My question may seem a little complex but I’ll do my best to describe it.

I am an attorney working at a for profit law firm. The law firm has a non-profit 501(c) certified organization, which is founded and funded through the law firm. The non-profit relates to family law and helping divorcing spouses complete the process without the time and expense of the court system.

Part of my contract with the for profit law firm stipulates that I work 30+ hours a week for the non-profit. My paycheck is paid by the law firm and not the non-profit. Assuming I am meeting the other requirements (timely payments, consecutive, working the required hours , etc.) do I qualify under the debt forgiveness program or does the fact my payments are made by the for profit law firm disqualify me?

Thanks for help I have been having a heck of time finding a concise answer.

You could submit the Employer Certification form with a letter explaining the situation, but this seems like a “gray area” that the law does not address. And even if they “certified” your employer, who knows what would happen in 10 years when you actually applied for the loan forgiveness (this is a question I have been asking for a year, that is, can the Dept. of Ed. renege on loan forgiveness if they previously “certify” your employer?).

Could you work with your law firm and the nonprofit, so your paycheck (or separate paycheck) reflects the fact that you are working for a nonprofit for 30+ hours per week? Otherwise, you will be in the likely situation of having to plead your case, and who knows what the outcome would be (or how long it would take). I’m a lawyer also.

Joe - 20 February 2013 05:19 PM

You could submit the Employer Certification form with a letter explaining the situation, but this seems like a “gray area” that the law does not address. And even if they “certified” your employer, who knows what would happen in 10 years when you actually applied for the loan forgiveness (this is a question I have been asking for a year, that is, can the Dept. of Ed. renege on loan forgiveness if they previously “certify” your employer?).

Could you work with your law firm and the nonprofit, so your paycheck (or separate paycheck) reflects the fact that you are working for a nonprofit for 30+ hours per week? Otherwise, you will be in the likely situation of having to plead your case, and who knows what the outcome would be (or how long it would take). I’m a lawyer also.

I received this message from Radhika Singh Miller, Senior Program Manager, Law School Relations
Equal Justice Works who specializes in this ares and she basically reiterated what you just told me:

Hi Jacob,

Thanks for clarifying. Unfortunately, while it appears this employment would otherwise qualify, you must be paid and employed) by the 501(c)(3) nonprofit for this to qualify. Since you are employed and paid by the for-profit, it will not.

You may wish to discuss with your firm the possibilities of becoming an employee of the nonprofit and receiving payment through that entity. This is a larger, more complicated discussion, however, because it will need to consider requirements of employment law, as well as the finances and situation of the nonprofit, so it may not be a possibility.

Sorry to be the bearer of bad news, and I hope this information helps. Please let me know if I can help with anything else.

So it’s looking like I have to be paid by the non-profit. Seems a little unfair given the fact I am performing the services the program requires. Guess I have to have a sit down interview with the boss!

Cooblez,

Radhika is exactly right.  During the regulatory process, the Dept of Ed decided to define qualifying employment based on the organization in which the borrower is employed, rather than on the duties of the borrower or anything else.  That means that no one (except clergy, but that’s another story) who works for a 501c3 has to prove what they do there, but for you it’s a bad thing, since your employer is the for-profit.

Best,
Heather

So if my employer switches my paychecks from the for profit to the non-profit my problem is solved correct?

Yes, you need your employer to be the c3 (and yes, your employer’s name and Federal Tax ID number can identify them as a c3 and that would be listed on your paycheck).  You’ll also want to use the Employment Certification Process to have the c3 verify that you work there full-time.