Public Service Loan forgiveness program eligibility

[erg923]

I have a very straightforward question. But I have not been able get a concrete answer thus far, only vague references that seem to suggest I would indeed qualify.

I am a full-time professor (teacher) at a small (private) Catholic university. According to the vague criteria listed below, it seems like my job and employer will qualify for public service loan forgiveness? Anyone know for sure?

A federal, state, local, or Tribal government organization, agency, or entity (includes most public schools, colleges and universities);
A public child or family service agency;
A non-profit organization under section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of the Internal Revenue Code (includes most not-for-profit private schools, colleges, and universities);
A Tribal college or university; or
A private organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities (unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing) and that provides the following public services –
Emergency management;
Military service;
Public safety;
Law enforcement;
Public interest law services;
Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten);
Public service for individuals with disabilities and the elderly;
Public health (including nurses, nurse practioners, nurses in a clinical setting, and full-time professionals engaged in health care practioner occupations and health care support occupations);
Public education;
Public library services; and
School library or other school-based services.
Source(s):
http://studentaid.ed.gov/students/attach…

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[MBellows]

A private organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities (unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing) and that provides the following public services –

Is your school allowed to blatantly ignore EEOC and ADA laws and have no legal repercussions like other religious places of learning that have been on the news lately?

 

[erg923]

Is your school allowed to blatantly ignore EEOC and ADA laws and have no legal repercussions like other religious places of learning that have been on the news lately?

Um, no. It actually works tirelessly for social justice and equality, as do hundreds of other Catholic orders, sisterhoods, and institutes of higher learning throughout the world.

So...start another thread for this junk.

 

[MBellows]

No. It actually works tirelessly for social justice and equality, as do hundreds of other Catholic orders, sisterhoods, and institutes of higher learning throughout the world.

So...start another thread for this junk.

Sorry Erg. It wasn't meant as an assault against your religion or the institutions thereof. It was honestly meant as an answer to your question. If they take that trade off of legal immunity, they likely will not qualify for benefits like the PSLF program.

It's an interesting issue that highlights the variety of opinions within group umbrellas. I've also heard very great things about social justice and sisterhoods that have been more actively pushing even when some figures attempt to get in the way. As you said, better placed in a new thread and I have no interest in pushing it further.

Good luck!

 

[Pragma]

Well step 1 would be to just call and ask. It sounds like they verify your emplyoer status officially when you initially apply. It sounds on the surface like it might qualify - I had thought you might have to actually work at a public university, but perhaps not.

You also want to make sure you are using an income-based repayment plan. In other threads, discussions about how you file your taxes suggest some implications for the amount you pay monthly (e.g., filing single might be beneficial)

 

[AcronymAllergy]

Like Pragma mentioned, you definitely need to be on the income-based repayment plan. Additionally, only Direct loans are eligible for forgiveness, so if you have any of the non-Direct variety, you'll need to get them into a Direct consolidated loan.

Back to the original question, though, it certainly sounds like your university would qualify. I agree with Pragma, though, that calling is probably going to be your best bet. I've actually had good luck speaking with federal aid folks over the years, as they've generally been very helpful.

 

[erg923]

Well, my university's chief HR officer signed the government's certification form without any hesitation or delay, so apparently they are confident they would qualify. They checked the "A private organization that is not a for-profit business" with the "public education" specifier. Makes sense. They do educate the public...its just costs more than State U. 🙂

 

[AcronymAllergy]

Awesome; keep us posted how it turns out.

 

[Balmoral]

Riviving this thread instead of making a new one:

1. Will my postdoc year at a VA count?

2. I have not consolidated my loans yet (all Direct Loans), does it matter when the public service is done (e.g., I consolidate my various loans to 1 single loan, then I have to make the 120 payments for the consolidated loan to be forgiven)?

 

[erg923]

Riviving this thread instead of making a new one:

1. Will my postdoc year at a VA count?

2. I have not consolidated my loans yet (all Direct Loans), does it matter when the public service is done (e.g., I consolidate my various loans to 1 single loan, then I have to make the 120 payments for the consolidated loan to be forgiven)?

It so confusing, i don't even know where to begin. It turns out I dont have enough in loans to really make it work to my benefit, due to the IBR requirement that goes along with it. Well, sort of anwyay. Long story. Anyway, your loans have to be consolidated to all direct before your first payment will count towards that ten years.

