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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. 

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

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.

For even more information, watch Everything Nonprofit Employees Need to Know About Public Service Loan Forgiveness (1:00:35) (slides) with the National Council of Nonprofits, Department of Education, The Institute of Student Loan Advisors (TISLA), and PSLF.us for additional answers to your questions about PSLF. 

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.

The original Eligibility Requirements include the following. Some requirements have been expanded and may apply after final regulations become effective on July 1, 2023. Nonprofit employees are encouraged to use the PSLF Help Tool and submit employer certification forms to be considered. 

  • Loan must be through the Federal Direct Student loan program, specifically the “William D. Ford Federal Direct Loan (Direct Loan) Program". Other types of loans may qualify as regulations become effective.
  • After 120 qualifying payments (this usually takes 10 years) 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 government agency (federal, state, local or tribal)
    • Employment with a charitable nonprofit tax-exempt under 501(c)(3)
    • 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

On Aug. 24, 2022, President Biden announced student debt relief and changes to federal student loan programs. The plan could impact more than 45 million borrowers. See Student Loan Rollercoaster and How It Impacts Nonprofit Workers for more information.

Borrowers have been placed in forbearance with 0% interest rates during ongoing litigation regarding student debt cancellation, according to an announcement issued on Nov. 22, 2022. If the debt cancellation program is not implemented and the litigation has not been resolved by June 30, 2023, then payments will resume in 60 day afterwards. This period of forbearance will count as payments towards the minimum requirements for PSLF so long as the borrower continues to be employed full time at a qualifying employer.

In October 2022, the Department of Education released final regulations, which expand eligible borrowers for forgiveness under PSLF. The Department plans the regulations to become effective in July 2023.

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, clarifying the definitions of full-time employment and qualifying employer, and codifying 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.

Two measures in Congress would use the Congressional Review Act (CRA) to roll back the Department of Education's action to pause student loan payments and force the Department to immediately reinstate the monthly payment requirements for borrowers. NCN opposes S.J.Res.22 and H.J.Res.45 as currently written because the measures would abruptly and retroactively deprive Public Service Loan Forgiveness (PSLF) program participants of the benefits they have earned under the program. See our Letter to Congressional Leadership for more information.

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