Key insights
- The backlog of Public Service Loan Forgiveness (PSLF) Buyback applications has decreased, potentially freeing up funds for borrowers. Faster processing could lead to increased consumer spending and savings for public service workers, providing a marginal boost to the economy. However, the overall impact on US equities is likely to be small.
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For the first time since it began publicly releasing data, the Department of Education has reduced its backlog of loan forgiveness applications for public service workers.
In April 2025, the department began releasing data on applications for the Public Service Loan Forgiveness Buyback program as the result of a lawsuit. Since last year, the Education Department has struggled to keep up with applications, and the number of pending PSLF Buyback applications has risen each month.
However, in the latest report from April 2026, the backlog of PSLF applications fell by about 1,720 to 88,000.
In that month, 6,870 applications were approved or denied, the largest number of application decisions in one month since the Education Department began reporting PSLF Buyback applications.
The Education Department also said in the report that of the 88,000 pending applications, about 18,000-19,000 are duplicates that will be removed.
Borrowers have to continue making student loan payments until their PSLF Buyback is approved. Monthly student loan payments tend to reduce the amount a borrower can spend and save, making a speedy PSLF Buyback process important for borrowers' finances.
The PSLF program forgives federal student loan borrowers' balance after 10 years of payments while the borrower was a public servant. Public servants are those who work for a government or non-profit, such as teachers, police officers, or nurses at non-profit hospitals.
The PSLF Buyback program allows borrowers who were in forbearance or deferment, which don't normally count toward the 10-year requirement, to pay a lump sum equal to what they would have paid if their payments hadn't been paused. Once they pay back what they owe, their remaining debt will be forgiven.
Some PSLF borrowers say they have waited more than a year for a decision on their PSLF Buyback. And after waiting, borrowers on the now-defunct Saving for a Valuable Education plan could pay thousands more dollars to receive forgiveness than they expected.
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