The Education Department quietly updated its online guidance this summer to reflect that a key student loan forgiveness benefit will not be available for the newest repayment plans that launched in July. The updates are a blow for borrowers, and particularly those who take out new federal student loans going forward, as they may now be cut off from the benefit entirely.

The update centers on PSLF Buyback, a program related to Public Service Loan Forgiveness. PSLF allows borrowers to discharge their federal student loans in as little as 10 years if they work in certain full-time public service careers while making qualifying payments on their loans. PSLF Buyback is a related program that gives borrowers a safe harbor to “buy back” PSLF credit for nonpayment periods that didn’t count toward loan forgiveness, particularly certain deferment or forbearance periods.

But under the Education Department’s new guidance, borrowers enrolled in either the Repayment Assistance Plan (or RAP) or the new Tiered Standard Repayment plan will not be eligible for PSLF Buyback for periods in which they are in one of those plans. That may severely limit access to this student loan forgiveness benefit going forward.

Buyback Opportunity Is Important New Student Loan Forgiveness Benefit For PSLF

The PSLF Buyback program is a relatively new option that was enacted under updated regulations in 2023. The program is designed to give borrowers a fallback option if they wind up working in qualifying, full-time public service employment for the required 10-year (or 120-month) period, but have gaps in qualifying payments due to certain deferment and forbearance periods. A prime recent example is the involuntary SAVE plan forbearance, as millions of student loan borrowers were forced into an administrative forbearance for two years or longer due to legal challenges and associated court orders.

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