Do you ever wish your student loans would disappear? That wish isn’t impossible thanks to student loan forgiveness for non-profit employees. Public Service Loan Forgiveness (PSLF) has been available since 2007 and nearly 500,000 borrowers have signed up for it since that time. According to a Brookings Report, nearly one-third of those enrolled have more than $100,000 in federal student loans as well as graduate or professional degrees.
What is Public Service Loan Forgiveness for Non-Profit?
PSLF wipes away the balance on your student loans after you make 120 qualifying monthly payments under a qualifying repayment plan working full-time for a qualifying employer.
What is Qualifying Employment for Student Loan Forgiveness for Non-Profit?
Qualifying employment for the PSLF Program focuses more on who your employer is than the type of work you do. If you work for the following organizations, then you will qualify:
- Government organizations at any level
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
- Other types of not-for-profit organizations that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code, if their primary purpose is to provide certain types of qualifying public services
You can also serve as a full-time AmeriCorps or Peace Corps volunteer to qualify for PSLF. It’s important to note that labor unions, partisan political organizations, for-profit organizations, and non-profit organizations that are not tax-exempt under Section 501(c)(3) and do not provide a qualifying public service as their primary function do not qualify for PSLF.
If you meet your employer’s definition of full-time work or you work at least 30 hours per week, then you typically meet the requirements for working full-time. Also, only loans you received under the William D. Ford Federal Direct Loan Program will qualify.
How Does Non-Profit Student Loan Forgiveness Work?
In order to qualify for student loan forgiveness as a non-profit employee, you must:
- Have an eligible loan (only Direct loans qualify for PSLF benefits)
- Have an eligible job (only Public Service jobs qualify for PSLF benefits)
- Make 120 monthly payments on an Income-Based Repayment Plan
After you meet these requirements, you’ll have your Federal student loans discharged i.e. cancelled completely and you won’t be taxed on the remaining amount. Non-profit student loan forgiveness programs are one of the only federal programs that don’t count the money forgiven as taxable income, so you don’t incur any additional tax liabilities.
What Are Qualifying Payments for Student Loan Forgiveness?
You need to make 120 monthly student loan payments that meet the following conditions:
1. All payments must be on time. Your payments must have been paid on or before the due date.
2. Payments must be made in full each month. You must make payments for the full amount due according to your repayment plan.
3. You must be paying on an income-driven repayment plan such as the Income based, Pay as You Earn, or Revised Pay As You Earn plan.
That means 10 years of on-time payments makes up 120 payments in total. Only payments made after October 1, 2007 would qualify, so the first enrollees to see any benefit would’ve seen it on October 1, 2017.
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How Can I Apply for Student Loan Forgiveness for Non-Profit?
By completing and submitting the Employment Certification form as soon as possible, you’ll make sure that all of your qualifying payments count. You don’t want to miss out on several years of payments by submitting the form late. Submit this form annually and every time you switch employers.
What is Teacher Loan Forgiveness?
The Teacher Loan Forgiveness Program is for teachers who have taught full-time for five complete and consecutive academic years in a low-income school or in an educational service agency. They can be eligible for forgiveness of up to $17,500 on Direct Subsidized and Unsubsidized Loans and Subsidized and Unsubsidized Federal Stafford Loans.
What Are the Eligibility Requirements for Teacher Loan Forgiveness?
- In order to qualify for Teacher Loan Forgiveness, you must not have had an outstanding balance on your Direct Loans or on your Federal Family Education Loan (FFEL) Program loans as of October 1, 1998 or as of the date you obtained either loan after October 1, 1998.
- You must have been employed for five complete academic years as a full-time, highly qualified teacher after the 1997-1998 school year for at least one year.
- You must have been employed at a school that serves low-income students.
- The loan must have been made before the end of your five years of qualifying service.
What Constitutes a Highly Qualified Teacher for Teacher Loan Forgiveness?
