Thousands of Public Servants Trapped in Delays Over PSLF Student Loan Buyback Backlog

Thousands of American public servants—including government employees, mental health professionals, and non-profit workers—are caught in extended legal and administrative limbo due to massive processing delays in the federal Public Service Loan Forgiveness (PSLF) Buyback program. According to figures from the U.S. Department of Education, a backlog of approximately 82,000 applications remains pending. The program, created in 2023 under the Biden administration, was designed to allow eligible borrowers who completed 10 years of public service to make lump-sum retroactive payments covering months spent in administrative forbearance, enabling them to reach the required 120 qualifying monthly payments for full debt cancellation. The backlog stems from a sharp surge in application volume alongside administrative staffing reductions at the Office of Federal Student Aid under the Trump administration. The influx grew significantly after millions of borrowers enrolled in the SAVE plan were placed into mandatory forbearance amid state-level legal challenges, rendering those months ineligible for standard PSLF credit without a formal buyback. Impact on Public Sector Borrowers: Processing Delays: While initial department guidelines promised a review window of 45 business days, applicants routinely report waiting between 10 to over 20 months without receiving case updates. Economic Stagnation: Borrowers report being unable to make life-changing financial decisions—such as changing careers, taking out home mortgages, or switching job sectors—out of fear of losing public service eligibility. Third-Party Servicing Transfer: To address the bottleneck, federal officials delegated buyback processing to external loan servicing companies in July, though system integration errors further slowed initial progress. Additionally, recent policy changes by the Education Department have restricted newer repayment options—such as the Repayment Assistance Plan—from buyback eligibility, effectively limiting future accessibility for new public sector borrowers.