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Public Service Loan Forgiveness

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If you are employed by a nonprofit or government and are one of the 34 million borrowers who have federal student loan debt, you may be eligible for loan forgiveness, cancellation, and/or consolidation under the Public Service Loan Forgiveness program (PSLF). Created under the College Cost Reduction and Access Act of 2007, PSLF allows borrowers who work full time for nonprofits and government agencies to have their outstanding debt forgiven tax-free on Federal Direct Loans, after making 120 qualifying monthly payments under a qualifying repayment plan.

How to Certify Your Employment

Borrowers can use the PSLF Help Tool to fill out their form and have their employers, including 501(c)(3) charitable nonprofits, digitally sign and certify eligible employment, and electronically submit the form to their PSLF servicer for processing.

The process for certification is simple, but it is best to start now. Our short video explains the steps: 

Why It Matters

The program helps attract talent to work at 501(c)(3) charitable nonprofits, encourages and incentivizes employees to remain in the sector, and provides relief for public service professionals who are often paid less than other employment opportunities.

Nonprofit employees are encouraged to use the PSLF Help Tool and submit employer certification forms immediately. 

Requirements include:

  • Qualifying Loans: Loan must be through the Federal Direct Student loan program, specifically the “William D. Ford Federal Direct Loan (Direct Loan) Program". Additional types of loans like Perkins, FFEL, and consolidated loans qualify under new regulations that took effect July 1, 2023. Borrowers should inquire with their loan servicer or the Department of Education.
  • Qualifying Payments: After 120 qualifying payments (this usually takes 10 years) in certain repayment plans,  employees in certain public service jobs, including at 501(c)(3) charitable nonprofits, may be eligible for loan forgiveness as long as their loans are not in default, and their loans are under a qualifying repayment plan. 
  • Qualifying Employment includes:
    • Employment with a charitable nonprofit tax-exempt organization under 501(c)(3)
    • Employment with a government agency (federal, state, local or tribal)
    • Full time AmeriCorps or Peace Corps members

Where We Stand

As proven job creators, nonprofits can and should participate in the development of job growth policies at the federal, state, and local levels. The National Council of Nonprofits strongly endorses policies that promote job creation in all sectors of the economy, especially policies that promote and incentivize employment at charitable nonprofits.

- Public Policy Agenda

Status

In April 2024, The U.S. Department of Education announced a debt cancellation plan to cancel some accrued interest, automatically forgive certain qualifying borrowers in certain payment plans including Public Service Loan Forgiveness (PSLF) and other income-driven repayment plans like SAVE (Saving on a Valuable Education plan) without requiring paperwork, potentially lower monthly payments for certain borrowers as well as cancelling some debt due to unpaid interest and loans older than 20 years or more.

In February 2025, a federal circuit court upheld a preliminary injunction blocking the implementation of early forgiveness provisions of the SAVE plan. More than 8 million borrowers were enrolled in SAVE, which lowered payments for some borrowers earning Public Service Loan Forgiveness. The case now goes back to the district court.  After the ruling, the Department of Education removed applications for borrowers to apply for income-drive repayment plans and federal Direct consolidation loans. Both programs are used for lower payments to earn forgiveness under PSLF. It is unclear how borrowers previously in SAVE are to apply for different loans. 

On Mar. 7, 2025, President Trump signed an executive order directing the Department of Education to propose changes to the Public Service Loan Forgiveness (PSLF) program to to exclude organizations that “engage in activities that have a substantial illegal purpose,” including organizations that advance illegal immigration or support “terrorism”, “child abuse”, “illegal discrimination”, or “disorderly conduct”. It does not make any immediate changes to the program. Any proposed revisions would need to be made by updating current regulations and would be required by statute to go through a process called negotiated rulemaking, which is a process that includes the agencies as well as representatives from impacted parties. Executive orders cannot override federal law and the Public Service Loan Forgiveness statute states that 501(c)(3) organizations are covered as eligible employers for PSLF. 

On Apr. 4, the Department of Education announced its intent to host public hearings and establish negotiated rulemaking committees to prepare proposed regulations on programs under the Higher Education Act, including PSLF. Of particular concern is the intent to “refin[e] definitions of a qualifying employer for the purposes of determining eligibility” for PSLF. See NCN's Comments to the Department of Education.

Background

Regulations by the Department of Educations, effective July 1, 2023, expand eligible borrowers for forgiveness under PSLF. Key provisions allow more kinds of payments (certain types of deferment and forbearance as well as lump sum and late payments) to count as qualifying payments, clarify the definitions of full-time employment and qualifying employer, and codify the reconsideration process. Other beneficial provisions would provide a hold-harmless option for deferment or forbearance, automate progress toward forgiveness, and eliminate prospective interest capitalization not required by statute. 

See our Comments to the Department of Education and Chart on the Department of Education Final Regulations for PSLF for more information.

The Administration also announced that the count adjustment is expected to be fully implemented in September 2024, which will allow borrowers to “see a full and accurate count of their progress toward loan forgiveness.” Borrowers can receive credit toward PSLF for any month covered by the payment count if they meet employment requirements. Learn more about how and why consolidation helps PSLF borrowers and how to maximize benefits under the program.

Take Action

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 (Employment Certification 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:

Nonprofit Employers:

Spread the word! Many nonprofit employees aren’t aware that they may qualify for student loan forgiveness. Share this webpage with your employees!

More About PSLF

Additional Resources

Additional Resources

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