Public Service Loan Forgiveness For Nonprofits is about a new program that provides charitable team members financial relief.
You can build a beautiful career for yourself with a nonprofit organization and also help other people build their lives. However, the public service salary you would be receiving may make it very difficult to pay off your student loans. Thankfully, a program called The Public Service Loan Forgiveness (PSLF) can grant your forgiveness for your student loan if you’ve been in public service for 10 years.
You’re entitled to several benefits by working in a nonprofit, especially if you’re a federal student loan borrower. The PSLF program allows student loan borrowers working full-time at some nonprofits to be eligible for forgiveness such that their remaining loans are erased. However, the same cannot be said for private student loan borrowers as they’re ineligible for PSLF, unfortunately. Some conditions must be met before individuals are qualified for the loan forgiveness program. Some of these conditions are:
Choosing the best income-driven repayment plan for PSLF
Apart from working for a nonprofit organization for 10 years, you’re also important to pay back your loans with the eligible repayment plan that helps you qualify for PSLF. The four income-driven qualifying repayment plans are:
These plans ensure that your monthly payment cap is at 10% to 20% of your discretionary income and extend your repayment term to between 20 and 25 years. Because these plans differ, you must carefully consider the merits and demerits of each plan before you make your choice.
How does the PSLF Limited Waiver work?
Typically, student loan borrowers need to pay their loans back based on an income-driven plan to be eligible for PSLF. However, more recent legislation has waived this requirement temporarily.
The limited waiver opportunity allows you to have your student loan repayment eligible for PSLF even if your plan doesn’t typically qualify for the program. Also, this waver ensures that the suspended payment period caused by the emergency forbearance counts towards PSLF.
You can take advantage of this opportunity by submitting your Employer Certification form before 31st October 2022. If you owe any loans such as the FFEL loan that are not part of the Direct loan program, you must also use a Direct consolidation loan to consolidate the loan before the deadline.
Unfortunately, the only loan ineligible for this waiver is the parent loan. So, taking advantage of this waiver makes sense if you have other types of loans since it moves you months or years closer to getting loan forgiveness through the PSLF.
How to apply for the PSLF program?
If you’re a new graduate working for a nonprofit organization or in this sector, these are some steps that you can take to apply for this program:
Note that there’ll be another loan servicer to handle the PSLF paperwork if the contract with FedLoan Servicing ends.
You must submit your Employment Certification form because your loan servicing company is going to inform you whether your employment qualifies for this program or not. If your employer doesn’t qualify for the program, the best thing to do is to look for other employment options. However, it would be detrimental to you if you don’t know this early enough. If you have qualified employees to receive loan forgiveness, and you play your part, then in no time, you’ll receive the student loan forgiveness that you seek. The best part of this program is that your loan isn’t considered a taxable income. This means that you won’t be getting hefty tax bills.
Other means of getting loan forgiveness while working for a nonprofit
The most commonly-known path to receiving student loan forgiveness is PSLF. However, it’s not the only option for people working in the public service. Other programs, even job-specific programs, exist, and they can earn your loan forgiveness as well. Some of these are:
You can consider other options for your loan forgiveness if you’re working in the public sector and specific careers. You’ll find that many of these programs offer student loan forgiveness much sooner than the PSLF program.
If you’re a new graduate working in the public service, you should consider exploring the PSLF program as soon as possible. It ensures that your payments are more manageable and you’re not overwhelmed by the burdens of your student loan debt. However, you must also explore other options and consider their downsides before proceeding.
Contact Dennis Lodge at [email protected] to learn more.
Public Service Loan Forgiveness For Nonprofits was first posted at NANOE
For more articles like Public Service Loan Forgiveness For Nonprofits VISIT HERE