If you are working in a nonprofit organization, you do not only serve a more noble purpose than profit but also get the federal help for your debts. This help is a part of the Public Service Loan Forgiveness plan. As many people do not pay attention that the PSLF program benefits nonprofit employees, we feel the urge to inform you about this opportunity under a unique name- Nonprofit Loan Forgiveness. With this comprehensive guide, we aim to help people in need to have a better understanding of how the program works. In general, this forgiveness plan allows employees in not-for-profit enterprises to eliminate their outstanding balance of debts. However, the applicants need to make eligible payments for ten years to take advantage of forgiveness. There are also some other eligibility requirements regarding the type of loan, repayment plan, etc. We will go into the details in subsequent sections.
Before we dive into the details of the Nonprofit Loan Forgiveness, let’s first define what a not-for-profit organization is. The forgiveness plan explains that eligible organizations belong to 501(c)(3). In more detail, this number indicates the section of Title 26 in the United States Code related to nonprofit organizations.
Non Profit organizations that fall under this section are exempt from federal income tax. Usually, corporations, trusts, or associations that deal with religious, charitable, educational issues can be in this category. Besides, the organizations that foster sports competition and fights against children, women, or animal rights usually have 501(c)(3) status.
Student Loan Forgiveness for nonprofit employees is a part of Public Service Loan Forgiveness. Currently, this program is the absolute best, among other options for debt relief. The reason is that PSLF brings nonprofit workers many advantages that other forgiveness programs lack. First, it is capable of erasing all your outstanding debt. No cap limits the amount of forgiveness. After you qualify the forgiveness, all the debt will be gone no matter how much money you still owe. Second, the income you receive as financial assistance for your debt is not taxable. It means successful applicants do not need to pay additional income tax for the debt that they get rid of.
Another benefit Nonprofit Student Loan Forgiveness is that it does not require consecutive payments. You should make 120 payments to be eligible. If you worked for an ineligible employer for some time, it would not affect your eligibility except prolonging the time. All you need to do is continue making proper payments when you work for a nonprofit organization.
Also, the eligibility criteria offer some additional flexibility. Not only full-time workers, but also half-time employees in nonprofit organizations can apply to this program. Besides, if you had applied before, and got a rejection, you can still take advantage of the program. Through Temporary Expanded PSLF, Nonprofit Loan Forgiveness applicants can get forgiveness if the main reason for their previous rejection were ineligible repayment plan.
While Nonprofit Loan Forgiveness brings incredible benefits, it also puts you in a challenging process. There are different eligibility requirements regarding your loan type, repayment plan, actual payments, and workplace. We will describe each element in detail to help you identify if you qualify for this student loan forgiveness for nonprofit employees or not.
As mentioned before, you need to be an employer of a nonprofit organization that belongs to the 501(c)(3) category. It shows that your workplace is tax-exempt, too. Your work type or job responsibilities do not matter for this forgiveness program. However, you need to serve full-time work as defined in your organization’s regulations. You can also perform work at least 30 hours per week. Between these two work hour organizations, the higher matters. It means if your organization requires 40 hours per week, working 30 hours would not make you eligible. Plus, nonprofit employees in religious organizations should be more attentive as the time they spend on worshipping or proselytizing might not be included.
If you work part-time, do not worry. You can still have a chance to get Nonprofit Loan Forgiveness. Yet, you need to find another job in an eligible organization. The reason is that you will qualify if your total work hours for all eligible employers to meet the full-time requirement. Therefore, you need to work for more than one qualifying nonprofit employer as a part-time worker.
But what if your organization is not tax-exempt? The good news is that you can still be eligible even if you work in a not directly-eligible enterprise. Here, the purpose of your workplace matters. Some enterprises provide qualifying public service. In this case, their employees can be eligible for Nonprofit Loan Forgiveness.
Your loan type also matters for being eligible for student loan forgiveness for nonprofit employees. If you get a direct loan, then you will be qualified. However, holders of Perkins loan, federal family education, or private loan are not eligible to apply this forgiveness.
Also, do not worry about consolidation. If you previously utilized consolidation to join your loans into a direct consolidation loan, it will not affect your status negatively. You can still take advantage of the program.
This criterion is the one where most of the applicants fail. It requires that you make 120 qualifying payments, and after that, you avoid paying the remaining amount. However, the term ‘qualifying’ is so broad. For instance, the payment dates matter. The program counts only the payments you made after 2007 October. You should also pay the full amount that your bill requires. Plus, your repayment method should be based on Income-Driven plans. Other than all of these requirements, your payments only qualify if you work full-time for an eligible employee. As there are several conditions to make your payment suitable, it is one of the main reasons for failing.
The advantage of the payment requirement is that it does not demand you to make consecutive payments. Even if you fail any of the payment conditions, this failure will not make you ineligible. In other words, if you pay your 100th bill while working for a non-eligible employer, your payment count will not start from the beginning.
120 payment period is not short. It is at least ten years, and during this time, conditions can fluctuate a lot. It can be a nightmare to find out that you made ineligible payments when you finally apply to the Nonprofit Loan Forgiveness. Therefore, we suggest you regularly check if your payments are okay or not.
The officials also want to help applicants. As a result, they created an Employment Certification Form. What you need to do is fill out this form about your work. Then the officials notify you whether your payments are qualifying or not. You can fill and submit this form annually, or when you change your employer. In this way, you can keep track of payments, inform officials about your progress, and avoid any troubles.
