Written By Melanie Lockert
Working in the nonprofit sector can offer purpose and passion for your job. But it can also mean long hours and low pay that makes managing student loan payments difficult.
However, there are various student loan forgiveness and repayment assistance programs that can help borrowers manage their federal student loans. Read on for more about nonprofit student loan forgiveness nonprofit options.
1. Public Service Loan Forgiveness
Amount of student loan forgiveness: 100% of student loan debt
One of the most popular nonprofit student loan forgiveness options is the Public Service Loan Forgiveness (PSLF) program. Under the PSLF program, workers employed through a qualified 501(c)(3) not-for-profit organization may qualify to have all of their loans forgiven.
On top of that, based on the current Internal Revenue Code, forgiveness is tax-exempt. That means no taxes are imposed on the forgiven amount, so this is true debt relief. This is a huge benefit compared to student loan forgiveness under an income-driven repayment plan (IDR) such as Pay As You Earn (PAYE) or Saving on a Valuable Education (SAVE).
How to qualify
To be eligible for PSLF, you’ll need to work for 10 years at a qualifying employer such as a 501(c)(3) and make a total of 120 monthly payments (PSLF payments don't need to be consecutive). During the 10 years of service, your employment must be full-time, which is defined as 30 hours or more.
If you work under a program like Americorps or the Peace Corps, your employment can still count. However, partisan political organizations or labor unions don't count.
You must have loans through the Federal Direct Loan Program that are repaid on a qualifying repayment plan. This includes income-driven repayment plans (IDR). Federal Family Education Loans (FFEL) and Perkins Loans aren't eligible loans. There may be a workaround though if you consolidate them with a Direct Consolidation Loan.
How to get started with PSLF
During your service years at qualifying non-profit organizations or government organizations, make sure you qualify for PSLF by turning in an Employment Certification Form every year. It’s also a good idea to submit it each time you change jobs as well.
After submitting your paperwork for 10 years and making 120 qualifying payments, you can submit your PSLF application to:
U.S. Department of Education
MOHELA, 633 Spirit Drive
Chesterfield, MO 63005-1243.
You can also fax your paperwork to:
866-222-7060
If MOHELA is your current loan servicer, you can upload your PSLF paperwork through its web portal to get your remaining balance forgiven. This is especially good if you have PLUS loans and a high interest rate. If you're denied from the PSLF program, you may want to check out the eligibility requirements for the Temporary Expanded Public Service Loan Forgiveness Program (TEPSLF) which may help. You can also check out the PSLF help tool for guidance and review the one-time IDR Adjustment to see if the waiver helps your situation.
Get Started With Our New IDR Calculator
2. Teacher Loan Forgiveness
Amount of student loan forgiveness: $5,000 or $17,500
If you work at a nonprofit school that qualifies, you may be eligible for Teacher Loan Forgiveness. Though it doesn’t provide forgiveness for all of your student loans, it can provide some student loan repayment assistance.
How to qualify
To qualify for Teacher Loan Forgiveness, you must work full time at a low-income school and serve for five years. Your student loan forgiveness could range from $5,000 to $17,500, depending on which subject you teach. To receive the maximum amount, you need to be deemed a highly qualified math, science or special education teacher.
Teachers must be licensed. Depending on the grade level, you may also have additional requirements you need to meet, such as passing a subject test or having an advanced degree.
How to get started with Teacher Loan Forgiveness
Verify that your place of employment qualifies for this nonprofit student loan forgiveness program. You can confirm whether you’re employed by an eligible school by searching the Teacher Cancellation Low Income (TCLI) directory for your school or organization.
After working for five years toward this forgiveness program, you can submit the Teacher Loan Forgiveness Application to your student loan servicer.
3. Perkins Loan Teacher Cancellation
Amount of student loan forgiveness: 100% of student loan debt
If you work at a nonprofit elementary or secondary school in public education, you could get all of your Perkins Loans cancelled.
How to qualify
To qualify for Perkins Loan Teacher Cancellation, you must work at a nonprofit school in early childhood education and serve low-income families. You must teach in special education or a subject that has a shortage of teachers.
How to get started with Perkins Loan Teacher Cancellation
To get the full amount of nonprofit student loan forgiveness, you need to serve for five years in public child education. Each year earns you a portion of student loan debt forgiveness.
- Years 1 and 2: 15% of loans are forgiven.
- Years 3 and 4: 20% of loans are forgiven.
- Year 5: 30% of loans are forgiven.
You must apply to have your loans forgiven through the school’s loan servicer or with the school that disbursed your loans. You can get the appropriate paperwork through your school and submit the forms back to the school for student loan forgiveness.
