Work For A Non-Profit? Student Loan Forgiveness Might Be An Option

• Author: Kelly Cooke
• Posted: 2024-11-07

Millions of people have student loan payments to make and while ideally it would be a smooth process, it oftentimes isn't. Student loans can take up a considerable amount of your income, which can hamper financial health.

Fortunately though, if you work for a nonprofit organization, it's very much possible to get your student loans partially or completely forgiven.

Here's what you need to know.

Why Is Student Loan Forgiveness Provided?

Non-profit work is incredibly important and often a necessary resource for people who have limited options. Despite their significance though, non-profits tend to provide pretty low pay for employees or even don't pay people at all in the case of volunteers.

This can be an issue, since there are many non-profit fields which require some degree of advanced education, but leaves people who choose that route in a bit of a bind, since paying back student loan debt can be a serious challenge.

As a result, there are several state and federal programs that can help people who specialize in non-profit work get rid of their student debt.

Who Exactly Is Eligible?

Eligibility requirements vary considerably from program to program, but forgiveness for federal student loans can be fairly wide-ranging.

The most common scenario for forgiveness is the PSLF (Public Service Loan Forgiveness) program, which not only applies to people who work for tax-exempt non-profit organizations, but also to people who work for federal agencies.

To qualify, you must be engaged in an income-driven repayment plan, which involves monthly student loan payments that are proportional to your income. You must also work a certain number of hours, at least 30, and be considered a full time employee; if you only work 10 or so hours a week, you won't be able to gain access to PSLF benefits.

In the event that you become a PSLF recipient, you must also make 120, or ten year's worth, of monthly payments, after which the rest of your student loan balance will be paid off. While you'll have to pay off a considerable amount of your loans, there's also not much of a forgiveness limit, so the PSLF program could potentially save you decades, or even a lifetime's worth, of financial strain.

However, the PSLF isn't the only program that provides student loan forgiveness, although unlike the PSLF, they're only available to highly specific individuals.

Perkins Loan Cancellation

If you work in the educational field, it's possible to have up to $17,500 worth of student loans forgiven assuming you meet the following conditions:

 

• You work in a low-income school district or work for an education agency that services low-income individuals


• Work 5 consecutive years in an educational capacity


• Be a state-certified, highly qualified teacher with a bachelor's degree and meet the full requirements for licensure.


• Special considerations are given to teachers who specialize in math, special education, and bilingual subject matters.

National Health Service Corps

If you happen to work in the healthcare field, you can similarly receive financial assistance, but it's usually much more substantial than those received by teachers. Also, unlike many other federal forgiveness programs, assistance applies to private, in addition to public, loans.

Medical professionals who can receive National Health Service Corps assistance include a wide range of disciplines, including dentistry, pharmacy, psychiatric care, counseling, social work, and nursing.

In exchange for working 2 years full-time, you'll be eligible for $50,000 worth of forgiveness and 2 years part-time will net you $25,000 in aid.

In order to fully qualify though, you'll need to dedicate your time at a non-profit entity or a public facility, which are likely to have unfavorable levels of compensation, which is something worth keeping in mind.

Some Additional Things to Consider

Before you think about making federal loan forgiveness a major part of your financial planning, you should know that actually receiving forgiveness is on the rarer side.

Lots of people who do apply for forgiveness receive it, but the reality is that most people do not. It's common for public servants to apply for forgiveness for years or decades and not receive any sort of aid. Forgiveness is typically reserved for people with exceptional qualifications that the government is trying to keep working in the public or non-profit sectors due to how invaluable they are.

So, while there are many avenues available for loan forgiveness available to non-profit employees, it's not a guarantee of anything.