Sure, it is optional during the 120 payment period. Yet, if you do not submit this form, you have to do it at the time of application. When you are ready to be a participant of this Nonprofit Student Loan Forgiveness, you have to fill Employment Certification for each employer you worked with. Hence, it is advisable to do it periodically, rather than keeping till the very last second. Anyway, you will have extensive paperwork at the time of application, so try to get rid of some hassles beforehand.
For some people, 120 payment periods seem like a long time. They are partially right, too, because these payments require at least ten years. You might think that one way to make you eligible quickly can be making higher payments than the billing amount. The bad news is that this strategy will not work. In Nonprofit Loan Forgiveness, every payment brings you one credit. It does not matter how much more you pay. The requirement is that you must pay what is in your bill.
If you still want to pay more, it is better to contact your service. You should warn them that you do not want the extra amount to cover any future payment. Otherwise, it is possible that next time you will not be required to pay anything, and you will not receive any credit.
If you successfully made 120 payments, it is finally time to apply for Nonprofit Loan Forgiveness. Please, do not forget that even at the time of application, you should be working for a qualifying employer.
You need to fill out the Public Service Loan Forgiveness form to start an application. In this form, you need to fill the details of your nonprofit organization as well as your loan. There is a tool called PSLF Help Tool, which can guide you to fill the form correctly. After you input all the necessary information, you need to sign it and send it to FedLoan Servicing by mail or fax.
As mentioned in the advantages of Nonprofit Student Loan Forgiveness, this program allows applicants to re-apply if they fail. This change to the PSLF program occurred in 2018, which brought an expanded list for eligible payments. If your application fails because you made some or all payments with ineligible repayment plan, you could still qualify for the program. With the PSLF program, you can only make repayments with Income-Driven plans. However, in Temporary Expanded Public Service Loan Forgiveness, Graduated, Extended, Consolidation Graduated, and Standard repayment methods are also applicable.
However, be fast. If you qualify for this expanded program, take immediate action to apply. As its name suggests, this program for nonprofit employees is temporary. There is a limited fund that assists people in need financially. Applicants can only take advantage of the program if funds exist. When the resources finish, there is no more chance for them. Therefore, immediately contact the US Department of Education with an email to send a request for this program.
The conditions of expanded PSLF for nonprofit workers are almost the same. However, there are slight changes. For instance, one of the requirements is that you should first apply to the Public Service Loan Forgiveness and get a rejection. Next, the reason for your rejection should be non-qualifying payments. If you had some or all of the payments on an ineligible repayment plan of PSLF, then you can apply to TEPSLF.
Another factor is that your last payment and payment made 12 months before should be at least as much as your Income-Driven repayment. Sure, you do not make any payment based on the Income-Driven Repayment plan. It is just a hypothetical number that indicates how much you would have paid under this plan. You might be asked to submit information related to your income and family size to estimate this number for Nonprofit Student Loan Forgiveness. Please, do not forget that ED will contact you if additional information is necessary. You only have 21 days to provide the critical documents. If you do not, the ED has a right to drop your application.
Temporary Expanded Public Service Loan Forgiveness is more comfortable to apply than regular PSLF for nonprofit workers. You do not need to collect many documents here. Instead, you contact your FedLoan Servicer and notify them about your request via email. In this email, note your birth date. Also, use the same name that you inputted in your rejected PSLF application.
The application process to the Nonprofit Loan Forgiveness program is challenging. The documentation process requires a lot of time and energy, which many nonprofit employees lack. If you decide to apply, you need to accept the time-consuming process and stress as its byproduct. Therefore, it is quite reasonable if you start questioning whether it is worth it or not.
Here are two sides to the story. On the one hand, this forgiveness program is a part of Public Service Loan Forgiveness, which has a 1% success rate. Among more than 100k applicants, only around 1500 could get financial assistance to get rid of their debts. So, it can be wrong to claim that you have a high probability of taking advantage of the program. However, we should also mention that payments after 2007 counts. Therefore, there are not many people who made 120 fully eligible payments. It is also possible that after some time, more applicants will become available.
On the other hand, PSLF is one of the most incredible forgiveness programs. We have explained the benefits of the program in previous sections. It is more flexible and offers unlimited forgiveness opportunities. After ten years of work, you can finally get rid of all your outstanding debt balance. Plus, Temporary Expanded PSLF gives you a second chance for forgiveness, but it is limited. For these reasons, we urge you to apply if you qualify.
Many people deal with the stress and financial impact of having student debt. Some of them actively seek a way to get rid of at least a portion of the debt with the help of proper student loan forgiveness programs. Luckily, there are many options for getting financial assistance from federal, state, or private organizations. The problem is that the requirements of each program can be overwhelming. It is difficult to separate the wheat from the chaff and choose the best option that fits their qualifications.
If you are lucky, you can find the program that you meet all the requirements. However, even if you do, the application process might not be so clear. In 2019, only 1% of applicants of Public Service Loan Forgiveness could successfully get help. Among the main reasons for failure are the missing documents or unqualified payments. Let’s say you decided to go for a Nonprofit Loan Forgiveness plan. You should make sure that you have the proper materials that reflect your loan repayment plan, qualifying payments, or eligible loan type. To avoid all those problems and improve your chance, it is wiser to get assistance from experts. We have extensive knowledge of each forgiveness plan available. Do not miss your opportunity for tiny mistakes. Contact us now to take advantage of the program immediately.