4. National Health Service Corps State Loan Repayment Program
Amount of student loan forgiveness: Varies by state
If you’re a clinician, you may be eligible for student loan forgiveness as a nonprofit employee with the National Health Service Corps (NHSC) State Loan Repayment Program (SLRP).
How to qualify
To qualify for this program, you must work in a qualified field in public health. According to the NHSC website, eligible health care clinicians include:
- Allopathic Medicine (MD)
- Osteopathic Medicine (DO)
- General and Pediatric Dentistry (DDS/DMD)
- Nurse Practitioner (NP)
- Certified Nurse-Midwife (CNM)
- Physician Assistant (PA)
- Registered Dental Hygienist (RDH)
- Health Service Psychologist (HSP) (Clinical and Counseling)
- Licensed Clinical Social Worker (LCSW)
- Psychiatric Nurse Specialist (PNS)
- Licensed Professional Counselor (LPC)
- Marriage and Family Therapist (MFT)
- Registered Nurse (RN)
- Pharmacist (Pharm)
- Substance Use Disorder Counselors
You must work full-time for two years or part-time for four years. Clinicians are required to serve in Health Professional Shortage Areas (HPSAs) at public or nonprofit sites. The three areas that qualify include mental health, dental health, and primary medical care.
How to get started with NHSC SLRP
To get started with this program, you’ll want to check your eligibility and then apply for the NHSC SLRP program online. If you have any questions about the program, you can call the National Health Service Corps directly at 1-800-221-9393.
If you’re looking for 501(c)(3) student loan forgiveness or student loan forgiveness nonprofit options, check out these various programs. Federal student loan borrowers can take advantage of perks working at a tax-exempt organization.
Get started with 501(c)(3) student loan forgiveness
Doing your research to see which program you’d get the most value from, based on your eligibility, can help you chip away (or completely eliminate) your student loan debt. Rewarding work doesn’t have to be such a burden with student loans if you can pursue these programs. Unfortunately, many of these options come from the federal government and education department, which means private student loans don't qualify.
Not sure what to do with your student loans?
Take our 11 question quiz to get a personalized recommendation for 2024 on whether you should pursue PSLF, Biden’s New IDR plan, or refinancing (including the one lender we think could give you the best rate).
Hello Melanie!
Thank you for that info. I would like to know if I can be a founder of a 501(c)3 instead of being an employee to one?
It’s too difficult to do to be worth it but yes it’s possible.
Is all this information true for Parent plus loans if the parent works for the government?
Yes but it’s more complex to get it in that case
I am a physician assistant and currently work at a nonprofit/FQHC. If I work 30hrs at any nonprofit, but not as a PA can I still qualify for PSLF? Example: I take a private PA job, maybe working part time and then also work part time for a nonprofit but not as PA.
As long as you’re working at least 30 hours a week for a qualifying employer, you’re eligible for PSLF.
If I am not a paid employee but I am a 30-40 hour a week volunteer at a non profit, am I still eligible for the student loan forgiveness?
PSLF requires you to be an employee of an eligible company.
My daughter just graduated and was hired by a non-profit hospital as a new PA. I have undergraduate parent plus loans and she has grad school loans. Can we refinance and combine these loans for repayment under the NHSC SLRP program?
Hi Damian, this blog may be a great read for you. One of the questions ask at the bottom page is similar to yours. If you were to refinance to a private student loan, this appears to qualify for the NHSC SLRP porogram. For more information: https://nhsc.hrsa.gov/sites/default/files/NHSC/loan-repayment/lrp-application-guidance.pdf.
I make very little income but have worked for years for a nonprofit social agency as a social worker. I have officially qualified for IDR repayment plan for three years and have been told due to my low income I do not have to make monthly payments. But the interest on my $30,000 loan is still accumulating. I love my job so will probably continue to work with the disabled even with low pay. Does three years of being qualified for IDR with no payments count toward the 120 payments. Should I keep asking for the yearly IDR and just let the interest rack up or is there a better way to handle this. I doubt I will ever make much money working as a social worker.
Hi Julie, if you’re interested in PSLF, here’s our 40 tips to be aware of. With the PSLF waiver being limited until October 31, 2022, we’re encouraging people to apply to PSLF if they believe they may be eligible.
I am lvn working for non profit facility with elderly people, can I apply for student loan forgiveness? I work for this facilily almost 40 years
Hi Isabel, you would have to look into each of the forgiveness programs’ eligibility requirements. Here’s another read on 40 Tips for the Public Service Loan Forgiveness program.