Hi Heather,

I am planning to propose to the 501(c)(3) that I am volunteering for that I become an employee, so that I am eligible for the loan forgiveness program. It is currently an almost entirely volunteer-run organization, so I have a few questions.

The rule is that I must be employed full-time. I believe that one way to do that is to be paid at 30hrs/week minimum wage. Is this right?

The other way is to follow whatever the organization’s guidelines are for a full-time employee. Can you tell me what this means? And how liberal these guidelines can be?

Also, if they are supplying room and board, could that be factored into my income? And do you know if they would be required to give me health benefits?

I have not received clear guidance on this from the Department of Education, so I am hoping you will have more information.

Many thanks!

GP

We don’t know for sure about the minimum wage thing.  The student loan law doesn’t address it, but does say you must work full-time for pay.  Minimum wage should certainly count as “pay” for student loan purposes, but an interesting question is whether a borrower could earn less than minimum wage.  My thought is that labor law issues would preclude calling someone “employed” but not paying minimum wage, although I’m hearing there may be some exceptions for nonprofit founders.  Need to do some research on those questions…

As for full-time, you have to average 30 hours per week on an annual basis OR the employer’s standard of full-time, IF it is more than 30 hours per week.

No requirement for health benefits. 

Room and board are fine, but probably won’t be seen as “pay” for purposes of the PSLF qualifying employment requirement.  As for whether they count as income, you should get professional tax advice, I’m not an expert.  I did find this on the IRS site:

You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met.

The meals are:

Furnished on the business premises of your employer, and

Furnished for the convenience of your employer.

The lodging is:

Furnished on the business premises of your employer,

Furnished for the convenience of your employer, and

A condition of your employment. (You must accept it in order to be able to properly perform your duties.)

Heather -

Regarding the 30 hour/week rule for “full-time.”  Can I assume that if I work for a non-profit for 30 hours/week, there is no other paperwork requirements? 

Specifically, Is it necessary for the non-profit to have any official policy that equates 30 hours/week as being “full-time,” or does simply having no official policy regarding “full-time” employment mean that 30 hours/week is acceptable for PSLF?

Alan

The federal regulations that govern say this:

Full-time (1) means working in qualifying
employment in one or more jobs
for the greater of—
(i)(A) An annual average of at least
30 hours per week, or
(B) For a contractual or employment
period of at least 8 months, an average
of 30 hours per week; or
(ii) Unless the qualifying employment
is with two or more employers,
the number of hours the employer considers
full-time.
(2) Vacation or leave time provided
by the employer or leave taken for a
condition that is a qualifying reason
for leave under the Family and Medical
Leave Act of 1993, 29 U.S.C. 2612(a)(1)
and (3) is not considered in determining
the average hours worked on an annual
or contract basis.

My interpretation of this definition is that if the non profit has no policy, borrowers must meet the 30 hour per week rule.