and give borrowers roughly 90 days to switch plans as it launches a new Repayment Assistance Plan, a shift that could drive a surge of applications and further strain processing.