Student Loan Forgiveness For Nonprofits

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If you are an employee of a government or non-profit organization and have student loan debt, you may be eligible for federal student loan forgiveness, cancellation and / or consolidation under the Public Service Loan Forgiveness (PSLF) program. ). Created under the College Cost Reduction and Access Act of 2007, the PSLF allows borrowers who work full time for nonprofits and government agencies to get their outstanding debt forgiven tax-free on federal Direct Loan loans. Program, after making 120 qualifying monthly payments under a qualifying repayment plan. Borrowers could apply for forgiveness under the PSLF beginning in October 2017.

More than 42 million people nationwide have education loans totaling more than $ 1.3 trillion in student debt. Full-time employees of 501 (c) (3) nonprofit organizations, government employees, AmeriCorps and Peace Corp workers, and some employees of other public service organizations with certain types of student loans may receive loan forgiveness. outstanding debt after working full time and making payments for ten years. The program helps attract talent to the industry, encourages and incentivizes employees to stay in the industry, and provides relief to public service professionals who are often paid less than other job opportunities.

Borrowers must certify that public service employment qualifies under the program, but they do not need to do so before applying for forgiveness at the end of the 10-year period. Of the borrowers who have submitted and approved employment certification forms to date, nearly two in five (38 percent) work in 501 (c) (3) nonprofit organizations. The remaining 62 percent work in the government. Less than 1 percent work in other qualified organizations.

Federal legislation to reauthorize the Higher Education Act, titled Promoting the Success and Prosperity of Real Opportunities through Education Reform (PROSPER) Act (HR 4508) would eliminate the PSLF for future borrowers. If passed, the legislation would not affect nonprofit workers already enrolled in the program. The U.S. Department of Education (DOE) previously proposed eliminating PSLF from its budget in 2018. Despite these attempts, the Consolidated Appropriations Act of 2018 section 315, commonly known as the overhead bill, provided $ 350 million for the PSLF to temporarily expand loan forgiveness for certain borrowers under different repayment plans.

Senator Heitkamp (D-ND) introduced the Help Encourage a Life of Public Service Act (HELPS Act) on June 25 to expand the Public Service Loan Forgiveness program and “encourage more students to enter the public service professions. public service”. The legislation waives the accrual of interest under the PSLF and directs the US Department of Education to do so. That streamlines the employment certification process and aligns deadlines for borrowers.

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