Student Loan Updates for September 2026

September may be bringing cooler weather, but the student loan world certainly has not cooled off. This month, we have more insight into how PSLF Buyback amounts may be calculated, ongoing payment confusion across borrower accounts, and an important change involving late payments and PSLF eligibility. There is a lot to unpack, so let’s dive in.

More Buyback Calculation Insight

I know some of you are probably sick of hearing about the PSLF Buyback woes, especially if Buyback does not apply to you. But for those applying this year or next, the stakes are enormous.

We’ve had numerous conversations with practicing physicians and other professionals whose last student loan payment was years ago and only a few hundred dollars per month. Now, they are faced with two incredibly difficult options:

• Wait an uncertain amount of time, possibly more than a year, for a Buyback offer that could be $80,000, $90,000, or even $100,000 for high earners.

Or…

• Continue making regular four-figure payments toward PSLF, remain in a nonprofit job for two more years, and apply for forgiveness a couple of years from now without Buyback considerations.

Now imagine trying to make that decision without even knowing what the Buyback amount will be. We’ve met with many of you who are in that exact situation right now, and it stinks.

Luckily, I have some news for you today. No, the Department of Education still hasn’t provided clarity. But enough people have gone through the process that the protocol is becoming much clearer.

For periods lasting longer than one year, which applies to nearly everyone at this point, the Department of Education is going to request your tax returns from the same year your forbearance began. Since most borrowers were in the SAVE forbearance for two or more years, the Department will also request tax returns for each subsequent year. In other words, most of you will be submitting 2024 and 2025 tax returns to cover your SAVE forbearance period, and possibly 2026 returns for the partial year beginning in July 2026.

IDR payments are traditionally based on the prior year’s taxes, so we had every reason to believe the Department would request 2023 and 2024 tax returns. Because incomes generally increase from year to year, this is unwelcome news that could result in higher Buyback estimates for many borrowers, especially high-income earners.

While that may not be good news, simply being able to forecast these numbers more accurately is a significant improvement.

We also now know that the Department will use the REPAYE/PAYE/New IBR formula (they are all the same) to calculate the payments owed if you qualified for any of those plans:

Monthly Payment = 10% × [AGI − (150% of the Federal Poverty Guideline)] ÷ 12

If you did not qualify for one of those plans, the Department will use the original IBR formula:

Monthly Payment = 15% × [AGI − (150% of the Federal Poverty Guideline)] ÷ 12

One more Buyback development, and then I promise I’ll move on: Any deferments or forbearances that occur while using the RAP or Tiered repayment plans will not qualify for the Buyback program down the road.

The Payment Lottery, Brought to You by FSA

Payments are still a hot mess, and servicer communications are not helping.

Many borrowers have been receiving past-due emails from MOHELA that are completely erroneous. We’ve seen IDR letters showing the correct payment amount while the borrower’s servicer account shows $0, $5,000, or just about anything in between. Meanwhile, other IDR letters show $0 when the payment should be hundreds of dollars.

I am honestly not sure what is driving all of these errors. Servicers and ED had a full year to program their systems for the RAP plan, and the calculations aren’t exactly rocket science. What I do know is that all of this is incredibly frustrating for those who are impacted. So what should you do?

First, try not to get too worked up. Unfortunately, this is the new normal with federal loan repayment. Give it a few days or even weeks (if you can) and monitor your account to see whether the bugs resolve themselves. About 90% of the time, they do. If your online account still does not reflect the correct payment status and amount within a few days of the due date, contact your servicer. As always, do not let any payment deadlines lapse.

Borrowers having these issues should also log in to the FSA site (studentaid.gov) and view their payment plan and amount due. We’ve seen many instances where the FSA site actually displays the correct payment information. This doesn’t fix the problem, but it does let you know that you’re not crazy. You completed your application correctly, and it was actually processed.

No Tolerance for Past-Due PSLF Payments

I hope this is a nothingburger for most of you, but I wanted to put it on your radar just in case.

The original PSLF rules state that only “on-time” payments count toward PSLF. In practice, however, servicers have not treated student loan payments as late until they were 15 days past the due date. That grace period has likely helped many borrowers achieve PSLF on schedule.

But those days are over.

Fine print in the Big Beautiful Bill states that payments made even one day after the due date will not count toward PSLF. Perfect timing, given all the payment troubles we just covered. SMH.

Clarity Matters

When the rules are changing and servicer communications are inconsistent, it can be difficult to know what information you can trust. If you are navigating PSLF Buyback, questioning a payment calculation, or dealing with conflicting information from your servicer, schedule a consultation with Student Loan Professor. We can help you verify the numbers, understand your options, and build a strategy based on what actually applies to you.