Financial Resources

There are two separate programs designed to reduce the student loan burden, but confusion abounds because most news reports lump them into one story. Nonprofit employers are urged to inform your staff about these important but temporary opportunities:

1. The first program is the longstanding, formal Public Service Loan Forgiveness (PSLF) program that can provide relief to nonprofit employees and others in public service jobs. Under a special expanded window of opportunity that expires October 31, borrowers may be eligible to receive credit for payments that previously did not qualify for PSLF.

2. The second program – the debt cancellation plan – which has received the most attention because it’s available to almost everyone with federal student loans – would cancel up to $10,000 (or $20,000 for some people) of federal student loan debt. Applications are expected to be available starting this month.

PSLF Waiver Expiring Soon - Check Your Status NOW! The Public Service Loan Forgiveness (PSLF) Temporary Waiver ends Oct. 31, 2022, meaning individuals with federal student loans who work in public service jobs – which expressly includes 501(c)(3) nonprofits -- only have until Halloween to submit their loan certification forms to determine whether more of your previous payments (late, early, lump sum, etc.) may count towards forgiveness. The formal PSLF, which has been around since 2007, has a Temporary Waiver that expires October 31, 2022. The Temporary Waiver significantly expands who's eligible. So even if you’ve been denied in the past, you now may be eligible, but only if you take immediate action. Check out the PSLF Help Tool now!

• Employees with Federal Student Loan Debt: check your eligibility for Public Service Loan Forgiveness today!

• CEOs and Executive Directors: tell your employees to check today!

• Everyone: spread the word!

Bottom Line: All charitable nonprofit workers with federal student debt should check your eligibility status for Public Service Loan Forgiveness under the Temporary Waiver before October 31. (Remember that the Temporary Waiver is separate from the debt cancellation plan.) Do not miss out on this one-time opportunity to receive forgiveness on previously ineligible payments.

Student Debt Cancellation In August, President Biden announced a plan for student debt relief by cancelling up to $10,000 in federal student loans for most borrowers and $20,000 for Pell Grant recipients. To qualify, borrowers must have incomes of less than $125,000 for individuals or $250,000 for couples. The Administration stated applications for the cancellation will be available beginning this month and will be open through December 2023. See A Nonprofit Perspective on Student Loan Relief for more information. Cost Estimate: The plan is estimated to cost the Treasury $420 billion over 10 years, according to the nonpartisan Congressional Budget Office. The estimate does not, however, take into account new repayment caps or other changes to loan terms implemented this summer. The CBO states that the “estimates are highly uncertain” and will depend on projections on future economic conditions and modifications in loan terms. Litigation: Six Republican state attorneys general filed suit to challenge the loan forgiveness program, arguing financial hardship to the private, for-profit loan servicers that hold and process federal loans (FFEL loans) will harm their state revenues. The suit further contends the debt relief violates the federal Administrative Procedures Act and that the pandemic emergency declaration basis for the plan is invalid now that the President has said the pandemic is over. The Administration responded by no longer permitting the consolidation of certain private loans to federal loans and excluding privately held debt from the relief. More lawsuits are expected although legal experts differ on whether the cases will be permitted.