Five Options for Student Loan Relief: For Non-Profit and Government Employers & Staff

While student loan debt continues to dominate headlines, no action on broad student loan cancellation has been taken… nor does it look promising based on the most recent reports.

THAT said, student loan relief remains available in the marketplace, particularly for those who work in Public Service (that’s about 35 million jobs in the US). Here’s what IS happening today in terms of available loan relief:

PSLF Waiver Update

The PSLF program is available for all employees of 501c3 and Government employers. Since this program was overhauled last October, the latest report shows that 70k borrowers have received tax-free forgiveness worth nearly $5 billion. This represents year-over-year growth of roughly 10x. We don’t expect this growth to slow down with over $130 billion enrolled in the program for over 1.3 million (and growing) borrowers. If you’re a qualified employer, help your staff take advantage of this program with our analysis and support… schedule a demo with us.

Additionally, the CARES Act payment halt DOES count towards PSLF, so all those months of $0 payments can be certified with your employer to get you on track with qualified payments!

Attention All Teachers!

Teacher Loan Forgiveness now counts as qualified employment for PSLF! Up until this week’s update, borrowers had to choose between these programs. If you received Teachers Loan Forgiveness, that period of service now qualifies for PSLF if you certify that employment, which can be done via the PSLF Help Tool (use this link to begin!). Be sure to have the employer’s EIN number to proceed with the form.

Income-Driven Repayment Plan Renewals

First, borrowers enrolled in Income-Driven Repayment (IDR) plans will likely be able to avoid recertifying their income until as late as 2023. FedLoan recently guided those with an anniversary day within 6 months of 5/1, when the CARES payment halt expires, to have their recertification date pushed out 12 additional months… which leads us to our NEXT update, regarding the FedLoan exit of loan servicing later this year.

While several servicers will take over the roughly 9 million borrowers serviced by FedLoan today, only one servicer will be assigned the 1.4 million (and growing) PSLF candidates: MOHELA. Some accounts have started to transfer there; all are scheduled to be moved before year end. While the account transfer supposedly includes your full loan history, we recommend you save copies of all payment history and prior servicer letters concerning your PSLF qualifications, payment plan, and consolidation.

Poverty Guidelines to Lower IDR Payments

We’ll nerd out a little harder here with this next update: The IRS poverty levels for 2022 increased 5.5% (single) year-over-year. Why does inflation have a place in this update? We’re glad you asked! When you use an IDR plan, payments are based on discretionary income, which is reduced by a higher poverty level income. Therefore, loan payments are reduced, creating additional relief for PSLF-eligible staff.

That’s all for now folks, but remember…. ‘til DEBT do us part!

About Author

Jason DiLorenzo

Jason is the Founder of BenElevate, an early stage fintech company working to address the student debt crisis by bringing to bear tools, expertise, and bespoke solutions to streamline student debt management for borrowers and employers.