Public Service Loan Forgiveness (PSLF) can help with employee retention and recruitment by offering your staff financial relief. Likewise, your company will benefit from the lower turnovers that may otherwise cost thousands of dollars depending on your industry.
However, many employers and employees may be unaware of this free federal program. In addition, they may overlook the proper implementations and qualifications to utilize PSLF effectively.
As an employer, you must understand how to manage PSLF correctly. Knowing the rules will also help you prepare to assist your employees with this program. Here is some essential PSLF information to help you and your employees mutually benefit from this federal program.
How Does PSLF Help With Employee Retention and Recruitment?
Employers who utilize PSLF may entice staff members with the possibility of federal student loan forgiveness. The PSLF program forgives a borrower’s federal student loans if they are a full-time employee of an eligible public service organization, hence the program’s name.
As the employer, you may offer your employees assistance in receiving PSLF benefits. This strategy would let your employees know that you have the resources to help relieve them of certain financial burdens. Likewise, potential recruits would be glad to know they may become eligible for student loan forgiveness by working with you.
With more employees staying with an organization, turnover rates would decrease. If you employ teachers, PSLF may help reduce teacher turnover rates and help your district save thousands of dollars. Some experts [claim](https://www.thegraidenetwork.com/blog-all/impact-of-teacher-turnover-on-student-learning,) that teacher turnovers cost between $9,000 and $21,000, depending on the community.
What Are Eligible Public Service Organizations?
Your organization qualifies for PSLF if you are a:
- Government Organization: Includes all levels (federal, state, local, and tribal) and the U.S. military.
- Not-for-Profit Organization: Must be tax-exempt under section 501(c)(3) of the [Internal Revenue Code](https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations#:~:text=To be tax-exempt under,any private shareholder or individual.).
How Do My Employees Qualify for PSLF?
Your employee must be a full-time worker of your eligible public service organization, meaning they must work at least 30 hours a week. They may work with multiple eligible organizations and qualify for PSLF if their combined work hours meet the minimum 30 hours per week.
In addition, an employee must have made 120 qualifying payments on their Direct Loans under an income-driven repayment plan. The Federal Student Aid office provides a PSLF and Temporary Expanded PSLF (TEPSLF) Certification and Application Form to help borrowers keep track of their qualifying payments. Your organization may offer assistance with this application form.
Conclusion: Can Public Service Loan Forgiveness Help Recruit and Retain Employees?
Yes, the PSLF program can help employee retention and recruitment. This free program allows federal student loan borrowers to receive loan forgiveness by working for a qualified organization. If your organization offers assistance with the PSLF program, staff members and potential recruits will likely stay for these financial relief benefits.
Most employers may not take advantage of this program due to a lack of knowledge. Some also doubt whether it is legitimate. Understanding how this federal program works is the first step for employers and employees to benefit from PSLF. As an employer, be sure to review your organization’s qualifications for PSLF to determine whether you can utilize this tool for employee retention.