 

[AcronymAllergy]

Riviving this thread instead of making a new one:

1. Will my postdoc year at a VA count?

2. I have not consolidated my loans yet (all Direct Loans), does it matter when the public service is done (e.g., I consolidate my various loans to 1 single loan, then I have to make the 120 payments for the consolidated loan to be forgiven)?

Yes, I believe postdoc year would count, assuming you're actually employed/paid by the VA.

And as erg said, you need to consolidate the loans first, and then begin making your 120 payments on said consolidated loans.

 

[Pragma]

Any qualifying loans with qualifying payments during that period of employment count. So if you are on IBR or ICR and making payments, it will count for all qualifying loans so long as you are employed by a qualifying organization while making the payments. If some of your loans qualify and others don't, then they look at it on a payment per loan basis (for the ones that qualify but not the others). Consolidating so that they all qualify would be recommended.

I'd consolidate the loans and get on IBR as soon as you can if you are planning to go this route. The process can take some time. They can retroactively count some of your payments, but you have to be on an eligible payment plan for anything to count. So be sure to get the payment plan set up before you turn in the employment verification form.

 

[JeyRo]

I'd be surprised if this actually works for you, erg - if your income is relatively high and your current payments are relatively low, you'll probably end up being shocked by how much you'll have to send out the door every month in order to comply with IBR.... that's what happened to me (hence, I'm not doing it).

 

[Pragma]

I'd be surprised if this actually works for you, erg - if your income is relatively high and your current payments are relatively low, you'll probably end up being shocked by how much you'll have to send out the door every month in order to comply with IBR.... that's what happened to me (hence, I'm not doing it).

Yeah, it definitely requires some number crunching. I think it works best for people who have high monthly payments anyways.

 

[Balmoral]

Thanks for clarifying. So I should start the consolidation process now since my postdoc will end in 5 months. My VA postdoc is paid so I hope this will be 1 year that will be done... 9 more to go. More reason to stay within the system.

erg: From your situation, a public teaching institution was acceptable for the PSLF? I hope to eventually get a teaching position but I assume private universities will not count.

Okay, now research on the which is better IBR vs. ICR; I assume there are numerous threads already with this discussion.

 

[AcronymAllergy]

Thanks for clarifying. So I should start the consolidation process now since my postdoc will end in 5 months. My VA postdoc is paid so I hope this will be 1 year that will be done... 9 more to go. More reason to stay within the system.

erg: From your situation, a public teaching institution was acceptable for the PSLF? I hope to eventually get a teaching position but I assume private universities will not count.

Okay, now research on the which is better IBR vs. ICR; I assume there are numerous threads already with this discussion.

I very well could be wrong, but I believe PSLF requires the IBR option. Definitely double-check me on that, though.

Also, if you haven't begun paying on the consolidated loan as of yet, then I don't believe the current year will count towards the 10 required. As Pragma mentioned, payments only count when made on qualifying loans that are on a qualifying payment plan (e.g., IBR). It's not so much the amount of time spent work in the public sector as it is the number of qualifying payments made on qualifying loans while employed in a public sector position.

 

[Pragma]

I very well could be wrong, but I believe PSLF requires the IBR option. Definitely double-check me on that, though.

Also, if you haven't begun paying on the consolidated loan as of yet, then I don't believe the current year will count towards the 10 required. As Pragma mentioned, payments only count when made on qualifying loans that are on a qualifying payment plan (e.g., IBR). It's not so much the amount of time spent work in the public sector as it is the number of qualifying payments made on qualifying loans while employed in a public sector position.

If you are not on an income based repayment plan (IBR or ICR) or paying the standard rate (which ironically is high enough such that your loans would be paid off in 10 years anyways), then no payments you have made so far count. The key is getting on IBR (which I think is better than ICR for most people in terms of the monthly payment) as soon as you can so that the payments start counting.

AA I am pretty sure ICR and that new income based option that just came out for newer loans also count.

 

[erg923]

Thanks for clarifying. So I should start the consolidation process now since my postdoc will end in 5 months. My VA postdoc is paid so I hope this will be 1 year that will be done... 9 more to go. More reason to stay within the system.

erg: From your situation, a public teaching institution was acceptable for the PSLF? I hope to eventually get a teaching position but I assume private universities will not count.

