Non-Profit Employee Student Loan ForgivenessJuly 16, 2021
Nonprofit organizations do important and meaningful work, but they don’t always provide high salaries for their staff members. If you want to work for a nonprofit and are concerned about how you will pay your student loans, the good news is there are plenty of options for nonprofit organization student loan forgiveness for workers.
Some loan forgiveness options are available only to people who work in specific fields, such as the healthcare field or teaching. But other nonprofit student loan forgiveness programs are open to anyone who works for a qualifying 501(c)(3) organization. It’s important to explore all of your options to choose the forgiveness program that’s best for you.
Here are three different types of nonprofit employee student loan forgiveness programs that you might be able to take advantage of:
1. Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is the most widely available nonprofit student loan forgiveness option. Unlike other programs, you don’t need to work in a specific nonprofit job to become eligible for it. However, you do need to meet specific criteria, including the following:
- Working for a nonprofit or government organization
- Working full-time, which means meeting your employer’s definition of full time or working at least 30 hours per week for any combination of eligible employers
- Having eligible loans, including Direct Loans or a Direct Consolidation Loan
- Making payments under a qualifying income-driven repayment plan
If you meet these requirements, you must make 120 qualifying payments on your income-driven plan. After you’ve done that, you can have the remaining balance of your loans forgiven.
You should submit an annual Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF Form) at least once per year or whenever you change employers to be sure that you are on track for forgiveness.
Unfortunately, Public Service Loan Forgiveness is not available for private student loans. You will need to explore other nonprofit employee student loan forgiveness options if you have private loan debt.
2. Loan forgiveness for health care workers
If you work as a health care provider for a qualifying organization, you can also become eligible for assistance repaying your loans through the National Health Service Corps state loan repayment assistance program.
To be eligible for nonprofit employee student loan forgiveness from this program, you must:
- Work in a Health Professionals Shortage Area at either a public or nonprofit facility
- Make a two-year work commitment
- Work in the field of mental health; dental health; or primary care
- Be an eligible medical professional including an MD; DO; dentist or registered dental hygienist; nurse practitioner or registered nurse; certified-nurse midwife; physician assistant; licensed clinical social worker; psychiatric nurse specialist; health service psychologist or licensed professional counselor; marriage or family therapist; pharmacist; or substance use disorder counselor
This program doesn’t exactly provide nonprofit student loan forgiveness since your loan balance isn’t being forgiven. Instead, it offers up to $50,000 in student loan repayment assistance if you commit to a two-year term working full-time or up to $25,000 if you commit to a two-year term working part-time.
You can apply for a continuation of the service contract after your initial two-year period and obtain additional loan repayment funds. However, there is no guarantee you will be able to renew your contract.
Repayment funds can be used to pay off federal or private student loans that were obtained to pay undergraduate or graduate tuition, educational expenses, or reasonable living expenses.
3. Loan forgiveness for teachers
There are also options for nonprofit organization student loan forgiveness for teachers, as well. These include both Teacher Loan Forgiveness and Perkins Loan cancellation for teachers.
To qualify for Teacher Loan Forgiveness, you must:
- Be employed as a highly qualified teacher. That means you have at least a bachelor’s degree, be fully state-certified, and not have any licensure requirements waived. New teachers must also demonstrate subject knowledge and teaching skills by passing a state test focused on either core elementary schools for elementary teachers; or, for middle or secondary school teachers, by either earning a graduate degree or advanced certification in the academic subjects you teach or completing a state test.
- Teach in a low-income elementary or secondary school or work for an educational services agency that serves low-income students.
- Teach full-time for five complete, consecutive academic years, at least one of which is after the 1997 to 1998 academic year.
- Have Direct Subsidized or Direct Unsubsidized Loans or Subsidized or Unsubsidized Federal Stafford Loans (a portion of a Direct Consolidation Loan is also forgivable based on the percentage that repaid eligible Direct or Stafford Loans).
- Have obtained your loans before the end of your five years of qualifying teaching service.
Qualifying teachers may have up to $17,500 of their eligible loans forgiven through this nonprofit employee student loan forgiveness program. However, private loans are not forgivable.
Teachers may also be eligible for Perkins Loan Cancellation if they teach in special education, math, science, foreign languages, bilingual education, or a subject matter with a shortage of teachers. They must also work in a nonprofit school or early childhood education service teaching low-income families. The amount of Perkins Loans that will be canceled depends on your term of service:
- 15% of loans are forgiven in years one and two
- 20% of loans are forgiven in years three and four
- 30% of loans are forgiven in year five
This means teachers who make a five-year service commitment can have the full balance of their Perkins Loans forgiven.
Explore other loan forgiveness options
Several of these programs apply only to people in a specific field. And there may be other options for nonprofit employee student loan forgiveness depending on where you live and work. You can check with your state’s Department of Education to explore programs that may be available to you.
Many loan forgiveness programs focus on federal student loans. If you need help with private loans, there are fewer options for discharging them. However, student loan refinancing could help you reduce your interest rate and make repayment more affordable.