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Public Service Loan Forgiveness Program Now Includes Clergy

Since July 2021, clergy have qualified for Public Service Loan Forgiveness (PSLF) through an amendment to the program.

Full-time employees of religious not-for-profit organizations now may qualify, under some circumstances, to have their loans forgiven after 10 years. For a limited time only, you may receive credit for past student loan repayments that would otherwise not qualify for PSLF. If you apply for a waiver by October 31, 2022, all payments towards Direct Loans made after October 1, 2007, may count towards PSLF.

The PSLF was designed to remove the burden of student debt for those working in the public interest.

 There are five qualifications for PSLF:

  1. Work for a qualifying employer. Not-for-profit organizations such as a church, religious school or camp, or seminaries became qualifying employers as of July 2021.
  2. Work full-time for the organization. You must meet your employers’ definition of full-time or work at least 30 hours per week, whichever is greater. Hours from multiple qualifying employers may be combined.
  3. Have federal student loans through the Direct Loan program. A waiver gives borrowers who have loans through other federal programs until October 31, 2022, to consolidate those loans into the Direct Loan program. All payments towards Direct Loans made after October 1, 2007, may count towards PSLF. Other federal loans, like the Federal Family Education Loan Program and Perkins Loans, may qualify too, if you consolidate them to receive credit towards loan forgiveness before October 31, 2022.
  4. Have repaid your loans though a qualifying monthly payment plan while you were working full-time for a qualifying employer. These are generally income-based plans rather than “standard” or “graduated” payment plans.
  5. Have made 120 qualifying payments. Even though there was a payment waiver in effect during the pandemic March 2020 through January 2022, these months count toward the 120 qualifying payments even if borrower did not make any payments.

It takes 10 years to become eligible for PSLF because borrowers must make 120 qualifying monthly payments before applying. Borrowers must be working for a qualifying employer at the time of application and when the remaining balance of their loan is forgiven.

If you think you are eligible for PSLF, the Department of Education (DOE) suggests that you apply. The DOE will use the application to determine if your student loan payments qualify for PSLF. If you work or worked for more than one employer during the 10-year repayment period, you will need to prove that each employer meets program guidelines.

The PSLF has the potential to greatly reduce the student debt burden for those working within religious organizations. Determining whether you qualify for PSLF and completing the application process can be cumbersome. The Department of Education Federal Student Aid website  provides resources to assist with the process:  the Public Service Loan Forgiveness (PSLF) Help Tool, Public Service Loan Forgiveness Form or the application,  the PSLF Limited Waiver Information and the Public Service Loan Forgiveness Program FAQ .

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