Nonprofit employees have a little over two months to take advantage of the temporary Public Service Loan Forgiveness (PSLF) waiver. This temporary waiver makes it possible for many nonprofit workers to receive credit for past periods of repayment that would otherwise not qualify for the PSLF program, thereby reducing or potentially eliminating student loan debt.  

The PSLF program forgives the balance of most federal student loans after ten years working for charitable nonprofits and governments. Many nonprofit workers with student debt may not be aware of the benefits of the PSLF program or realize that the temporary waiver can provide immediate forgiveness for some borrowers. So far, borrowers from North Carolina have been approved for more than $246 million in student loan forgiveness under the waiver.

Here are three things your nonprofit can (and should) do today to help ensure that your eligible employees take advantage of the temporary PSLF wavier:

1. Remind your employees about the temporary PSLF waiver and the October 31 deadline in any upcoming staff meetings or communications with your employees. You can share the U.S. Department of Education’s free resources about the waiver (note that the website has had some delays recently due to the high level of interest in the waiver).
2. Make it easier for your employees to apply for the waiver by ensuring they know your nonprofit’s employer identification number (EIN) and the contact information for the person on your staff to direct PSLF forms and related questions.
3. Encourage your employees to check out The Institute of Student Loan Advisors (TISLA), a nonprofit with free information about PSLF, how you might qualify, and all things student loans.

On Wednesday, President Joe Biden announced a plan to cancel a significant portion of student debt for millions of Americans. The U.S. Department of Education will cancel up to $20,000 of student debt for many Pell grant recipients and up to $10,000 of student debt for many other borrowers. To qualify for this student debt relief, borrowers must have incomes of $125,000 or less per year for individuals or $250,000 per year for married couples. The Department of Education plans to release more details about the process for obtaining debt cancellation in the next few weeks. This debt cancellation program should help reduce financial burdens on many nonprofit employees and many North Carolinians who receive services from nonprofits.

Last Friday, the NC Supreme Court issued a ruling that found that two state constitutional amendments from 2018 – a requirement that voters show photo IDs at polling places and a lowering of the maximum allowable state income tax rate from 10% to 7% – may be invalid. In North Carolina, state constitutional amendments can only go on the ballot if 60% of the members of both the NC Senate and the NC House of Representatives approve them. Once they are approved by a supermajority of legislators, amendments then must get a majority of votes in a statewide election to be added to the NC Constitution. 

Last Friday’s court ruling found that legislative votes on the amendments in 2018 may have been invalid because they were made by legislators from unlawful districts which were later struck down by federal courts. The case will now go back to a trial court for further hearings to determine whether the constitutional amendments will remain in place.

The Center opposed both of the amendments because of concerns that they might harm nonprofits and people served by nonprofits. The Center was concerned that the 7% cap on income tax rates could eliminate tax policy options for future legislators, possibility necessitating new taxes on nonprofits or cuts to state funding of nonprofits in the future. The Center was concerned that the voter ID requirement would make it harder for many people who receive services from nonprofits – particularly seniors and people with disabilities – to vote, potentially diminishing their voices.

Voter ID laws are currently not in place in North Carolina due to other court rulings, and the current state individual and corporate income tax rates are well below the 7% cap. Thus, even if courts ultimately strike down the two constitutional amendments, there will be no immediate change to either voting or tax policy in North Carolina. Nonetheless, the removal of the amendments from the state constitution could alleviate future harm to nonprofits and the people they serve.

National Voter Registration Day (September 20) is less than a month away. This nationwide celebration of democracy is a great opportunity for nonprofits to ensure that their staff, volunteers, and community members are registered to vote. Sign up to join the nationwide effort to register hundreds of thousands of voters on September 20. As an official partner, your nonprofit will receive a free voter registration kit and access to opportunities and resources to support your nonpartisan voter registration work.

The Center provides Nonprofit Policy Update each week as a benefit to its nonprofit members. However, to help all North Carolina nonprofits respond to the COVID-19 pandemic, we're temporarily providing this newsletter to non-member nonprofits. Don’t miss out – become a member to ensure you continue receiving these updates along with many other valuable benefits.