Headline: 86,520 PSLF buyback requests stuck in limbo — and that’s just one stress point in a messy year for federal student loans
Quick snapshot
– What broke: A recent court filing revealed 86,520 unresolved Public Service Loan Forgiveness (PSLF) buyback requests.
– Who’s hit: Public servants and other borrowers in federal student loan programs.
– Where: The U.S. federal student loan system.
– Why: Policy reversals, litigation, servicer errors and processing bottlenecks have created a tangled backlog.
– When: These issues unfolded across 2026 as court rulings and negotiated settlements forced major changes.
What actually happened
A court filing put a number on the problem: more than 86,000 PSLF buyback requests are unresolved. That backlog can translate into wait times approaching three years for people who expected quick closure. The disruption didn’t come from one mistake; it followed a series of policy shifts (including the end of the SAVE overhaul), legal fights and implementation stumbles that repeatedly changed who qualifies and how servicers must process cancellations.
Who suffers — and who’s still moving forward
– Stalled borrowers: Many public servants who thought they were close to forgiveness are trapped in administrative queues, waiting on employment verifications and servicer fixes.
– Moving borrowers: People who stuck with older, technical pathways (IBR, PAYE, ICR) and kept their paperwork current have seen meaningful cancellations in some cases.
– The SAVE fallout and legacy plans
When SAVE was cut back across 2026, it didn’t get replaced with a single clear alternative. Instead, borrowers were pushed back onto legacy income-driven plans, creating rushed decisions about which repayment path would preserve qualifying payments. That fragmentation turned a broad reform into a patchwork of old rules — and created fast-approaching deadlines for anyone trying to protect progress toward PSLF.
How forbearance and paused months count
Good news for some: months spent in certain forbearances (including some tied to SAVE adjustments) can still count toward the 120 qualifying payments for PSLF, but only if employment is full-time with an eligible employer and documentation is filed correctly. That’s why advocates keep repeating the same practical advice: certify employment often and keep records.
Tax shock: forgiveness may be taxable again
A major financial wrinkle: pandemic-era tax relief for discharged student debt expired. As of January 1, 2026 (following the end of the exclusion), many discharges under income-driven plans can count as taxable income. That means borrowers who once expected a clean write-off could face a hefty tax bill the year their loans are forgiven. Timing matters — and so does professional tax advice.
New employer rules narrow PSLF eligibility
Starting July 1, 2026, a rule finalized under the prior administration changed how some nonprofit and contractor employers count toward PSLF. Coupled with the SAVE freeze and the processing backlog, that rule further tightened the path to forgiveness for some workers. The result: more paperwork, closer scrutiny of employer status and a more conditional road to PSLF.
What this means for you (practical steps)
– Certify employment now and do it regularly. Don’t assume a one-time form will be enough.
– Keep every pay stub, employment letter and certification receipt. Paper trails matter.
– If you’re near 120 qualifying payments, contact your servicer and follow up in writing until you get confirmation.
– Talk to a tax professional about potential liabilities from any expected discharge.
– If you’re deciding whether to pursue forgiveness or accelerate payments, run the numbers: a tax bill could change the math.
– Watch for updated guidance from the Department of Education and servicers; procedures are evolving and timing remains uncertain.
What to watch next
Court rulings, departmental guidance and servicer process updates will determine how quickly the backlog clears and whether previously paused programs resume. Until those pieces fall into place, expect uneven outcomes — and treat documentation and proactive outreach as the best defenses against administrative hiccups. Some borrowers will keep making progress under legacy plans; others are stuck waiting. If you’re affected: document everything, certify employment often, and get tax advice sooner rather than later.
