Nonprofit Operations

The Issue

In 2007, President George W. Bush signed the Public Service Loan Forgiveness (PSLF) program into law, to encourage college graduates to pursue careers in service of the common good. Social workers, educators, researchers, public-interest lawyers, nurses, and museum curators working 10 years in the nonprofit sector can earn forgiveness on eligible student loans. The program forgives the remaining balance on employees’ direct loans after 120 qualifying monthly payments have been made under a qualifying repayment plan while working full-time for a qualifying employer. Qualifying employers include the U.S. federal, state, local, or tribal government or nonprofit organizations.

Public service professionals, like nonprofit employees, deliver services to the communities that need them the most and help uplift families across the nation. PSLF helps to close the wage gap between the nonprofit and private sectors. Improving this program strengthens nonprofits’ ability to deliver high-impact programs that ensure healthy, thriving communities. It enables nonprofits to recruit top talent, because our employees can have more confidence that their student debt will not hinder their long-term financial goals.

In October 2021, the U.S. Department of Education settled a lawsuit with the American Federation of Teachers, acknowledging and attempting to remedy various failures in the management of PSLF. The settlement provides a review of previously denied applications and gives program participants more information about qualifying for forgiveness. Listen to Independent Sector’s 2019 podcast with one of the lawyers who secured this victory.