86,000 Public Servants Stuck In 3-Year Loan Forgiveness Queue

0:00This is the College Investor audio show. We're so glad you're hanging out with this today. Here's the article we're talking about. 86,000 public servants are stuck in three-year loan forgiveness queue. Kind of crazy, but we'll talk about it and we'll dive in in just a second. Anytime you hear an article that we talk about on the podcast, you can always see the article, dive into it, get the resources that we mentioned at thecollegeinvestor.com, type in the words of the podcast right into the search bar and you'll find the article. You can also ask us questions, get to know us and we'd love to just help you along. Like wherever you are in your money journey, you can just follow us on social media, search for the words the College Investor and you'll find us. All right, let's take a look at these. 86,000 public servants stuck in three-year loan forgiveness queue. A new federal court filing. And if you want, you can read that filing in all of its glory inside this article at thecollegeinvestor.com. It shows that borrowers seeking public service loan forgiveness, PSLF,

1:03credit through the buyback process could face weights of get this three years under the current processing speeds. The latest status report from the U.S. Department of Education reveals that 86,520 buyback applications for PSLF were still pending as of January 31st, 2026. During January, 2,430 applications were decided. Not good. At that pace and assuming no new applications are actually submitted, clearing the existing backlog is going to take, oh, I don't know, 35 months. In reality, new requests continue to arrive each month and processing times have varied month to month, meaning the wait time could be even longer than that. For public service workers, or for public service workers, who have already reached or are near 120 qualifying payments, the numbers suggest a long period of uncertainty.

2:03PSLF buyback backlog by the numbers. Let's take a look. So the January 26th data shows that 5,030 applications received during the month, and then there were 2,400 or so applications decided up from 1,930 last month. 1,980 were approved, 360 denied, 90 closed without a decision, because of missing information. All right, that's the data. As of the end of January of 26, 86,520 remained pending. This is an increase from 83,370 in December. Even though 1,980 or approvals were issued in January, all the incoming applications exceeded decisions. So the pending total remains kind of elevated here. At 2430 decisions per month, if they keep that pace, dividing 86,520 by the current pace is a little over 35 months, just shy of three years. That estimate assumes processing doesn't slow down, and that new filings don't come in.

3:09Separate or separate from buyback, 18,000 plus PSLF discharges were processed in January. However, these borrowers went through, you know, the normal process, and were not necessarily seeking buyback. Here's how buyback is calculated for this. PSLF buyback is designed to buy back the months that didn't count toward the 120 payment requirement due to being in a qualified deferment or a forbearance period. The amount of a borrower must pay depends largely on how long it deferment or forbearance lasted, and what repayment plan would have applied during that time. If the pause lasted less than 12 months, the department generally looks at the lowest legally available income-driven repayment IDR plan before and after the pause, and then just uses the lower monthly payment amount to calculate the buyback. That might be confusing. If you need to dive deeper on this, you can see the article. Again, it's at the collegeinvestor.com.

4:09But because the save plan is no longer considered a legally available repayment plan, it's not used in the calculation. Instead, the repay plan has been used. If the pause lasted over a year, borrowers must provide tax returns and family size information for each calendar year involved. So the department then estimates what the borrower's payment would have been under the lowest available IDR plan each year, based on income and household size. If the standard 10-year repayment amount would have been lower than the calculated IDR plan, payment, the department uses the standard amount instead. For any borrowers who are still in the save forbearance, that means a period under repay and the current period under IBR. Barbers who were not enrolled in an IDR plan before or after the pause,

5:10have to still provide income documentation, though. But without those records or proof that no tax filing was required, the department defaults to the 10-year standard repayment plan, repayment plan, which may increase the total buyback cost. We do have a full guide, thankfully, of how PSLF buyback is calculated. You can dive deep into that so you can get more information, because to listen to that formula is kind of difficult to follow. We get it. You can find it, though, inside this article online on our website. So here's what borrowers can do now if you're in this situation. While the status report reflects aggregate data, borrowers awaiting buyback decisions can take some practical steps. Three things to do. Number one, confirm qualifying payment counts. Just ensure that employment certifications are up to date and accurately reflect it. Number two, respond quickly. I cannot underline underscore, you know, a bold italicize that word enough quickly to documentation requests. 90 buyback applications in January were closed with no

6:17decision because of missing information. Number three, if you're in forbearance, start your payments getting back on a repayment plan and simply working, maybe a faster course of action. Now borrowers currently in forbearance might want to switch to an active repayment plan and just simply finish PSLF the normal way and not deal with buyback at all. The monetary saving might be zero or even minimal, but the time savings may be huge who wants to wait three years anyway and just probably do it the normal way. If you want to find out more and ask us questions and we can give you the guidance that you need to get back on track, you can follow us and like us on social media. Just search for the college investor and you'll find us. Thanks so much for stopping by today and we'll talk to you again real soon.