Don’t Let Student Loan Debt Keep You From Your Dream Job was originally published on Idealist Careers.
The average graduate of the class of 2022 owed $28,950 in student debt at the time they finished their degree. For grad students, that number can soar up to $189,162. That’s a lot of money, but increasing debt shouldn’t stop you from pursuing a career in social impact. There are options.
The Public Service Loan Forgiveness program (PSLF) makes it possible for you to pay your loans and follow your dream. Whether you are already enrolled in the program or are just reading about it for the first time, here is what you need to know about how to manage student loan debt while working for a nonprofit.
What is the PSLF program?
The PSLF program began in 2007, when a bipartisan congress passed the College Cost Reduction and Access Act. Borrowers who work full time in a public-interest field can have their federal student loans forgiven after making 120 monthly payments—typically over the course of about 10 years. PSLF was defined broadly, and therefore applies to a variety of public service professions.
Tips for qualifying for PSLF
There are certain steps borrowers can take in order to determine whether their payments and jobs qualify for PSLF:
- First, make sure you have the right kind of loan. Only Federal Direct Loans are eligible for PSLF. Try to avoid taking out private loans, as they are not eligible for loan forgiveness. If you already have loans and are unsure what kind they are, check the Department of Education’s loan database to retrieve your information.
- Apply for the right kind of repayment plan. To qualify for PSLF, borrowers must be on one of the income-driven repayment plans, which base payments off of your income and family size.
- Make sure your payments qualify, which means that they must be made while you’re working full time in the public interest sector and follow the requirements of your payment plan. Even though you have to make 120 payments to qualify for PSLF, they don’t have to be made consecutively.
- Check that your employer counts as a qualifying organization. If you work for a 501(c)3 entity or a state, federal, or tribal government job, your employment typically qualifies. As a standard matter, partisan political organizations and religious work never qualify—but there is a gray area where it is not so easy to determine. To help track progress toward the required 120 payments, make sure to submit an employee-certification form to your loan servicer every year, or if you start a new job.
- Once you make 120 payments toward your student loan debt, you can submit your request for forgiveness. Just don’t make any employment changes until you hear back from the Department of Education.
Pro Tip: Just because you’re not earning a salary does not mean you shouldn’t consider signing up for an income-based plan and submitting employee certification forms. If you are a volunteer in the Peace Corps or AmeriCorps, any payments you make while serving will count as a qualifying payment—and your payments could even be $0!
Need additional resources?
There are a variety of online resources to help borrowers manage their student loan debt and learn about the PSLF program. And if you’ve tried applying for PSLF before and haven’t been approved, then here’s some good news: Last year, the U.S. Department of Education expanded eligibility for the program under the temporary PSLF waiver. Check out the specifics on their website to see if you meet the updated requirements before the waiver expires on October 31.
More than 43 million people owe federal student loans, and about 25% of the workforce is eligible for PSLF. Even if you aren’t yet able to qualify for loan forgiveness, ensuring that you meet the requirements for PSLF will take some of the pressure off of repaying your student loan debt. And in the meantime, you’ll be able to pursue your dream of working in social impact.