All teachers must meet basic requirements to be considered highly qualified. These include:
- You must have at least a bachelor’s degree
- You must be a fully certified teacher according to the state
- You must have no certification or licensure requirements waived on an emergency, temporary, or provisional basis.
You are considered to have full state certification even if you received it through alternative route like passing the state teacher licensing exam. If you teach at a public charter school, then you’re considered to have received the full state certification if you meet all of the requirements set forth in the state’s public charter school law. There are additional requirements you can view on the Department of Education’s website.
What Schools Qualify for Teacher Loan Forgiveness?
Check the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits (Low-Income School Directory), which is published by the U.S. Department of Education on an annual basis. You can search the database for the years you were employed as a teacher to find out if your school is classified as low-income title 1. If the directory isn’t available before May 1 of any year, then you can use the previous year’s directory as a guide for that year.
What Are Some State-Specific Student Loan Forgiveness Programs for Non-Profits?
There are also student loan forgiveness programs for non-profits only available in certain states. Here are some of the student loan forgiveness programs available across the country in states like New York, Illinois, and Maine.
New York City Loan Forgiveness Program
The New York City Forgiveness Program gives certified classroom teachers and school-based pedagogic clinicians working in shortage areas and bilingual education the opportunity to have their loans repaid. You must complete six years of service in a New York City public school within an assigned area of shortage.
- Amount: Varies
- Possession of an appropriate New York State initial or provisional certificate corresponding to one of the above shortage areas.
- Bilingual areas require possession of a bilingual extension to the certificate. If the applicant has not yet received the actual certificate or extension, an official letter from the college/university indicating that they have satisfactorily completed a state-approved education program.
- Proof of U.S. Citizenship or Permanent Residency.
Illinois Student Loan Forgiveness Programs
Residents in Illinois can qualify for various Federal student loan forgiveness programs, such as the Illinois Teachers Loan Repayment Program. The program encourages academically talented Illinois students to teach in Illinois schools in low-income areas. If these obligations are met by a Federal Student Loan borrower, they can qualify for an additional matching award of up to $5,000 for the qualifying teacher to repay their student loan debt.
- Amount: Up to $5,000
- You are a US citizen
- You are an Illinois resident
- You are a borrower who has had a number of your educational loans forgiven under the federal government’s loan forgiveness programs
- You must have a remaining balance on your loans
- You must have fulfilled your five-year teaching obligation in an Illinois elementary or secondary school designated as a low-income school or have worked full time for 2 consecutive years in a child care facility that serves a low-income area in Illinois
- You can follow this link to apply and see more program information here.
Maine Loan Forgiveness Programs
Residents in Maine can benefit from the Educators for Maine program, which makes you eligible to have one year of your loan forgiven for every year of return service as a full-time teacher employed by a Maine public school. This isn’t strictly for non-profit workers, though, because employees at Maine private schools approved for tuition purposes also qualify. In addition, two years’ worth of your loan may be forgiven for each year that you are a full-time teacher in an eligible Maine school working in an underserved subject area.
- Amount: Varies
- You must be certified by the Maine Department of Education;
- You must be employed at a Maine public elementary or secondary school, a Maine private elementary or secondary school that has been approved for tuition purposes, or a state-operated school;
- You must be employed as a Jobs for Maine’s Graduates specialist with appropriate teacher certification;
- You must be employed as an elementary or secondary teacher, specialized subject teacher, vocational or industrial arts teacher
Child Care Providers Must Have a Degree or Certificate in:
- Child development, early childhood education, early childhood development, health and human services, with a focus on early childhood, special education from birth to five years or other similar programs, as determined by FAME
- You must be employed at a child care facility
- You can find more program information here.
Student loan forgiveness programs for nonprofits are some of the best programs available for forgiving the balance of your federal loans. They are widely accessible to employees of all 501(c)(3) organizations as well as people who are not traditionally considered “non-profit” employees. You do not need an attorney to apply, and can be done on your own with a little bit of research. Watching your remaining student loan debt vanish after 10 years may seem too good to be true, but PSLF is still around and available to all qualifying enrollees.