Okay, now research on the which is better IBR vs. ICR; I assume there are numerous threads already with this discussion.

No, private colleges qualify too. Our HR rep signed it and it was acceptable to "da man." But, like i said, my complications was with IBR and the payoff timeline.

 

[AcronymAllergy]

If you are not on an income based repayment plan (IBR or ICR) or paying the standard rate (which ironically is high enough such that your loans would be paid off in 10 years anyways), then no payments you have made so far count. The key is getting on IBR (which I think is better than ICR for most people in terms of the monthly payment) as soon as you can so that the payments start counting.

AA I am pretty sure ICR and that new income based option that just came out for newer loans also count.

Thanks for the correction; I might've just seen some outdated materials at some point, then.

 

[Pragma]

If you are set on the PSLF/IBR route, just keep in mind that you are always paying based on the prior year's tax return. Postdoc is actually a great time to start paying because you likely didn't make much the year before, and your first year in your real job also is good because you are paying based on your postdoc salary.

If you are married it complicates things, but a good calculation to do is how much $ you would save in loan payments by filing separately vs. losing out on a few minor tax benefits. If your spouse makes good money and you file jointly, an IBR payment can actually get quite high. But also look if filing separately will affect either of your tax brackets (which have lower thresholds for married filing separate), and be aware that if one of you itemizes, both of you must itemize.

As others have mentioned, there is also no guarantee that the program sticks around long term. There is some risk to making lower payments if you don't end up getting the PSLF payoff.

 

[Balmoral]

If your spouse makes good money and you file jointly, an IBR payment can actually get quite high.

😀 She is also one of "us" so good is a relative term. Thanks for clarifying and I will get on the ball with this.

Pragma & erg: Thanks for the feedback on this and the faculty position thread, the information has been helpful.

 

[massivestudentdebt]

I have a very straightforward question. But I have not been able get a concrete answer thus far, only vague references that seem to suggest I would indeed qualify.

I am a full-time professor (teacher) at a small (private) Catholic university. According to the vague criteria listed below, it seems like my job and employer will qualify for public service loan forgiveness? Anyone know for sure?

A federal, state, local, or Tribal government organization, agency, or entity (includes most public schools, colleges and universities);
A public child or family service agency;
A non-profit organization under section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of the Internal Revenue Code (includes most not-for-profit private schools, colleges, and universities);
A Tribal college or university; or
A private organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities (unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing) and that provides the following public services –
Emergency management;
Military service;
Public safety;
Law enforcement;
Public interest law services;
Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten);
Public service for individuals with disabilities and the elderly;
Public health (including nurses, nurse practioners, nurses in a clinical setting, and full-time professionals engaged in health care practioner occupations and health care support occupations);
Public education;
Public library services; and
School library or other school-based services.
Source(s):
http://studentaid.ed.gov/students/attach…

Hello Erg123, I see you started this thread a few years ago. So, did you find out for sure if private high schools and private colleges qualify for public student loan forgiveness under 501 c (3) section? I'm thinking about taking a position in a private catholic High School but want to make extra sure the position qualifies.

 

[Pragma]

Hello Erg123, I see you started this thread a few years ago. So, did you find out for sure if private high schools and private colleges qualify for public student loan forgiveness under 501 c (3) section? I'm thinking about taking a position in a private catholic High School but want to make extra sure the position qualifies.

Well, if you want to make "extra" sure, then you might want to call the Fedloan servicers and ask them about employment qualifications and how a private catholic high school might fit into the program, or just call the DOE. Or you could trust anonymous internet posters to make major financial decisions too 😀

 

[erg923]

Hello Erg123, I see you started this thread a few years ago. So, did you find out for sure if private high schools and private colleges qualify for public student loan forgiveness under 501 c (3) section? I'm thinking about taking a position in a private catholic High School but want to make extra sure the position qualifies.

I taught at a catholic university, and it qualified, althiugh my loans werent enough to really make it viable. But, please do your own footwork before you make a kob decision based on this.

