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  • Student Loan Forgiveness for Nonprofit Workers

Student Loan Forgiveness for Nonprofit Workers

Several options are available to those working in the nonprofit sector that could help them efficiently navigate their student loan payments while seeking out meaningful careers.

Published September 06, 2023

7 min read

Table of Contents

  • Public Service Loan Forgiveness (PSLF) and nonprofit work
  • Requirements to qualify for Public Service Loan Forgiveness as a nonprofit worker
  • How to apply for Public Service Loan Forgiveness
  • Tips to manage student loan payments before forgiveness
  • Final words: Nonprofit student loan forgiveness
  • Quiz

For those with a passion for helping others, a career in the nonprofit sector is worth pursuing. However, nonprofit work is often associated with low pay, presenting challenges for those with significant student loan debt. Fortunately, several options are available to those working in the nonprofit sector that could help them efficiently navigate their student loan payments while seeking out meaningful careers.

Public Service Loan Forgiveness (PSLF) and nonprofit work

Nonprofit work is intrinsically linked to student loan forgiveness due to a recognition of the vital — yet often underpaid—services that nonprofit workers contribute to society. These workers are considered public servants, as individuals who serve in a government institution or a nonprofit organization that has a 501(c)(3) designation. Public servants can also work for private nonprofit organizations that may not carry this designation but provide certain types of qualifying public services.

One of the key programs aimed at nonprofit workers is the Public Service Loan Forgiveness (PSLF)Program.1 This program can offer eligible borrowers the opportunity for loan forgiveness after 10 years if they have satisfied the requirements of making 120 qualifying payments while working full-time for an eligible employer. Some additional typical areas of employment include public safety, education, public health, or environmental management, among other fields.

This opens a pathway for a vast range of workers to become eligible for student loan forgiveness.

Requirements to qualify for Public Service Loan Forgiveness as a nonprofit worker

Qualifying for the PSLF program involves meeting several requirements. Aside from making 120 qualifying payments, you must be employed full-time by a government or nonprofit organization, have federal Direct Loans (or consolidate other federal student loans into a Direct Loan), and be enrolled in an Income-Driven Repayment plan.

How to choose an Income-Driven Repayment plan

An Income-Driven Repayment (IDR) plan is a type of student loan repayment plan that caps your monthly loan payments at a percentage of your discretionary income. IDR plans are crucial for those seeking loan forgiveness as they can help keep payments manageable while you’re working towards forgiveness. Additionally, enrollment in IDR is a requirement for anyone seeking PSLF.

IDR is a federal program with several different plan types, known as Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE, formerly REPAYE).

Quiz

How much do you know about PSLF?

Start Quiz

True or false?

To qualify for PSLF, you must be employed at a qualifying government or nonprofit organization.

True
To qualify for PSLF, you must be employed at a US government organization at any level (federal, state, local, or tribal) – including U.S. military service, or a qualifying 501(c)(3) nonprofit organization.

False

True or false?

Income-driven repayment (IDR) is not a requirement for PSLF.

True

False
Borrowers must enroll in an income-driven repayment plan to pursue PSLF.

Select all that apply.

Which of the following are types of Income-Driven Repayment plans?

Military service

Law enforcement and first responders

Education

Healthcare

All of the above
All of the above could qualify for PSLF.

Result

Great! You’re on your way.

Now that you understand the requirements of PSLF, our student loan specialists at GradFin can help determine your eligibility and next steps toward forgiveness programs like PSLF.

Get Started Start Over

How to apply for Public Service Loan Forgiveness

Once you have verified your eligibility and qualifying payments, you can apply for PSLF via studentaid.gov. The federal aid website has a PSLF Help Tool specifically for PSLF applicants.

To apply, you submit a form, which the Help Tool will assist you in preparing and signing. It will also allow you to verify your employer’s eligibility and request their certification. Remember to certify your employment every year and any time you change employers. In recent months, there have been changes (and proposed changes) made to the PSLF program to make it easier to qualify for the program. Keep track of government updates via studentaid.gov.

Tips to manage student loan payments before forgiveness

While student loan forgiveness remains the light at the end of the tunnel, it’s essential to effectively manage your loan payments until forgiveness kicks in. First and foremost, making your payments is a key element of qualifying for forgiveness. It’s also important for your financial stability and routine. Aside from keeping on top of your repayment plan and ensuring you can make your loan payments on time, you should also be well-versed on your other repayment options, considering loan consolidation options if necessary, and keeping track of your progress towards forgiveness.

Final words: Nonprofit student loan forgiveness

The road to student loan forgiveness for nonprofit workers may seem complex, but with research and careful navigation, the result — relief from debt while pursuing a fulfilling career in the nonprofit sector — is worth the effort. Remember, the key to reaching this goal lies in understanding the requirements, choosing the right repayment plan, and maintaining consistent, on-time payments. To help sort out the details and ensure you’re on the path to forgiveness, schedule a consultation with our student loan specialists.

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Public Service Loan Forgiveness (PSLF)

Wondering if you qualify for PSLF?

Our student loan experts at GradFin1 have helped borrowers qualify for an average of $98k in student loan forgiveness* and can help you understand how to manage your student loan options, including PSLF. Set up a free 30-minute session with a GradFin specialist.

*Borrowers that met the requirements for PSLF qualified for an average of $98,000 in student loan forgiveness as of 2/27/23

Consider PSLF if you:

  • Work for a government or qualifying not-for-profit organization2
  • Employed full-time
  • Have federal student loans

Schedule Your Consultation

**To see if your employer qualifies, visit studentaid.gov/pslf/employer-search

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    Laurel Road is a brand of KeyBank N.A. All products are offered by KeyBank N.A. Student loans, mortgages, personal loans, and credit cards ARE NOT FDIC INSURED OR GUARANTEED. Member FDIC. NMLS #399797. Equal Housing Lender. ©2023 KeyCorp® All Rights Reserved.

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    Sources:
    https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service
    https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service/public-service-loan-forgiveness-application

    1. GradFin and Laurel Road are brands of KeyBank N.A.

    2. To qualify for PSLF, you must be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service); work full-time for that agency or organization; have Direct Loans (or consolidate other federal student loans into a Direct Loan); repay your loans under an income-driven repayment plan; and make 120 qualifying payments. For full program requirements, visit: Federal Student Aid.

    Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice, legal, financial, or tax advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. Calculators do not include the fees and restrictions that certain products may have. This calculator does not indicate whether you would qualify for a Laurel Road loan. Please visit the applicable banking product pages on laurelroad.com for specific terms and conditions.

    This information provided is for informational purposes only and does not substitute consultation with a legal, tax or investment professional for important financial decisions. Laurel Road assumes no liability for loss or damage incurred by use of the information provided. Please visit laurelroad.com for full product details, terms and conditions.

    1. To qualify for PSLF, you must be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service); work full-time for that agency or organization; have Direct Loans (or consolidate other federal student loans into a Direct Loan); repay your loans under an income-driven repayment plan; and make 120 qualifying payments. For full program requirements visit: Federal Student Aid.