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The Nonprofit Student Debt Project is a CalNonprofits initiative to educate nonprofit staff and employers, advocate for public policy changes, and engage our community on the problem of student debt and its impact on the nonprofit workforce -- and what we can do about it. 

Did you see our new bus ad (below) about the PSLF program?  You can download the Student Debt Toolkit for Nonprofits here.


Everyone has heard about the student debt crisis – more than 42 million people owe a total of $1.3 trillion in student debt. In California, the average debt for an individual graduating from a four-year institution is $21,382. We estimate that more than 160,000 nonprofit staff have student debt. A 2016 survey conducted by CalNonprofits confirmed that student debt is hurting recruitment, retention and diversity in the nonprofit workforce.

One important program that nonprofit employees (and those working in the public sector) should know about is the Public Service Loan Forgiveness program (PSLF). It was signed into law in 2007 by President George W Bush. Through PSLF, after a nonprofit employee makes 120 payments on a qualified repayment plan, they can qualify for loan forgiveness. 

 

Nonprofit employees:
Options for Public Service Loan Forgiveness

 
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WEBINAR: Need to understand how the Public Service Loan Forgiveness Program works? Watch our in-depth webinar where we explain the eligibility requirements and how this program can help nonprofit (and public sector) employees with their student debt.  How Nonprofit Staff Can Get Student Debt Forgiveness

Read our recent articles about student debt and what we're doing about it in the Stanford Social Innovation Review and the Nonprofit Quarterly, Part 1 and Part 2.

 

Recent California legislation on student debt

AB 461, signed by Governor Brown, exempts loan forgiveness amounts from state income tax.
Right now, when your student loans are forgiven though most debt relief programs the forgiven amount is taxed as income for that year. (Thankfully the Public Service Loan Forgiveness program does not have this problem.) This leaves borrowers with big tax bills right when the relief of forgiveness was supposed to help them out. AB 461 exempts the forgiven amounts from California state income tax -- a small expense for the state and a big burden lifted from borrowers.

AB 38, which we supported and was signed by Governor Brown, will continue the work to ensure that student loan borrowers are given reliable information, quality customer service, and meaningful access to repayment and forgiveness programs, by further regulating student loan servicers. 

SB 16, which we actively supported, would have brought the wage garnishment rate for private loans down to the same level as federal loans. Right now, banks and other private lenders can garnish up to 25% of a borrower's wages if they default on the loan, but the government can only garnish up to 15% of a borrower's wages. SB 16 would have made the private loan garnishment rate 15% to match the government rate. Unfortunately, this bill stalled, but could be taken up again in the future.

AB 379 would establish the California Kickstart My Future Loan Forgiveness Program to provide student loan forgiveness awards for the purpose of alleviating the burden of federal student loan debt for recent graduates in California. This is a wonderful idea, but because this program would require significant funding, we were not expecting it to pass. It may be considered again in the future though we suspect it will run into similar difficulties.

For more on these and other legislation that impacts California nonprofits please visit our Legislation Tracker.

What is the impact of student debt on the nonprofit workforce? CalNonprofits conducted this survey to find out!
 
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Nonprofit Student Debt Project Leadership Council

Linda Akutagawa, LEAP 
Fred Blackwell, San Francisco Foundation 
Janet Camarena, Foundation Center 
Cynthia Chavez, LeaderSpring 
Karen Coppock, TechSoup Global 
Robert Egger, LA Kitchen
Sofia Klatzker, Arts4LA
Paul Vandeventer, Community Partners 
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What is the Public Service Loan Forgiveness Program?

The federal Public Service Loan Forgiveness Program can help the nonprofit sector address the student debt crisis, but not enough people know about it.

  • Find out more here.

Student Debt Webinars

Are you a nonprofit employee with student debt?  Want to learn more about how the Public Service Loan Forgiveness Program can help?  Check out our new webinar on this topic: PSLF for Nonprofit Employees. All webinars and recordings are free to Members, including Student Members. Learn more about Membership here.

Become a member
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