 

[Pragma]

Thought I would bring this up - the day appears to be coming for the PSLF program, albeit it is being packaged differently as a part of the 2015 budget proposal.

http://blogs.wsj.com/washwire/2014/...oposes-broader-debt-forgiveness-for-students/

Key changes-

- Caps forgiveness at 57,5K. If you owe more, you will keep paying for another 10-15 years and then get hit with the tax bomb.
- Forces you to use household income instead of individual income for IBR

The comments section highlights a lot of interesting perspectives. If you happen to be enrolled in PSLF, notice that the budget proposal does not include any type of grandathering clause (so you may want to contact your representatives if you don't like the proposed changes).

It could get really messy for people currently enrolled, as folks have made financial and career decisions based on the program requirements and the DOE's guidance on how to maximize benefits by paying less. An interesting peripheral issue is the idea that this creates an incentive for divorce. I know a lot of physicians are up in arms about it. Some other perspectives:

http://askheatherjarvis.com/blog/wi...ervice-loan-forgiveness-impact-existing-borro

http://www.reddit.com/r/medicalschool/comments/1zo6ei/2015_obama_budget_guts_paye_and_pslf_loan/

Nothing is decided yet and the final version probably will look different. I would be surprised if they don't add a grandfathering clause for those already in the program. If they don't, there will be lawsuits from folks who's principal has increased due to being in IBR and earning a low enough income that compound interest takes over.

 

[erg923]

Is there such a thing as being "enrolled" in the program? I really just thought it was about where you worked. And then you had to proove that you worked there (HR verification?) in order to be granted forgiveness when the ten years came?

 

[Pragma]

Is there such a thing as being "enrolled" in the program? I really just thought it was about where you worked. And then you had to proove that you worked there (HR verification?) in order to be granted forgiveness when the ten years came?

Well, they encourage people to certify their employment annually, and then your loans get transferred to Fedloan if they aren't serviced there. They keep track of how many qualifying payments one has made every time you turn in an annual certification form. So in that sense, you could say you are "enrolled" because you get letters indicating that your employment qualifies and you have made qualifying payments. But you are right, the actual application for loan forgiveness doesn't happen until you are finished making the payments.

 

[OneNeuroDoctor]

Applications for this year were extended to March 24, so you still have time to apply for this years application cycle. I just completed my application and you have to work in an under served community that meets the eligibility criteria. You have to be from an APA accredited program and be fully licensed for independent practice in your State.

If you have consolidated loans it is more complicated as you need to have the dates of the original loans. You must upload electronically, loan information from both the Dept of ED and the agency servicing your loan. You have to reapply every two-years and turn in six-month reports. Once approved you are required to work two-years at your employer. Once completed the two-years, funds from $50,000 to $60,000 are transferred into your account and you must pay your student loan with this money. Fund are applied retroactively up to a year based on your initial employment date. The amount is determined by community rating HPSA score. 14 or under is 25,000 and 15 or higher is 60,000 for two-years service. There is not a cap as long as your re-qualify every two years. One of my internship supervisor went eight years to pay off $230,000.00 in his student loans.

 

[erg923]

I think you are talking about something different. This program (FED PSLF) is not specific to psych.

 

[OneNeuroDoctor]

I think you are talking about something different. This program (FED PSLF) is not specific to psych.

I am referring to NHSC. I don't know about FED PSLF.

 

[erg923]

right. And I think that should be clarified since this thread is about the feds PSLF program, not NHSC

 

[Pragma]

The proposed changes to the PSLF have huge implications for anyone who was intending to use that program. $57.5K of forgiveness after 10 years is basically nothing for most FSPS programs, given the fact that compound interest on high debt levels will only offset the "forgiveness" and students who take out 100-200K in loans will still be stuck with the principal, most likely, unless their income was high enough that they were able to put a dent in it via IBR.

It is a really big potential change that creates a lot of uncertainty for people currently making qualifying payments, and future students will need to pay close attention as it may no longer be an open-ended level of debt forgiveness, but a limited one.

 

[AcronymAllergy]

Applications for this year were extended to March 24, so you still have time to apply for this years application cycle. I just completed my application and you have to work in an under served community that meets the eligibility criteria. You have to be from an APA accredited program and be fully licensed for independent practice in your State.

If you have consolidated loans it is more complicated as you need to have the dates of the original loans. You must upload electronically, loan information from both the Dept of ED and the agency servicing your loan. You have to reapply every two-years and turn in six-month reports. Once approved you are required to work two-years at your employer. Once completed the two-years, funds from $50,000 to $60,000 are transferred into your account and you must pay your student loan with this money. Fund are applied retroactively up to a year based on your initial employment date. The amount is determined by community rating HPSA score. 14 or under is 25,000 and 15 or higher is 60,000 for two-years service. There is not a cap as long as your re-qualify every two years. One of my internship supervisor went eight years to pay off $230,000.00 in his student loans.

