There are various programs that can offer nonprofit student loan forgiveness to individuals who work for a 501(c)(3) or other nonprofit organization.
By participating in these programs, eligible borrowers can have their student loans forgiven or significantly reduced after meeting certain requirements. However, it is always the borrower’s responsibility to ensure that they find, apply, and maintain their eligibility for these programs.
Here’s what you need to know about the different ways to get nonprofit student loan forgiveness.
Public Service Loan Forgiveness (PSLF) Program
The Public Service Loan Forgiveness (PSLF) program is the leading loan forgiveness option for nonprofit employees. Established by the U.S. Department of Education, the PSLF program provides direct access to the remainder of his loan after making 120 eligible monthly payments under an eligible repayment plan while working full-time for an eligible employer. Waive the balance.
PSLF eligibility requirements
To qualify for the PSLF, you must meet four main criteria to qualify.
Direct Financing: Only direct federal loans are eligible for the PSLF. If you have other federal loans, you can consolidate them directly into the Consolidated Loan to qualify.
Repayment plan: You must be enrolled in an Income-Based Repayment (IDR) plan. With this plan, your monthly payment is based on your income and family size.
Full-time employment: Must work full time for a qualified employer. Full-time is defined as meeting the employer’s definition of full-time or he works at least 30 hours a week, whichever is greater.
120 eligible payments: You must make 120 qualifying monthly payments under your IDR plan while employed full-time with an eligible employer. Payment must be made in full and on time.
Eligible Employer
Employers covered by the PSLF are:
- Government Agencies (Federal, State, Local, Tribal)
- Tax-exempt non-profit organizations under Section 501(c)(3) of the Internal Revenue Code
- Other non-profit organizations that provide qualified public services
See the full list of PSLF eligible jobs.
How to apply for PSLF
If you are interested in applying for the PSLF, please follow these steps:
Complete the Employment Verification Form (ECF). Submit your ECF each year or whenever you change employers to ensure you are on track for the PSLF. You can use. PSLF help tool You can also do this electronically and ask your employer to electronically sign it for you.
Track your progress: Once you submit your first ECF, monitor your eligible payments and employment status through the portal of the loan servicer that will eventually become MOHELA.
Apply for the PSLF: After making 120 eligible payments, submit a PSLF application to request a waiver. Continue making payments until your application is approved.
Income-Based Repayment (IDR) Plan
Enrollment in an IDR plan is essential to qualify for the PSLF, but all IDR plans also include student loan forgiveness.
There are four IDR plans available.
1. Income Based Repayment (IBR): Your monthly payments are set at 10-15% of your disposable income, depending on when you first received your loan.
2. Income Conditional Repayment (ICR): Your monthly payment is 20% of your discretionary income or the amount you would pay in a 12-year fixed repayment plan, adjusted for income, whichever is less.
3. Pay what you earn (PAYE): Monthly payments are set at 10% of your discretionary income, the amount of a standard repayment plan for up to 10 years.
4. Revisions to Pay As You Earn (REPAYE): Monthly payments are set at 10% of your discretionary income, with no maximum payout.
All IDR plans forgive student loans after 20 or 25 years, depending on when the loan was initiated. This is a useful backup plan if the PSLF doesn’t work out or you leave public service before reaching 120 payments.
Additional Nonprofit Loan Forgiveness Options
Besides the PSLF, there are other non-profit loan forgiveness options to consider.
Teacher Loan Waivers: Teachers working in low-income schools or educational services are eligible for loan forgiveness of up to $17,500. Learn more about the Loan Forgiveness Program for Teachers here.
Nursing Corps Loan Repayment Program: Registered nurses, nurse practitioners, and nurse teachers can receive loan repayment assistance in exchange for working in underserved areas.
National Health Service Corps (NHSC) Loan Repayment Program: Qualified field health professionals can receive loan repayment assistance in exchange for serving in a Health Professional Shortage Area (HPSA).
See our complete guide to student loans by state to see what options are available in your area.
Maximize your chances of loan forgiveness
Follow these tips to get the most out of your nonprofit student loan forgiveness program.
Get information: Stay up to date on student loan forgiveness program and policy changes. This is especially important given her PSLF and IDR waivers that currently exist.
Keep Accurate Records: Maintain complete documentation of your employment, loan payments, and correspondence with loan servicers. If you mail the form to the loan servicer, always keep the original.
Consider consolidating: If you have ineligible federal loans, you can consolidate them directly into a consolidated loan to qualify for the PSLF.
Seek professional guidance: Talk to a student loan expert or financial advisor to make sure you’re on the right track to maximize your loan forgiveness. You can use services like the Student Loan Planner to navigate your options.
final thoughts
Nonprofit student loan forgiveness programs such as the PSLF offer significant financial relief to those working in the nonprofit sector.
By understanding the eligibility requirements, enrolling in the appropriate repayment plan, and carefully tracking progress, you can successfully navigate your way to loan forgiveness and reduce your student’s debt burden.