You're eligible to get student loan forgiveness of your federal student loans if you work full-time at a qualified nonprofit organization and make monthly payments under a qualifying repayment plan.
The name of this loan forgiveness program is the Public Service Loan Forgiveness Program (PSLF Program).
(This program is different than the Teacher Loan Forgiveness Program, which only applies to educators working at low-income or secondary schools in Title 1 school districts.)
There's no similar program for private student loans. Private lenders typically don't offer loan forgiveness.
So if you're a nonprofit employee with private student loans, those loans won't be forgiven. But your federal student loans can be forgiven if you meet all the requirements.
FYI: The COVID-19 forbearance under the CARES Act qualifies for the PSLF program. So if your Direct Loans have been in forbearance due to COVID, you should get credit towards loan forgiveness.
Public Service Loan Forgiveness Program (PSLF) requirements
Under the PSLF Program, the U.S. Department of Education promises to forgive the remaining balance of your Direct Loans in exchange for you agreeing to work as a public servant.
FYI: Only Direct Loans qualify for the PSLF program. You can check what type of federal student loans you have by visiting the Federal Student Aid website at studentaid.gov.
The federal government will forgive your remaining Direct Loan debt if you meet the following eligibility requirements:
- work full-time for a qualifying employer (not-for-profit, government organization, or Peace Corps/Americorps)
- have Direct Loans (Direct Plus Loans, Direct Consolidation Loans, etc.)
- make 120 qualifying student loan payments (i.e., the full amount due within 15 days of the due date)
- make the qualifying payments under a qualified repayment plan (e.g., income-driven repayment plans, IBR, REPAYE, PAYE, etc.)
Under the terms of the PSLF program, you work full-time if either:
- your employer considers you to be a full-time employee or
- you work on average more than 30 hours per week
Your nonprofit employer qualifies for student loan forgiveness if it is a tax-exempt 501(c)(3) (a charter school teacher, for example) or a nonprofit that provides a public service like public safety, law enforcement, public health, social worker, etc.
FYI: FedLoan Servicing is the designated servicer for processing PSLF loan cancellation/forgiveness applications. So if you're pursuing PSLF, you'll want to transfer your loans to FedLoan Servicing. You can do that by submitting the PSLF Certification Form directly to them.
Click here to learn more about How to Qualify for Public Service Loan Forgiveness
How can a nonprofit employee get student loans forgiven?
The easiest way for a nonprofit employee to get their student loans forgiven is to first make sure all of their federal student loans are federal Direct Loans.
The PSLF Program only forgives loans made under the Direct Loan Program.
A lot of nonprofit employees contact me after their PSLF application was denied.
When I look into their loans, what I usually find is that they have the wrong type of student loan debt. Sure, they have federal student loans, but their loans weren't made under the Direct Loan Program. Instead, they were made under the Federal Perkins Loan Program or the Federal Family Education Loan Program (FFEL).
To fix the situation, we have to consolidate the loans into the William D. Ford Federal Direct Loan Program. When that happens, all of their loans will now be eligible loans for the program. The only thing that remains is for them to make 120 qualifying PSLF payments while maintaining qualifying employment.
Sadly, there is no retroactive credit for having the wrong loans.
There is, however, retroactive credit if you had the right loans but were in the wrong repayment plan. To qualify for that credit, check out the Temporary Expanded Public Service Loan Forgiveness Program.
How can I apply for the not-for-profit student loan forgiveness program?
You don't need to apply for the PSLF program, at least not at first. Instead, what I recommend you do is submit the Employment Certification Form each year to your student loan servicer.
The Employment Certification Form is a two-page form student loan borrowers use to demonstrate they worked in a public service job for a designated period.
Typically, I have my clients complete this form the same time they complete their recertification for the income-driven repayment plan.
What loan repayment programs qualify for the Public Service Loan Forgiveness (PSLF) Program?
Asa reminder, if you're applying for loan forgiveness, you want to make sure you put your loans into an eligbile loan repayment program.
The only programs that qualify for the PSLF Program are the income-driven repayment plans. Those plans include:
- Revised Pay As You Earn Plan
- Pay As You Earn Plan
- Income-Based Repayment Plan
- Income-Contingent Repayment Plan
To confirm what student loan repayment plan you're in, contact FedLoan Servicing (or whoever your servicer is). The representative will tell you exactly what plan you're in.