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 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.
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.
Nonprofit employees are encouraged to use the PSLF Help Tool and submit employer certification forms immediately.
Recent PSLF & Repayment Changes
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New Default Plan Risk:
Borrowers forced to switch from the ended SAVE plan have 90 days upon notice to select a new plan. If unresponsive, automatic enrollment in the Tiered Standard Plan yields zero PSLF credit.
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Qualifying Plans:
New borrowers on or after July 1 must use the Repayment Assistance Plan (RAP) to earn PSLF credit.
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Strict Payment Rules:
Payments must be strictly on time under new guidelines to count toward your 120 qualifying PSLF months, removing prior grace periods.
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Employer Eligibility Court Action:
Attempts by the administration to grant the Education Secretary authority to disqualify certain non-profit or government employers deemed engaged in substantial illegal activities were blocked by a federal judge, though policy landscapes remain volatile
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Exempt Forgiveness:
Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, and discharges due to death or total/permanent disability remain permanently tax-free at the federal level