Nonprofit Employee Student Loan ForgivenessJanuary 27, 2023
Non-profit organizations employ the third-largest workforce of any industry, outpacing manufacturing, construction, and finance.
If you are one of the millions of people in the workforce employed by a non-profit organization, you know the work can be rewarding, but the salaries are often less than you could get in the private sector. If you have outstanding student loan debt, working for a non-profit can make it difficult to afford your payments.
Luckily, there are programs that provide student loan forgiveness for working at a non-profit. Depending on your loan type and your employment, you could qualify for partial or even total student loan forgiveness. These are the leading programs that offer student loan forgiveness for non-profit jobs:
1. Public Service Loan Forgiveness (PSLF)
PSLF is a federal program for borrowers with federal student loans. With this program, you can qualify for loan forgiveness if you work for a non-profit organization full-time for at least 10 years and make 120 qualifying monthly payments. Through PSLF, you can get a substantial amount of your debt forgiven; PSLF will eliminate 100% of your remaining federal student loan debt after you meet the program’s requirements.
PSLF Eligibility Criteria
PSLF is a valuable program, buts its eligibility requirements are rigorous:
- You must have direct federal student loans
- You must be enrolled in a qualifying repayment plan
- Income-driven repayment plans are qualifying payments
- You must work for a qualifying non-profit organization that is a 501(c)(3) or government agency full-time for at least ten years while your loans are in repayment.
- You must make 120 monthly payments under a qualifying payment plan.
Important: The government temporarily expanded PSLF’s requirements to allow more borrowers — such as those who made payments under non-qualifying plans — to obtain loan forgiveness, but the expanded program ended in 2022.
How to apply for PSLF
If you plan on pursuing PSLF, you must notify your loan servicer. The loan servicer will transfer you to a new servicer that handles PSLF applicants.
To apply for PSLF, follow these steps:
- Check to make sure that your loans are eligible for PSLF.
- Certify your employment every year.
- Make the required 120 monthly payments.
- Generate and sign the PSLF application form once you’ve completed the necessary 10-year service term and 120 monthly payments.
You can use the PSLF Help Tool to find out if your employment qualifies for PSLF and Temporary Expanded PSLF and generate the necessary forms to apply for loan forgiveness.
2. Loan forgiveness for healthcare workers
Healthcare workers in some states may be eligible for the National Health Service Corps (NHSC) State Loan Repayment Program (SLRP).
The program provides grant funding to states and territories to operate their own loan repayment assistance programs so they can recruit healthcare workers to serve in high-need areas.
The total amount of loan forgiveness can vary by state, but some will forgive up to 100% of your total outstanding student loan debt.
State Loan Repayment Program (SLRP) eligibility criteria
Although eligibility requirements vary by state, you generally have to meet the following criteria:
- You must be a U.S. citizen or naturalized citizen
- You must have a current, full professional license, certificate, or registration in the state where you work.
- You must work at an approved site in a designated healthcare professional shortage area (HPSA) while providing direct patient care for a specific period, such as two to four years.
- You must agree to only use program funds to repay qualifying student loans.
- You must provide primary health services in an eligible discipline, such as:
- Allopathic Medicine (MD)
- Certified Nurse Midwife (CNM)
- Osteopathic Medicine (DO)
- General and Pediatric Dentistry (DDS/DMD)
- Health Services Psychologist (HSP)
- Licensed Clinical Social Worker (LCSW)
- Licensed Professional Counselor (LPC)
- Marriage and Family Therapist (MFT)
- Pharmacist (Pharm)
- Physician Assistant (PA)
- Psychiatric Nurse Specialist (PNS)
- Registered Dental Hygienist (RDH)
- Registered Nurse (RN)
- Substance Use Disorders Counselor
How to apply for SLRP
Application requirements vary based on the state operating the loan forgiveness program. Contact your state’s program office for details about the application process.
3. Loan forgiveness for teachers
If you are a teacher, you may be eligible for partial loan forgiveness through the federal Teacher Loan Forgiveness or Perkins Loan Teacher Cancellation programs.
- Teacher Loan Forgiveness: Eligible teachers can qualify for up to $17,500 in loan forgiveness if they work full-time for five full complete, and consecutive academic years at a qualifying school.
- Perkins Loan Teacher Cancellation: If you have outstanding federal Perkins loans, you may have a portion of your loans forgiven for each year that you teach at a qualifying school. The program can forgive up to 100% of your debt:
- 15% canceled per year for the first and second years of service
- 20% canceled for the third and fourth years
- 30% canceled for the fifth year
Teacher Loan Forgiveness eligibility criteria
To qualify, you must meet the following requirements:
- You must teach full-time for five full, consecutive academic years.
- You must work for a low-income school elementary school, secondary school, or educational service agency.
- You must have federal Direct Subsidized or Unsubsidized Loans
To qualify for the maximum amount of loan forgiveness, you must be a highly-qualified teacher in high-need areas, such as science or special education. Otherwise, you may be limited to $5,000 of loan forgiveness.
How to apply for Teacher Loan Forgiveness
After you’ve completed the required five years of service, fill out and submit a Teacher Loan Forgiveness Application to your loan servicer. Your employer must complete the application’s certification section. If you have multiple loan servicers, you must complete a separate application for each one.
Perkins Loan Teacher Cancellation eligibility criteria
Although the Perkins Loan program is no longer active, borrowers with outstanding Perkins Loans can still take advantage of the Perkins Loan Teacher Cancellation program if they meet the following requirements:
- You must work full-time in a public or non-profit elementary or secondary school.
- You teach in a school that serves low-income families, provides special education, or teach in the fields of mathematics, science, foreign languages, or bilingual education.
How to apply for Perkins Loan Teacher Cancellation
Perkins Loans were handled by schools, so applicants for Perkins Loan Teacher Cancellation must contact the school loan administrator or the loan servicer for application details.
Explore other loan forgiveness options
You may qualify for student loan forgiveness for working at a non-profit organization, but not everyone will be eligible for the above programs. However, you may be eligible for other loan repayment programs through your state; contact your state education agency to see what loan assistance programs are available.
As you saw in the information listed above, most loan forgiveness programs are limited to borrowers with federal student loans. If you have private student loans and are having trouble managing your debt, you may not be eligible for loan forgiveness. However, student loan refinancing is one way to potentially lower your interest rate, reduce your monthly payments, and save money over the life of your loan.