While federal student loan forgiveness has been making headlines lately, this is not a new concept for the nonprofit sector. Since 2007, employees of charitable nonprofits and other public service jobs have been eligible for forgiveness of their federal student loans under the Public Service Loan Forgiveness (PSLF) program.
Normally, this benefit is only available to nonprofit and government workers who have made 120 timely monthly payments on a qualifying loan. But for a limited time, the PSLF benefit is being expanded to include previously ineligible payments.
Now through October 31, employees who qualify can take advantage of a “temporary waiver” of the normal PSLF rules. Under the waiver, forgiveness does not only apply to timely payments, but can also apply to partial, lump sum and late payments and payments made during certain deferment and forbearance periods.
When communicating this update to your employees, it is important to note that:
- Only loans made through the Direct Loan Program qualify for the PSLF.
- Only payments made after October 1, 2007 qualify for forgiveness.
- Even if they were not eligible for the program previously, they may now qualify to receive a credit for payments under these relaxed rules.
- They can determine eligibility through the PSLF Help Tool on the Federal Student Aid website.
- The deadline for applying for the temporary waiver is October 31, 2022, after which the program will revert to previous eligibility rules.
Help Your Employees Get it Right
If you have any questions about this expanded benefit or communicating it to your employees, Grassi has a full team of HR Consulting professionals who can help you and your employees get it right. Contact your Grassi Nonprofit advisor or David M. Rottkamp, Nonprofit Practice Leader, to learn more.