Not to derail the thread, since (as erg mentioned) we're primarily talking about PSLF--but I believe that for NHSC, in addition to working in a qualifying health shortage area, you also need to work for an approved employer, or possibly an employer that might be approved. Of note, the VA is explicitly excluded.

 

[AcronymAllergy]

The proposed changes to the PSLF have huge implications for anyone who was intending to use that program. $57.5K of forgiveness after 10 years is basically nothing for most FSPS programs, given the fact that compound interest on high debt levels will only offset the "forgiveness" and students who take out 100-200K in loans will still be stuck with the principal, most likely, unless their income was high enough that they were able to put a dent in it via IBR.

It is a really big potential change that creates a lot of uncertainty for people currently making qualifying payments, and future students will need to pay close attention as it may no longer be an open-ended level of debt forgiveness, but a limited one.

I also couldn't tell from my quick reading of the article, but it made it sound as though folks with >$57.5k in loans to be forgiven might not qualify for PSLF at all. Here's the wording:

The amount forgiven for public-sector workers would be capped at $57,500. Borrowers with debt loads above $57,500 would make payments for 25 years

I could interpret that two ways: 1) $57.5k is forgiven, after which you continue to pay for up to 25 years, or 2) if you have more than $57.5k to be forgiven (perhaps once you get to the 10-year point), then you don't qualify and you just keep paying for a total of 25 years.

If this goes through as proposed, I potentially foresee a LOT of angry physicians and possibly dentists in particular, and/or potentially large numbers of physicians jumping ship from federal to private sector employment.

 

[erg923]

Not to derail the thread, since (as erg mentioned) we're primarily talking about PSLF--but I believe that for NHSC, in addition to working in a qualifying health shortage area, you also need to work for an approved employer, or possibly an employer that might be approved. Of note, the VA is explicitly excluded.

But the VA does of course fit the criteria for PSLF. My VA position also came with EDRP attached to it.

 

[AcronymAllergy]

But the VA does of course fit the criteria for PSLF. My VA position also came with EDRP attached to it.

Yep, the VA is essentially the prototypical placement for PSLF.

 

[Pragma]

I also couldn't tell from my quick reading of the article, but it made it sound as though folks with >$57.5k in loans to be forgiven might not qualify for PSLF at all. Here's the wording:



I could interpret that two ways: 1) $57.5k is forgiven, after which you continue to pay for up to 25 years, or 2) if you have more than $57.5k to be forgiven (perhaps once you get to the 10-year point), then you don't qualify and you just keep paying for a total of 25 years.

If this goes through as proposed, I potentially foresee a LOT of angry physicians and possibly dentists in particular, and/or potentially large numbers of physicians jumping ship from federal to private sector employment.

Also lawyers who work in the public sector.

Just reading the comments from the WSJ article really gives you a sense for the range. It will be quite interesting to see how it develops. I recommend people call their representatives if they do not feel satisfied with the changes, as it hasn't gone through at this point.

 

[erg923]

"Rage" at the government not paying back your loans? Little much if you ask me. It was marketed as a means to get people into those sectors and on IBR though, so it does seem decepetive if they dont grandfather clause the thing.

 

[Pragma]

"Rage" at the government not paying back your loans? Little much if you ask me. It was marketed as a means to get people into those sectors and on IBR though, so it does seem decepetive if they dont grandfather clause the thing.

If they want to take the program away, that is fine, but then why start it to begin with?

I'm not an entitlement freak, but if they tell me to pay as little as possible in order to maximize my benefit, then take that benefit away, I'm the one who is worse off financially. Yes, there were no guarantees, but there was also a lot of guidance suggesting that people take particular repayment strategies (and even mandating it for participation).

 

[erg923]

Thats correct. IBR is required for qualifying for PSLF.

 

[Pragma]

Thats correct. IBR is required for qualifying for PSLF.

Just curious, what would you do if you wanted your representatives to know your opinion about a policy issue that is currently under congressional review?

I figure calling or emailing works. But apparently that means "rage"?