Understanding the Public Service Loan Forgiveness Program

One of the most significant challenges faced by clergy in America today is the crushing burden of student loan debt. Americans owe about $1.6 trillion in student loans as of June 2024 – 42% more than what they owed a decade earlier, according to Pew Research Center.  With the cost of higher education continuously rising, many are compelled to take on substantial loans to finance their studies.

As a result, many graduates find themselves burdened with debt that can take decades to repay. This financial strain can hinder their ability to purchase homes, start families, or invest in their future. The weight of student loans can also lead to stress and anxiety, impacting one’s overall wellbeing and quality of life, distracting them from their commitment to serve others. 

Despite these struggles, programs like the Public Service Loan Forgiveness (PSLF) offer a glimmer of hope for those who dedicate their careers to public service.  The PSLF program has the potential to save clergy thousands of dollars on their student loans! 

Eligibility for Clergy

For clergy members, including those serving the United Church of Christ, eligibility for the PSLF Program can be a transformative opportunity. As long as you are employed full-time by a qualifying public service employer, such as a not-for-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code, you can benefit from this program. This inclusion ensures that those who have devoted their lives to spiritual guidance and serving their communities can obtain much-needed financial relief. 

If you have qualifying federal student loans (including Direct Subsidized, Direct Unsubsidized, Direct Grad PLUS Loans, or Direct Consolidated Loans), and make 120 qualifying monthly payments under a qualifying repayment plan while doing qualifying work for a qualifying employer, then you can submit an application to have your student loans forgiven.  You do not have to wait for 120 qualifying payments to begin the process.  In fact, submitting a PSLF form to the government is the best way to validate your progress and stay on track for PSLF.  The Pension Boards  has tools and resources to assist you. 

Pension Boards Partners with LSS Financial Choice for No-Cost Financial Counseling

Effective January 1, 2025, all Pension Boards members, their spouse and partners, and immediate family members can speak with an LSS Financial Choice counselor and receive six free financial counseling sessions each year, including receiving guidance in applying for Public Student Loan Forgiveness.  All counseling sessions are free and confidential!   LSS Financial Counselors can help you: 

• explore student loan repayment options for all student loans and your potential solutions
• determine your eligibility for federal student loan repayment programs and loan forgiveness programs
• develop a holistic approach to managing your finances and create a budget to cover monthly expenses, including student loan payments
• contact private lenders to determine student loan repayment solutions
• develop a plan to avoid default and the related consequences
• bring your student loans current if you have fallen behind on payments or are in default. 
• create an individualized action plan to help you regain control of your finances  

Start the year off right and seek financial guidance. Call LSS Financial Choice at 833-975-0719 from 9:00 a.m. to 6:00 p.m. Mon-Fri. or click here to get started.  

Testimonial

“Natalie” met with her student loan counselor multiple times. Before meeting with a counselor, she felt like PSLF (Public Student Loan Forgiveness) just never worked out for her. After looking over her situation, the counselor walked her through the steps to qualify for PSLF, and they did that process together. Natalie submitted her PSLF forms in December 2023. By April 2024, she received notice that all loans were forgiven as of February 2024. She was very excited to see all $0 balances and be done! “I really appreciate all your assistance and guidance in this complex subject and process. You really took the time and made it easier to understand.  I am forever grateful to you.”

By meeting the PSLF program's criteria, and with guidance from an LSS Financial Choice counselor, clergy can significantly reduce the financial strain of their student loan debt, allowing them to focus more fully on their vocational calling and less on the economic pressures that accompany their service-oriented careers.