PSLF Program: A Powerful Nonprofit Recruiting Tool
Did you know that some of your nonprofit organization’s employees might be eligible for forgiveness of the outstanding balance on their federal student loans?
Under the Public Service Loan Forgiveness (PSLF) program, which was created in 2007 under the College Cost Reduction and Access Act, borrowers who work full-time for qualifying nonprofit organizations and government agencies can have their outstanding student loan debt forgiven if they meet certain criteria.
The PSLF was created by Congress as an incentive to encourage college graduates to work in the nonprofit and government sectors, which typically pay less than the private sector. To qualify, employees must have worked full-time (at least 30 hours per week) for a least 10 years and made 120 monthly loan payments under a qualifying repayment plan. Any remaining balance on the employee’s Federal Direct Student Loan may then be eligible for forgiveness, assuming the loan isn’t in default.
Qualifying organizations include tax-exempt charitable 501(c)(3) organizations; federal, state, local and tribal government agencies; and the AmeriCorps and Peace Corps (for full-time members).
New regulations that went into effect in 2023 have made the PSLF even more attractive. These rules count additional previous payments toward loan forgiveness, expand which types of loan payments quality for forgiveness and ease administration by allowing digital signatures by employers and employees.
Approximately 34 million Americans carry student loan debt, which makes PSLF a powerful recruiting and retention tool for nonprofit organizations — especially given the nonprofit workforce shortage. But many current and prospective employees are unaware of the program. Therefore, you should note your standing as a Public Service Loan Forgiveness certified employer in your job postings and promote PSLF among your staff.
Federal Student Aid has published a PSLF Help Tool.
