Understanding Public Service Loan Forgiveness Program and Process
Starting July 1, 2021, employees of religious non-profit organizations now qualify for the Public Service Loan Forgiveness Program (PSLF). That means employees of churches, religious schools and camps, seminaries, church agencies, etc. can now qualify to have their student loans forgiven. Not everyone is eligible for PSLF. Only if you make 120 qualifying monthly payments to your loans through a qualifying direct loan program under a qualifying repayment plan while doing qualifying work for a qualifying employer, then you can submit an application to have your student loans forgiven. You must be working for a qualifying employer certified by the PSLF program when you submit the application and when the loan is forgiven.
So, what does “qualifying” mean?
See https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service for detailed information about each step of the process.
Since religious non-profit organizations are new to this process, you may be struggling to verify your employer. You should know:
The PSLF Help Tool is the first step in determining if your employer qualifies for PSLF. To use this tool, you will need the employer’s Employer Identification Number (EIN) and your employment start and end date. If your employer is listed as eligible, you should proceed to the PSLF Help Tool and begin the application process.
If your employer is not listed or is flagged as likely ineligible, don’t panic! It does not necessarily mean that the employer isn’t qualified. According to the Federal Student Aid website, the PSLF database may be incomplete, and your employer may still qualify for PSLF. Go ahead and add the employer’s information manually and as accurately as possible. PSLF will manually review your submission and use it to add your employer to its database if determined eligible. Enter your employer’s name exactly as it appears on your W-2 and upload a copy of your W-2 when prompted to upload documentation to save time in its review.
If your employer is shown as ineligible, and you believe differently, don’t panic! This is based on the best information that PSLF has at the time. PSLF recommends that you go ahead and add your employer manually and upload supporting documentation explaining why you and your employer believe that it qualifies. Supporting documentation can include:
Your church’s Certificate of Inclusion letter verifying its 501(c)(3) status by inclusion in the UMC Group Tax Exemption Ruling. If you no longer serve at the church, please reach out to the church directly for its current inclusion letter.
Your employer’s articles of incorporation or other organizing documents
Your church’s listing on the annual conference website, along with this information explaining annual conferences.
Ultimately, it is important that you provide as much supporting evidence of your church’s 501(c)(3) status and your dates of employment at that church. If you are providing evidence for multiple churches you’ve served, be sure to collect all documentation and submit it all at once to speed up PSLF’s manual review process for your application.
Additionally, if you need to certify your employment for a church that is now closed, you should locate its EIN by referring to your W-2s during your employment. In this case, consider asking an authorized person from your annual conference to sign your PSLF form verifying employment for the dates you served at the now closed church. Also, consider pulling your historical file from UM Data Home. You can find this by clicking on “clergy” and searching by your first and last name. You can print that webpage to show a record of your appointments, although it might not show the current year appointment(s). Further, if you are in need of a group ruling letter for a closed church, please reach out to GCFA Legal Department at legal@gcfa.org with the church name, address, and EIN.
Submitting the PSLF Form
After you submit your application, the PSLF Program servicer, MOHELA, will review and determine your status. If you meet all the requirements listed above, including having a Direct Loan and your employer qualifications, MOHELA will determine how many qualifying payments you made toward the PSLF program during the time period(s) certified on your PSLF form. Please note, if you have served more than one qualifying employer, it will be easier if you use the online PSLF Help Tool to complete the form instead of completing it manually. This way you can add all past and current employers and your employment dates respectively on the same form.
Here are additional resources out there to help you with this process learn more about the program: