Yurou Guan | Moment | Getty Images
Under the Trump administration, more than 72,000 student loan borrowers who are likely eligible for debt forgiveness are stuck in a backlog of applications waiting for the relief.
Some of them, like 46-year-old April Osteen, owe just a single payment. Others, like Dan Carrigg of Rhode Island, have been waiting a year for the government to respond to their application.
“There are no updates,” Carrigg said. “They tell you nothing.”
The program experiencing the challenges is known as Public Service Loan Forgiveness Buyback.
That opportunity, first offered by the Biden administration, allows borrowers who qualify to have their debt excused under PSLF to retroactively pay the U.S. Department of Education — or “buy back” — any months they missed because they were enrolled in a forbearance or deferment. (Those are different periods during which borrowers’ loan payments are on hold.)
PSLF, which President George W. Bush signed into law in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 120 payments, or 10 years.
The Buyback program became especially popular after courts blocked the Biden-era Saving on a Valuable Education, or SAVE, plan in the summer of 2024.
Millions of student loan borrowers who signed up for SAVE were automatically enrolled in a forbearance. Those borrowers found their progress towards PSLF frozen throughout the SAVE payment pause, even as they continued to work in eligible public service.
How could I be one payment away from loan forgiveness, only to be told I couldn’t make that final payment?
The latest court filing shows 72,730 PSLF buyback requests were pending with the U.S. Department of Education as of the end of July. The bottleneck has only worsened since June, when 65,448 applications were under review by the Trump administration. In May, the backlog was close to 59,000.
(The Education Dept. has regularly shared the data on pending buyback requests as part of a lawsuit the American Federation of Teachers filed against it. The teacher’s union alleges the agency is blocking borrowers from their rights.)
“The Biden Administration introduced the Public Service Loan Forgiveness buy-back program to allow borrowers to ‘buy’ eligibility into the program — weaponizing a legal discharge plan for political purposes,” said Ellen Keast, deputy press secretary at the Education Department.
“The Department is working its way through this backlog while ensuring that borrowers have submitted the required 120 payments of qualifying employment,” Keast said.
CNBC spoke with three of the borrowers in the buyback backlog about how the delayed loan cancellation is affecting them.
“Long delays in PSLF buyback processing must be corrected immediately so that public service workers who have provided essential local services are not deprived of the relief they’ve earned,” said Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending.
‘Uncertainty continues to shape every financial decision’
April Osteen with her dog
Courtesy: April Osteen
Osteen, an administrative coordinator at the University of South Carolina, submitted her buyback request in January. Nearly seven months later, she still hasn’t received an answer from the Education Department.
The government has recorded that she’s made 119 out of the 120 required qualifying payments for PSLF — and so she’s trying to buy back just one monthly payment to get her debt cleared. Her momentum toward the relief was stalled during the SAVE issues.
“I reached out repeatedly to both my loan servicer and the Department of Education, practically begging for help,” said Osteen. “At one point, I remember telling a representative, ‘I just want to pay—please let me pay!'”
“How could I be one payment away from loan forgiveness, only to be told I couldn’t make that final payment?” she said.
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Osteen’s roughly $26,000 remaining student loan balance prevents her from taking on new expenses, even for urgent repairs needed on her house in Simpsonville, South Carolina.
“I need to address issues like diseased Sycamore trees that pose a safety risk, a collapsing wooden fence and serious drainage problems in the backyard and driveway,” she said.
Her monthly student loan payments of up to around $350 have made it difficult to save throughout her career. Without much in savings, she considered taking out a personal loan to pay for the work on her house. But then she thought of her education debt.
“I’m hesitant to take on a new monthly payment while I still owe student debt — debt that should have already been discharged under the PSLF program,” Osteen said.
“This uncertainty continues to shape every financial decision I make.”
‘I check my email 10 times a day’
Josh Harner
Courtesy: Josh Harner
Josh Harner, a teacher at a prison in Illinois, has been waiting for a response from the Education Department to his buyback request since early December — more than eight months ago.
His loan account shows that he’s made 117 qualifying monthly PSLF payments, though he says he’s worked far longer in the public sector. During his over-decade-long career, Harner has helped more than 250 people earn their GED credential, a high school diploma equivalent, he said.
And so he said it’s frustrating to be waiting so long for loan forgiveness. His remaining balance is a little over $120,000.
“I check my email 10 times a day,” Harner, 38, said, about his buyback request.
“I have taken every step — countless phone calls, emails, complaints,” he said. “The federal government can’t handle the management of all these loans.”
The main reason Harner wants his debt erased, he said, is so that he can save more for his 15-year-old son’s upcoming college bills, and hopefully spare him from the stresses of student loans.
“It will feel much better saving the money toward my son’s education,” Harner said. “I didn’t want him to have to worry about how to pay for college or getting into debt to do it.”
‘They tell you nothing’
Dan Carrigg
Courtesy: Dan Carrigg
Carrigg, an associate teaching professor at the University of Rhode Island, submitted his buyback request a year ago, in Aug. 2024. He’s listed as having made 108 out of the 120 qualifying payments.
“I have considerably more than 10 years [of] certified employment,” said Carrigg, 41.
Carrigg has contacted his local lawmakers and his state attorney general about the issue, but has had no success. “I still call Federal Student Aid every week or two,” he said. “I don’t know what else to do.”
He has been unable to get his remaining roughly $15,000 student debt excused.
“I am trying to pay Uncle Sam and taxpayers a lump sum of money to complete and finish off my loan, but I cannot get FSA [Federal Student Aid] to provide me with the offer letter that states how much I should make the check out for.”
“And without that, I cannot pay them,” he said. “It is maddening.”
Throughout his life, Carrigg said, he’s needed to make a number of sacrifices because of his student debt.
He’s taken on a second teaching job at night, and forgoes many discretionary purchases.
“We don’t take vacations every year,” he said.
With his student debt forgiven, he and his wife would be able to direct more money toward their mortgage with the goal of no longer having a housing payment in their later decades.
“We’re not so young anymore,” Carrigg said.
“And we can start saving a bit more for retirement, which is now coming up faster and faster,” he said. “We’re getting closer to Medicare age than student loan age.”
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