Public Service Loan Forgiveness: Help Employees Achieve Their Financial Goals

Public Service Loan Forgiveness: Help Employees Achieve Their Financial Goals

by Julie Burrell | September 17, 2024

The Public Service Loan Forgiveness (PSLF) program can offer significant financial relief to higher ed employees, but many don’t know they qualify for this benefit. PSLF is open to most full-time higher ed employees of nonprofit colleges and universities who have direct federal student loans.

HR can spread the word to current employees and use loan forgiveness as part of a retention and recruitment strategy. The average amount of individual loan forgiveness under the PSLF is $70,000, which makes the PSLF an especially attractive benefit to potential employees.

Here’s what you need to know about who qualifies for PSLF, how to offer a free webinar on PSLF to your employees, and what steps you can take to ensure eligible employees enroll.

What is PSLF?

Public Service Loan Forgiveness forgives the balance of direct federal student loans after 120 qualifying payments made by the borrower if they work for a qualifying employer (after October 1, 2007) and are under a qualifying repayment plan. It’s intended to reward and incentivize public service, like teaching, nonprofit work and work in the public sector. PSLF eligibility isn’t about what job an employee does or what their job description is; it’s about where they work.

Who qualifies for PSLF?

Full-time employees of a nonprofit organization or a federal, state, tribal, or local government are eligible. Full-time work is defined as 30 hours or more per week. That means most full-time higher ed employees are eligible for PSLF, including those who may work part time at your institution but are also employed at other qualifying jobs (as is the case with many adjuncts). But the PSLF only applies to direct federal student loans. Borrowers with other federal student loans may be able to consolidate them into a direct federal student loan.

How do I ensure my institution counts as an eligible employer?

Use the PSLF Help Tool, which will search the federal employer database. The help tool is also useful to recommend to employees since it’s a step-by-step guide through the enrollment process.

Six Tips for Getting the Word Out

  1. Partner with Public Service Promise, a nonprofit, nonpartisan organization that offers free webinars led by experts.
  2. Encourage HR staff to apply for PSLF. With firsthand experience, you and your team will be able to speak knowledgeably about the process.
  3. Publicize PSLF as a benefit to your employees, especially those who may not know they can take advantage of this program, including adjuncts and non-exempt and part-time employees.
  4. Include information about PSLF on your benefits websites or portal.
  5. Consider appointing a knowledgeable point person on campus, like a financial aid officer, to help answer employee questions.
  6. Involve non-exempt, adjunct and part-time employees in outreach campaigns. Employees can meet the 30 hours per week requirement with more than one job. So if they have multiple jobs at multiple qualifying employers, employees can add those hours up. And the PSLF instructions include how to calculate hours worked by adjunct faculty. Payments do not need to be consecutive, so even adjuncts without summer appointments can still take advantage of PSLF and start to chip away at the 120 payments.



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