As nonprofit lawyers are aware, the Department of Education (DOE) has expanded the student loan forgiveness program called Public Service Loan Forgiveness (PSLF) to include clergy members and other religious workers as of July 1, 2021. Since the inception of PSLF in 2007, DOE has excluded this class of workers, who now will enjoy the full benefits of the program.
Historically, student loan borrowers could not seek relief under PSLF if they were employed full time by churches, synagogues, or mosques. Under the previous administration, the DOE issued new regulations to include religious workers, arguing that their exclusion might violate the Establishment Clause of the U.S. Constitution.
Qualifying Payments for Student Loan Forgiveness Under PSLF
Under the PSLF for student loan forgiveness, the federal government forgives the remaining balances of federal student loan debts for borrowers who work at government or nonprofit organization jobs for ten years. To qualify, borrowers must make 120 “qualifying payments,” which must meet certain criteria. To be “qualifying,” all payments must be made:
- Toward Federal Direct Loans only
- Pursuant to an income-driven repayment plan
- For the full amount of the payment shown on the bill
- While you are employed full-time for a qualifying employer
PSLF does not cover student loan forgiveness payments made to other kinds of federal loans outside the Federal Direct Loan Program, such as the Federal Family Education Loan Program and the Federal Perkins Loan Program. PSLF also does not cover loan payments made toward private student loans, such as those through Sallie Mae. Furthermore, if you consolidate your loans, only the student loan forgiveness payments that you make toward the newly consolidated Direct loan count toward the 120 qualifying payments required for PSLF.
Generally, to qualify as a full-time employee, you must meet your employer’s definition of a “full-time” employee or work at least 30 hours per week, whichever is greater. If you work at more than one qualifying job, you still will qualify as a full-time worker if you work at least 30 hours per week. The revised DOE regulations now explicitly state that any time that individuals spend on “religious instruction, worship services, or any form of proselytizing” as part of their job responsibilities count toward the requirement that the individuals be employed full-time by the nonprofit organization.
Chronic Problems with PSLF Remain
Although the inclusion of religious workers in PSLF is welcome news, PSLF still suffers systemic problems that continue to go unaddressed. Slow application processing times, extremely low acceptance rates, and poor management are just some of the widespread problems with the program. The Biden administration has directed DOE to engage in the rule-making process to review and make needed changes to PSLF, but any real changes could be far in the future.
Call Us Today at Provident Law
Our law firm is here to provide you with legal representation tailored to your student loan forgiveness needs. Don’t hesitate to contact our offices today at (480) 388-3343 and see how we can help. We will be at your side to answer your questions and calm your concerns throughout every step of the legal process.