If you are employed by a nonprofit or government and are one of the34 million borrowers who have federal student loan debt, you may be eligible for loan forgiveness, cancellation, and/or consolidation under thePublic Service Loan Forgiveness program(PSLF). Created under theCollege Cost Reduction and Access Act of 2007, PSLF allows borrowers who work full time for nonprofits and government agencies to have their outstanding debt forgiven tax-free on Federal Direct Loans, after making 120 qualifying monthly payments under aqualifying repayment plan.
How to Certify Your Employment
Borrowers can use thePSLF Help Toolto fill out their form and havetheir employers, including 501(c)(3) charitable nonprofits,digitally sign and certify eligible employment, andelectronically submit the form to their PSLF servicer for processing.
The process for certification is simple, but it is best to start now. Our short video explains the steps:
Why It Matters
The program helps attract talent to work at 501(c)(3) charitable nonprofits, encourages and incentivizes employees to remain in the sector, and provides relief for public service professionals who are often paid less than other employment opportunities.
Nonprofit employees are encouraged to use thePSLF Help Toolandsubmit employer certification formsimmediately.
Requirements include:
- Qualifying Loans: Loan must be through the FederalDirect Student loan program, specifically the “William D. Ford Federal Direct Loan (Direct Loan) Program". Additional types of loans like Perkins, FFEL, andconsolidated loans qualify under new regulations that took effect July 1, 2023. Borrowers should inquire with their loan servicer or the Department of Education.
- Qualifying Payments: After120 qualifying payments(this usually takes 10 years) in certain repayment plans,employees in certain public service jobs, including at 501(c)(3) charitable nonprofits, may be eligible for loan forgiveness as long as their loans are not in default, and their loans are under a qualifying repayment plan.
- Qualifying Employmentincludes:
- Employment with a charitable nonprofit tax-exempt organization under 501(c)(3)
- Employment with a government agency (federal, state, local or tribal)
- Full time AmeriCorps or Peace Corps members
Where We Stand
As proven job creators, nonprofits can and should participate in the development of job growth policies at the federal, state, and local levels. The National Council of Nonprofits strongly endorses policies that promote job creation in all sectors of the economy, especially policies that promote and incentivize employment at charitable nonprofits.
-Public Policy Agenda
Status
In April 2024, The U.S. Department of Education announced adebt cancellation planto cancel some accrued interest, automatically forgive certain qualifying borrowers in certain payment plans includingPublic Service Loan Forgiveness(PSLF) and otherincome-driven repayment plans like SAVE(Saving on a Valuable Education plan) without requiring paperwork, potentially lower monthly payments for certain borrowers as well as cancelling some debt due to unpaid interest and loans older than 20 years or more.
In July 2024, a federal court stopped the Department from operating the SAVE plan. Borrowers in the SAVE plan will be placed in an interest-free forbearance period during the litigation. The time in forbearance will not count toward PSLF. Borrowers may switch to a different qualifying payment plan or potentially “buy back” the period of forbearance to meet PSLF requirements.
See NCN's Comments to the Department of Education andBiden-Harris Administration Releases First Set of Draft Rules to Provide Debt Relief to Millions of Borrowers.
Background
Regulations by the Department of Educations, effective July 1, 2023, expand eligible borrowers for forgiveness under PSLF.Key provisions allow more kinds of payments (certain types of deferment andforbearance as well aslump sumand late payments) to count as qualifying payments, clarify the definitions of full-time employment and qualifying employer, and codify the reconsideration process. Other beneficial provisions would provide a hold-harmless option for deferment or forbearance, automate progress toward forgiveness, and eliminate prospective interest capitalization not required by statute.
See ourComments to the Department of EducationandChart on the Department of Education Final Regulations for PSLFfor more information.
The Administration also announced that thecount adjustment is expected to be fully implementedin September 2024, which will allow borrowers to “see a full and accurate count of their progress toward loan forgiveness.” Borrowers can receive credit toward PSLF for any month covered by the payment count if they meet employment requirements. Learn more abouthow and why consolidation helps PSLF borrowersandhow to maximize benefitsunder the program.
Take Action
Nonprofit Employees With Student Loan Debt:
Make sure you have thecorrect loan typeand then are on track for eligibility by submitting theEmployment Certification for Public Service Loan Forgiveness form(Employment Certification form). Submit this form periodically during employment. Learn morewith the PSLF Help Tool, available atwww.StudentAid.gov/PSLF.
Additional resources are available at:
- The Institute of Student Loan Advisors Corporation-www.freestudentloanadvice.org/
- Student Borrower Protection Center-www.protectborrowers.org/
Nonprofit Employers:
Spread the word!Many nonprofit employees aren’t aware that they may qualify for student loan forgiveness. Share this webpage with your employees!
More About PSLF
- Everything Nonprofit Employees Need to Know About Public Service Loan Forgiveness(1:00:35) (slides) with the National Council of Nonprofits,Department of Education,The Institute of Student Loan Advisors(TISLA)
Additional Resources
The Public Service Loan Forgiveness program still solidly in place – and more valuable than ever to nonprofits and their employees, Tiffany Gourley Carter and Amy Silver O'Leary, National Council of Nonprofits, July 19, 2023.
- Preserving, Improving, and Promoting the Public Service Loan Forgiveness Program -- For the Public Good,National Council of Nonprofits, July 10, 2023.
- Public Service Loan Forgiveness Untouched by Supreme Court Student Debt Rulings, National Council of Nonprofits, June30, 2022.
- Department of Education Final Regulations for PSLF, National Council of Nonprofits, updated Nov. 9, 2022.
- Comments to the Department of Education - Notice of Proposed Rulemaking, National Council of Nonprofits, Aug. 8, 2022.
Additional Resources
- Public Service Loan Forgiveness (PSLF), Federal Student Aid
- Coronavirus and Forbearance Info for Students, Borrowers, and Parents, FedLoan Servicing
- Preserve PSLF, The Coalition to Preserve PSLF
