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Posts Tagged ‘Student Loan Forgiveness’

studentloans1President Bush signed The College Cost Reduction and Access Act (H.R. 2669) into law on Sept. 27, 2007. The Act became effective on Oct. 1, 2007.

For us working for nonprofits and cause-relaed 501(c)(3) organizations, the impact of the Act is substantial, including forgiveness of all remaining federal student loans after 120, ontime payments (10 years). A detailed explanation of the public service loan forgiveness section of the bill can be found here.

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studentloans3I teach Leadership and Change to working adults pursing graduate degrees in public administration and nonprofit management at George Mason University. They are a great group and one of the students shared the following information regarding the federal student loan debt forgiveness program for those who worked for nonprofits for ten years. You probably haven’t head about it, but you want to! The bill has just been reported out of committee and is headed to the White House. Let’s hope that the President will sign it.

This is the latest information on the forgiveness program.

H.R. 2669: The College Cost Reduction and Access Act – Courtesy of Maryland Nonprofits

On Friday Sept. 7, both houses of Congress approved a conference committee report including employees of 501(c)(3) organizations as ‘public sector’ employees for purposes of a new loan forgiveness provision. Among numerous other provisions (see below), the legislation defines employment by 501(c)(3) tax exempt organizations as a ‘public sector job’ making the individual eligible for loan balance forgiveness after 10 years of payments under an income contingent repayment plan.

Senator Barbara Mikulski was a member of the conference committee that accepted the House’s inclusion of 501(c)(3) employees, and Representative Sarbanes was a sponsor of the expanded loan forgiveness provision and inclusion of nonprofit employees, and Representative Van Hollen also co-sponsored the legislation.

In addition, Senator Cardin, and Representatives Gilchrest, Ruppersberger, Wynn, Hoyer and Cummings joined in voting for the conference report.

The nonprofit community across the country faces a serious challenge with the onset of “baby-boomer” retirements from its management and professional ranks. At the same time, costs of college and advanced education have skyrocketed, and many young people otherwise interested and committed to public service in nonprofit organizations are effectively forced to seek higher compensation elsewhere in order to repay college debt that rivals the cost of home-ownership just a decade or two ago.

At the same time, there is heightened concern among the public and in Congress itself with the effective and ethical operation of tax exempt organizations.

H.R. 2669 is described by the House Education and Labor Committee as “The largest investment in higher education since the GI Bill…”. In addition to loan forgiveness for public service, it includes:

  • Interest rate reductions on subsidized student loans,
  • Caps on required repayments based on available discretionary income,
  • Increase in Pell Grant amounts and eligibility.

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