Hi Heather!

I’ve been looking into whether the Dept. of Education would consider my workplace as a qualifying employer.  The definitions are quite vague.  I work for a trade association (which is technically a not for profit) that does have a foundation and does provide financial literacy education and resources to students.  We have also held financial reality fairs to teach students the reality of debt and expenses in schools and at our annual convention, as well as held retirement fairs to get people on track to retire comfortably.  We’ve purchased resources and made them available to our membership to do the same and we regularly report these initiatives.  Because of the work done in schools and with students, would we be considered a private non-profit that is not a 501c3 that provides public education or other school based service?  We’ve also tried to work with the legislature to pass a law requiring financial literacy as a part of our state’s school curriculum requirements.  It is obviously not the only service we provide with and for our membership, but we do have a department that is dedicated to these education initiatives.  I called the Dept. of Education and the gentlemen on the phone said it is really only for teachers and nurses - jobs like that.  He then asked me what my job was, which is regulatory affairs, and he told me I wouldn’t qualify anyway with my specific job title. I thought that was strange because I was under the impression that anyone who works for a qualifying employer would be able to apply to for the PSLF program.  I just want to be sure we could check the right box under the private non-profit organization services. 

Thanks!

One more thing - we are a trade association for an industry that is considered not for profit.  They are not 501c3 organizations, but they are exempt from federal income taxes.

Good question. Heather may have a better idea, but here’s my initial thought. The regulations, at 34 C.F.R 685.219, say an employer qualifies if they are a private nonprofit that provides one of a number of services, including “public education.” Only “labor unions” or “partisan political organizations” are excluded. I don’t see any language that would exclude a “trade association,” unless some other exclusion applies.

I also don’t see the definition of “public education” in the regulations, but the employer certification form says public education “includes services that provide educational enrichment or support directly to students or their families in a school or school-like setting.” That doesn’t necessarily mean the employer is a school and you are a teacher, in my view. It means your employer provides education-related services to students or their families.

Additionally, the person on the phone is incorrect to say you would be excluded based on job title - the regulations don’t say that. The regulations say PSLF applies based on the services provided by your employer. It doesn’t say anything about the services provided by the “borrower.”

There are some gray areas here. But don’t take the word of someone on the phone. Just send in the employer certification form and see what they say. Heather may have other thoughts.

Agree with Joe 100%. The phone rep told you the wrong information. (don’t call the dept of ed…call fedloan servicing who would be making that determination, preferably speak to a manager). You can be a janitor at a school and still have your payments qualify.

In regards as to whether your organization will count, that is up to Fedloan Servicing. Your HR dept will have to fill out your form and check that you were full time and worked at a place that provided education to students, and any other checkboxes that may apply. Where it gets tricky is if your foundation is treated as a separate entity. If your organization provides these services directly, I think you can qualify. Some organizations create foundations to do these services, and the foundations consider themselves as a separate entity, and therefore you’d have to work for the foundation in order to qualify.

You can call Fedloan Servicing and they can let you know if your organization is already in their database of qualifying organizations. If not, it may still possibly count, but you won’t know until you turn in your form and get them to approve it.

Thanks, Joe & Heather!  I think the distinction between our foundation and the trade association is a little tricky as well.  The foundation was created as a way to pool resources to allow our small asset size members have access to grants to conduct their own financial literacy education initiatives.  Within our organization, we consider the foundation an extension of the association more than as a separate entity.  It is staffed by association employees and managed by the association. 

Other than the foundation, our association has put on interactive learning opportunities for students and adults.  We’ve also put together curriculum for teens and young adults on career opportunities.  There are plenty of avenues to show how the association outside of the foundation has provided ‘public education’.  Some interesting pieces of information I ran across was found on the Dept. of Education’s official blog.  They have several posts talking about how financial literacy education is crucial - which makes up the largest part of our education programs.  I guess it’s a gamble at this point.  The language in the federal register seems to be in our favor, but until the paperwork is turned in, it is hard to tell what they might do.

There’s a debate raging about whether or not a “trade association” meets the definition of a “qualifying employer.” Just recently FedLoan Servicing sent letters to employees of the American Bar Association informing them that they did not qualify for PSLF. Obviously, this caused quite an uproar (and in my personal opinion, is an incorrect determination). The ABA tried to resolve the problem with FedLoan Servicing unsuccessfully and so went over their heads and sent a letter directly to the Department of Education. I uploaded the letter to my site and linked to it in my article below.

The best advice is to follow the above recommendations to send in the certification form and see what type of response you get, although note that in at least one case FedLoan Servicing apparently certified an employer as qualifying for several years and then later reversed the qualification and applied it retroactively! I can’t imagine that will stand up on further scrutiny, but it seems to be where we are right now.

If you want to read more, including links to the other articles and letter, I did a write up here:

http://www.biglawinvestor.com/pslf-borrowers-denied-student-loan-forgiveness/

Thanks for the update Biglaw Investor… that is truly disturbing news. If they continue this trend, what happens if individuals get their loans forgiven, and then 5 years later they come back and say “actually, we thought you qualified for forgiveness, but really did not because we determined your workplace wasn’t qualifying. Therefore we are reversing the forgiveness retroactively and you are responsible for the 5 years of accumulated interest…”

Fedloan Servicing has been absolutely awful in resolving problems. What should take 15 minutes takes a year….

I am actually shocked that they removed ABA and the ACLU from the PSLF program!  And thanks for the link, BigLaw Investor.  You have some great information posted and I’m looking forward to updates on this issue.  Now that I’m seeing how FedLoan Servicing is currently behaving, I’m a little worried.  I will be sending in my paperwork soon with about 70 pages of information to demonstrate our commitment to financial literacy initiatives, skilled trades curriculum, etc.  I was hoping that since the official Dept of Ed blog has promoted the importance of financial literacy that it would help my case, but it appears that FedLoan Servicing may not care.  If you look in the Federal Register, it doesn’t exclude us, so how is FedLoan Servicing making these determinations?

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