May clergy qualify for Public Service Loan Forgiveness?

• The statue establishing Public Service Loan Forgiveness specifies that employment for a 501(c)(3) organization qualifies.  Churches have status as 501(c)(3) organizations.
• The regulations governing administration of Public Service Loan Forgiveness assert that a 501(c)(3) organization is not a qualifying employer if it is engaged in religious activities, unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing.

The Department of Education confirms this interpretation of the law:

• The Public Service Loan Forgiveness Employment Certification Form confirms that “[f]or purposes of the full-time requirement, your qualifying employment at a 501(c)(3) organization or a not-for-profit organization does not include time spent participating in religious instruction, worship services, or any form of proselytizing.”
• The Department of Education’s Common Questions regarding Public Service Loan Forgiveness (numbers 54, 55, 74, and 75) confirm that employment by an organization that engages in religious activities may qualify, depending on how much of a borrower’s time is spent engaged in religious activities and that when an authorized official signs the Employment Certification form, the official is certifying that the number of hours worked do not include any of the activities above.

What should clergy do? Forgiveness is not automatic and the details matter. 

1.  Get clear on the details of Public Service Loan Forgiveness. 
2.  Consider keeping track of how you spend your time at work so that you will be prepared to provide documentation if you are ever asked for it. 
3.  File the Employment Certification Form each year.

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