What If My Pslf Application Is Denied
If your PSLF application is turned down, its not the end of the world. You might still be eligible for a Temporary Expanded PSLF. If you are denied there, you will have to continue making payments according to the original terms of your Master Promissory Note.
At that point, you might want to consider student loan refinancing if it means youll get a better interest rate or monthly payment that works better for you.
How To Get Started With Teacher Loan Forgiveness
Verify that your place of employment qualifies for this nonprofit student loan forgiveness program. You can confirm whether youre employed by an eligible school by searching the Teacher Cancellation Low Income directory for your school or organization.
After working for five years toward this forgiveness program, you can submit the Teacher Loan Forgiveness Application to your student loan servicer.
How To Get Started With Perkins Loan Teacher Cancellation
To get the full amount of nonprofit student loan forgiveness, you need to serve for five years in public child education. Each year earns you a portion of student loan debt forgiveness.
- Years 1 and 2: 15% of loans are forgiven.
- Years 3 and 4: 20% of loans are forgiven.
- Year 5: 30% of loans are forgiven.
You must apply to have your loans forgiven through the schools loan servicer or with the school that disbursed your loans. You can get the appropriate paperwork through your school and submit the forms back to the school for student loan forgiveness.
Are There Threats On The Horizon To The Public Service Loan Forgiveness Program
Yes, from time-to-time there have been efforts by various Members of Congress to shut down the program. This is most likely through the congressional appropriations process, where funds for the program could be cut off or zeroed out. However, given the strong support of the Biden Administration, as well as the ability of the Administration to veto any effort to reduce student loan forgiveness funds , the program seems to be secure until at least the end of the current Administrations term in January 2025.
Understanding The Pslf Limited Waiver Opportunity
While student loan borrowers typically need to pay back their loans on an income-driven plan to qualify for PSLF, a recent piece of legislation has temporarily waived this requirement.
With the new Limited Waiver Opportunity, you could have any of your student loan payments count toward PSLF, even if you were on a typically non-qualifying plan. Whats more, the period of suspended payments during the emergency forbearance will also count toward PSLF.
To take advantage of this Limited Waiver Opportunity, you must submit an Employer Certification form before Oct. 31, 2022. If you owe any loans that are not from the Direct loan program, such as FFEL loans, then you also must consolidate them with a Direct consolidation loan before that date.
Unfortunately, parent loans are not eligible for this waiver. If you have any other type of loan, however, its worth taking advantage of this opportunity, as it could move you months or even years closer to receiving loan forgiveness through PSLF.
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Revised Pay As You Earn Repayment Plan
You must be a Direct Loan borrower with more than $30K in student loan debt for this plan. Your monthly payments are 10% of your discretionary income. Your monthly payments increase each year, too.
Once youve paid into the program for 20 25 years, your balance is forgiven. The forgiven balance counts as taxable income. Its important to note that, you could end up paying more than you would if you participated in the Standard Repayment Program.
Nonprofits Must Step Up Now: How To Help Employees Access Public Service Loan Forgiveness
Are you the executive director of a nonprofit organization? A human resources employee, board member, senior manager, frontline worker, or intern at a nonprofit or government entity?
Through October 31, 2022, you have an exciting opportunity to promote a government program that could provide substantial financial benefit to employees of your organization who have federal student loans, at no cost to you or your organization.
This little-known program, Public Service Loan Forgiveness , was created by Congress in 2007 to promote public service in the government and nonprofit sectors by reducing indebtedness and the costs of higher education for borrowers. The program is open to government workers at all levels military members and employees of 501 nonprofit organizations. Public service work is a big part of the economy: roughly one in four US workers are employed by a government agency, a nonprofit, or the military.
For those who qualify, PSLF can completely wipe out the balance of a borrowers federal student loans after 10 years of qualifying monthly payments .
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Maine Loan Forgiveness Programs
Residents in Maine can benefit from the Educators for Maine program, which makes you eligible to have one year of your loan forgiven for every year of return service as a full-time teacher employed by a Maine public school. This isnt strictly for non-profit workers, though, because employees at Maine private schools approved for tuition purposes also qualify. In addition, two years worth of your loan may be forgiven for each year that you are a full-time teacher in an eligible Maine school working in an underserved subject area.
