There is continuously a high need for public servants who play an essential part in the day-to-day operations of our society. These include jobs like public school teachers, police officers, public works employees and so many more vital roles. But the pay for public and nonprofit jobs is generally much lower than its private sector counterpart — which can make paying back student loans even more challenging.
Insert one solution: the Public Service Loan Forgiveness (PSLF) program.
PSLF is designed to help ease the student debt burden of public service workers. But it also serves as an incentive to encourage more borrowers to pursue careers in the public and nonprofit sector.
Here’s a list of public service loan forgiveness jobs and how to determine if you’ve worked for PSLF qualifying employers.
The PSLF program requires that you make 10 years of student loan payments while working as a public servant to have your remaining student loan balance forgiven, tax-free.
To qualify for PSLF, you must:
- Work full-time for a qualifying employer
- Have Direct Loans
- Repay your loans under an income-driven repayment (IDR) plan
- Make 120 qualifying payments
StudentAid.gov states that qualifying employers include “government organizations at any level (U.S. federal, state, local or tribal)” and “not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code”.
Additionally, time spent as a full-time AmeriCorps or Peace Corps volunteer also counts as qualifying employment toward PSLF.
PSLF qualifying employers
If you work for a government agency or a tax-exempt 501(c)(3) organization, it’s pretty clear cut — you work for a qualifying employer.
But if you work for a nonprofit that isn’t tax-exempt, you can still qualify for PSLF as long as the organization provides public services that fall into certain categories.
These public services include:
- Emergency management. This diverse field includes professions that specialize in disaster relief, local and national preparedness, and many more emergency response services.
- Military service. This includes members of the U.S. Armed Forces or the National Guard.
- Public safety. Among this group are professions like firefighters, EMTs and paramedics, correctional officers and 911 dispatchers.
- Law enforcement. Personnel involved in crime prevention, control or reduction of crime or the enforcement of criminal law may qualify.
- Public interest legal services. This includes those who provide legal services that are funded in whole or part by a local, state, federal or tribal government.
- Early childhood education. Licensed or regulated childcare, Head Start, and state-funded pre-kindergarten employers.
- Public service for individuals with disabilities and the elderly.
- Public health. This includes nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in healthcare practitioner occupations and health support occupations. It also includes counselors, social workers and other community and social service specialists.
- Public education. This includes teachers, administrators and support staff of all grade levels, regardless of position.
- Public and school library services.
- Other school-based services.
Additionally, legislation was passed in August 2020 to allow faith-based leaders to apply for PSLF.
Keep in mind the definition of “public service organization” can always be expanded in the future, as was the case with a recent PSLF lawsuit involving the American Bar Association (ABA).
In this case, several borrowers were incorrectly issued approval letters saying they qualified for the PSLF program — even though they technically didn’t because the ABA isn’t a 501(c)(3) organization, nor does it provide a qualifying public service. But in the end, the government settled the lawsuit and agreed to include the ABA as a public service organization for PSLF.
Employers that don’t qualify for PSLF
Although the PSLF program encompasses a large number of occupations, there are several types of employers that are specifically excluded from loan forgiveness.
Non-qualifying employers include:
- Labor unions
- Partisan political organizations
- For-profit businesses and organizations
The PSLF program also draws a hard line when it comes to eligibility for contractors. You must work directly for the qualifying employer, not as a contractor.
So, let’s say you work as an independent contractor providing IT services to a local government agency. You won’t qualify for PSLF because you’re not directly employed by the government even though you provide services to them.
If you’re a contractor and aren’t sure whether you’re considered an employee of a qualifying employer, look at who sends you an IRS Form W-2 at the end of each tax year. This is the employer that is used to determine your eligibility for PSLF.
How to determine if your employer meets PSLF requirements
You can determine if your employer meets PSLF requirements by using the new PSLF Help Tool. This simplified process allows you to search for a qualifying employer, learn what action you need to take to be eligible for PSLF and generate the form you’ll need to submit.
To complete the process, you’ll need your most recent W-2. Or you can use your employer’s Federal Employer Identification Number (EIN) to complete the process.
If you work for a nonprofit organization, you can use the IRS Tax Exempt Organization Search to look up your employer’s EIN number.
Search for your organization’s name, or search by city if you can’t locate your employer as its name might be listed differently with the IRS.
The PSLF Help Tool process can be completed in less than 30 minutes. But you’ll need to provide detailed information related to your employment and student loans.
Once you’ve entered the necessary information, you can generate and print your Employment Certification Form (ECF). This form needs to be signed by both you and your employer. And then it must be sent to FedLoan Servicing, which is the only loan servicer currently overseeing PSLF.
The ECF form helps verify that you work for a qualifying employer and that you’re making payments under an eligible repayment plan. Once submitted, FedLoan Servicing will confirm how many qualifying payments you’ve made.
We recommend submitting an updated ECF once a year to ensure you’re on track for PSLF. After all, loan servicers are known for dropping the ball, so it’s best to create a thorough paperwork trail.
Other occupations that qualify for federal loan forgiveness
PSLF isn’t the only road to having your loan balance erased. Other federal loan forgiveness options include:
- Teacher Loan Forgiveness. This program is for teachers who have taught full-time for five consecutive years in elementary or secondary schools or educational services that serve low-income families.
- Perkins Loan Cancellation. This program is open to a variety of professions who have remaining federal Perkins loans. Eligible occupations include (but aren’t limited to) teachers, nurses, firefighters, college faculty members, speech pathologists, librarians, law enforcement officers, public attorneys, childcare providers and more.
- Income-driven repayment (IDR) forgiveness. This option is available to federal borrowers, regardless of occupation.
It can be confusing to navigate PSLF and other loan forgiveness programs. But our team of student debt experts can review your financial situation and provide you with a customized repayment plan that factors in your financial and career goals.