Hi Heather,

I am a public school teacher in Michigan, employed in a public charter school that is 100% taxpayer funded; however, all of the school’s employees (yes, all) and all of the finances are handled by a for-profit company. Essentially, I am a public school teacher in a public school who is paid by a for-profit company. Is there any hope that I’d qualify for PSLF, or does the for-profit “middleman” cost me the balance of my student loans? Your thoughts and expertise are greatly appreciated. 

Thanks in advance,

Kelli

Kelli,

I guess my question is how the school is legally structured.  Many nonprofits hire for profit companies to handle their finances, payroll, etc, but are still tax exempt nonprofits.  That’s what we need to hope for you and my guess is that is more likely than the alternative.  I’m having a hard time understanding how or why the school itself would actually be for profit when it is publicly funded. 

Have you tried asking the administration?  They ought to have a copy of an IRS letter regarding nonprofit status.  You could also search through the IRS here: http://www.irs.gov/Charities-&-Non-Profits/Search-for-Charities

If it is really and truly for profit, I’m afraid that’s a deal breaker.

Feel free to contact me directly for more help: .(JavaScript must be enabled to view this email address)

Good Evening,

I am in the same situation.  I was actually denied for my PSLF.  I appealed through the omsbudsman’s office and they too denied me.  My school is a public charter receiveing both Title I funding ( for low income students) as well has holds a 501c3.  After emailing with this lady from the DOE omsbudsman’s office this was her final response: 

“Under PSLF, you don’t qualify because based on the Department of Education’s eligibility requirements, you work “at” a Title I school, but you are employed by (paid by) a for profit entity.I understand your frustrations, but I truly cannot obtain your desired outcome.” 

I was in tears when I read this.  Is this the end of my PSFL dreams?  If so I am ruined.  I owe 105,000 in federal loans.  I will NEVER pay that off!

Any help you may have would be so sincerely appreciated!

Micki,

I’m so sorry to hear that you are in this situation.  The rule is clear that for profit employment isn’t qualifying employment.  Why do you work for a for-profit employer?  Must your employment be structured that way? 

BTW, IBR forgiveness is NOT tied to employment (but watch out for the taxation of forgiveness).  Loads of borrowers will be making payments on their loans all their lives.  IBR gives access to a more affordable monthly payment and although it would be great to qualify for PSLF, it isn’t unreasonable to make payments for 25 years on mortgage sized debt.  Before IBR we resigned ourselves to paying for 30-years.

Yours,
Heather