- You must be certified by the Maine Department of Education
- You must be employed at a Maine public elementary or secondary school, a Maine private elementary or secondary school that has been approved for tuition purposes, or a state-operated school
- You must be employed as a Jobs for Maines Graduates specialist with appropriate teacher certification
- You must be employed as an elementary or secondary teacher, specialized subject teacher, vocational or industrial arts teacher
Child Care Providers Must Have a Degree or Certificate in:
- Child development, early childhood education, early childhood development, health and human services, with a focus on early childhood, special education from birth to five years or other similar programs, as determined by FAME
- You must be employed at a child care facility
- You can find more program information here.
What Loans Qualify For Non Profit Forgiveness
ONLY Federal Direct Loans qualify for the Public Service Loan Forgiveness Program, so youll have to have one of the following types of loans:
- Federal Direct Grad PLUS Loans
- Federal Direct Parent PLUS Loans
- Direct Consolidation Loans
If you have any other type of loan, including loans offered under the Federal Family Education Loan Program , or Private Student Loans, then you will not be able to use PSLF to get rid of your loans for Non Profit work.
NOTE: If youre able to Consolidate Your Federal Student Loans into a Direct Consolidation Loan, then that new Direct Consolidation Loan would be eligible for PSLF, so you may want to try that route.
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Other Ways To Get Loan Forgiveness If You Work For A Nonprofit
While PSLF is perhaps the most well-known path to loan forgiveness, its not your only option if you work in public service. There are also a few other, job-specific programs that could forgive your loans, including,
- Teacher Loan Forgiveness, which offers up to $17,500 in loan cancellation to teachers who work for five consecutive years in low-income settings and teach certain subjects.
- National Health Service Corps, which provides up to $50,000 in loan assistance for healthcare professionals who work for two years at an eligible site.
- NURSE Corps Loan Repayment program, which will pay off up to 60% of your student loans after you work for two years in an underserved community, as well as an additional 25% of your balance for a third year of service.
Its worth exploring all your options for loan forgiveness, especially if you work in the public sector. Some of these programs offer loan cancellation a lot sooner than PSLF.
Your Nonprofit Employer Doesnt Qualify For Pslf You Have Other Options
Youâre not alone if you learn your employer doesnât meet PSLFâs strict requirements. There are other options.
- Check out other forgiveness opportunities. PSLF is just one of the student loan forgiveness programs the federal government offers borrowers. Youâre also eligible for IDR forgiveness and the IDR Waiver. And if you teach at a secondary school or educational service agency, you may qualify for the Teacher Loan Forgiveness Program.
- Stay in an income-driven repayment plan. IBR, ICR, PAYE, and REPAYE will forgive your remaining balance after 20 or 25 years, depending on the plan and if you borrowed federal loans for graduate school. Right now, the forgiven loan balance is tax-exempt. But that may change in 2026.
- Check out refinance opportunities. If you have a good credit score and enough income to cover your credit card bills and other expenses, student loan refinancing can save you money and help you get out of debt faster by lowering your interest rate. Before you refinance federal loans, know that theyâll no longer be eligible for federal benefits like loan forgiveness and income-based repayment options.
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Who Is Eligible For Student Loan Forgiveness
Each program has specific criteria that you must meet to determine your eligibility.
You may be eligible for student loan forgiveness if you have:
- Worked in public service for 10 years: If you have worked in public service for 10 years you might be able to enroll in the public service student loan forgiveness program retroactively through the PSLF program overhaul. To be enrolled in a PSLF program, you have to be employed full-time with an eligible employer.
- Direct Loans: You have a Direct Loan, are enrolled in a qualified repayment program while working for an eligible employer and have made 120 monthly payments.
- Enrolled in a student loan forgiveness program: You are enrolled in another type of student loan repayment program such as Pay As You Earn , Revised Pay As You Earn , Income-Based Repayment or Income-Contingent Repayment plans and have met the eligibility criteria for each program.
Apply to the student loan forgiveness program you qualify for, and once youre enrolled, your application needs to be updated annually. Most student loan forgiveness programs require 10 25 years of participation before you can request your loan forgiveness. Its best to enroll in a forgiveness program as soon as you are ready.
MoneyHackAutopay Student Loans
Contact your loan service providers to see if they offer a small percentage discount when you autopay your student loans from your checking or savings account.
Nonprofit And Public Sector Employees With Student Loan Debt May Temporarily Qualify For Forgiveness Act Now Category
As of June 2022, a total of 2,090 Iowans have had $106.8 million in student loan debt forgiven at an average of $51,100 per borrower through the Public Service Loan Forgiveness Program. Temporary changes to the program could mean that you or someone you know may now qualify to have thousands of dollars in student loan debt forgiven.
I initially didnt qualify for the PSLF due to my student loan type, said one Iowa borrower, but now I am going through the process of having my remaining student loan debt forgiven within the next few months.
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How To Apply For Pslf
New grads working in the nonprofit sector can take the following steps to apply for the PSLF program:
Submitting your Employment Certification form is especially crucial, as your loan servicer will let you know whether or not your employment qualifies for the program. If it doesnt, its better to find that out sooner rather than later, so you can look for other options.
If your employment qualifies you for loan forgiveness and you fulfill all the conditions, you can get your remaining student loans forgiven. The best part? Under this program, your loans are not considered taxable income, so you wont be hit with a hefty tax bill.
Get Started With 501 Student Loan Forgiveness
Doing your research to see which program youd get the most value from, based on your eligibility, can help you chip away your student loan debt. Rewarding work doesnt have to be such a burden with student loans if you can pursue these programs. Unfortunately, many of these options come from the federal government and education department, which means private student loans dont qualify.
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Do You Need Your Help
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So please spread the word, tell someone else to visit this article or reach out to us. So they too can have a better understanding on student loan forgiveness for nonprofit
What Payments Qualify For Non Profit Forgiveness
ONLY payments made under one of the Federal Income-Driven Student Loan Repayment Plans count for the Public Service Loan Forgiveness Program, so you need to make sure that youre enrolled in one of the following repayment plans:
Qualifying Repayment Plans
- The Pay As You Earn Plan
- The Revised Pay As You Earn Plan
- The Income-Based Repayment Plan
- The Income-Contingent Repayment Plan
Remember, ONLY those payments made while youre enrolled in one of these programs are going to count toward the 120 payment threshold .
There is one temporary one saving grace in that the Federal Government passed a new rule called Temporary Expanded PSLF which allows you to qualify for forgiveness if you satisfy ALL THE OTHER REQUIREMENTS of PSLF, but were simply enrolled in a non-qualifying repayment plan.
For details on how this works, please visit my Guide to the Temporary Expanded Public Service Loan Forgiveness Program.
Finally, there are four other important rules about qualifying payments, which are:
Qualifying Payments Must Have Been
- Made After October 1st, 2017
These additional stipulations mean that the only payments which count toward the 120 threshold will be those made after October 1st, 2007, per the schedule of your IDR Repayment Plan , in full and on time .
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Get Help With Student Loan Debt
The scrutiny and criticism of the PSLF program has made it somewhat easier to qualify, but applicants still face major headaches and hurdles. Given the rejection percentage, it would be wise to develop a Plan B.
Among the alternatives are an income-based repayment plan or a debt consolidation loan from a nonprofit. Such a program includes and financial experts who work with all your lenders to find lower interest rates. All your loans are then rolled into one monthly payment that is lower than the total of all the separate bills you were previously on the hook for.
Contact a nonprofit credit counseling agency like InCharge Debt Solutions for help with student loan debt.
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Pros And Cons Of Pslf
Some of the basic pros and cons of going for PSLF are fairly straightforward.
If you took on tens of thousands of dollars in federal student loans, the prospect of losing at least a portion of that debt is likely huge.
And, as a bonus, the IRS isnt going to ask you to pay federal income taxes on the loan amount forgiven under the PSLF program. The big drawback, of course, is the time and effort required for the chance to get a PSLF application approved.
And if, after all that, you dont receive forgivenessbecause the government changes the rules, because you decided to go another direction with your career, et ceterayou may have missed out on other opportunities to pay down your debt.
If you took on tens of thousands of dollars in federal student loans, the prospect of losing at least a portion of that debt is likely huge.
Federal student loans come with lots of benefits and protections, but with an income-driven repayment plan, youll be looking at a 20- to 25-year loan term .
With income-driven repayment, your payments are lower, its usually because the loan term is longer, not because your interest rate has improved. Your interest rate will stay the same under this plan.
Applying for Public Service Loan Forgiveness could be worth the challenge, if youre pretty sure youve got what it takesboth in mental fortitude and when it comes to fulfilling the requirements. But it isnt the only option for getting student debt under control.
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Nonprofit Employees With Student Loan Debt:
Make sure you have the correct loan type and then are on track for eligibility by submitting the Employment Certification for Public Service Loan Forgiveness form . Submit this form periodically during employment. Learn more with the PSLF Help Tool, available at www.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/
- Time to Celebrate and Act: The Amazing Student Loan Forgiveness Program We Have Right Now, Rich Leimsider, National Council of Nonprofits blog, Aug. 17, 2022.