Coming out of SHRM22 and after meeting many inspiring HR and benefit leaders steering their companies, one unsurprising theme remains unchanged since seeing familiar faces and friends one year ago: the HR function continues to face unprecedented challenges, ranging from a looming recession to the great resignation. And employees, oftentimes on the frontlines, are also looking for signals of light at the end of the tunnel. All sides of the benefits table are tired (exhausted, actually), and already racing into the busy season of open enrollment.
Candidly, SHRM shows that it takes a village to run an organization, and HR teams everywhere are jumping right in without hesitation. While folks are gearing up for open enrollment planning, the Summer team wanted to shed light on an area where nonprofits can make an impact today while offloading a tedious process, and we are here to help with a brief guide:
A Timely Solution
Right now, there’s one specific benefit that your organization, as a nonprofit entity, is uniquely positioned to provide, and it can’t wait until after open enrollment season.
That benefit is student loan assistance with a focus on Public Service Loan Forgiveness (PSLF). And it’s time-sensitive because the Department of Education’s Limited PSLF Waiver, a temporary expansion of PSLF requirements that is bringing more borrowers closer to forgiveness, expires this fall.
Adding a student loan solution to your suite of benefits can improve the financial wellness of your employee population and, in turn, how they perform in the workplace. This is especially pressing given that financial stress and student debt levels reached record highs in the first half of 2022. With the Limited Waiver, your organization now has an opportunity to support your employees in paying off their federal student loans during a time of great financial uncertainty.
Here’s why and how your HR team can easily help your employees take advantage of the waiver.
Limited Waiver, Big Deal
Late last year, the Department of Education announced a number of changes to its PSLF program. PSLF forgives a borrower’s entire federal loan balance after the borrower has made 120 qualifying monthly payments under a specific type of payment plan while working full-time for a qualifying nonprofit organization. Unfortunately for many borrowers, PSLF has resulted in more headaches than forgiveness, and the program has been repeatedly criticized for its confusing rules and 98% rejection rate.
Enter the Limited Waiver, one of the Department of Education’s biggest changes. Under the waiver, payments made before PSLF’s inception in 2007 — as well as payments made on various loan types and repayment plans — count towards PSLF’s 120 payments total. The Department of Education stated that over 100,000 borrowers qualified for forgiveness by early March 2022 thanks to the waiver. This is a huge improvement over the 16,000 borrowers who had received forgiveness through the program prior to the waiver.
Even for borrowers who are early in their PSLF journey, the Limited Waiver is their only chance to count past payments that were not eligible before, meaning that all employees with student debt can benefit.
But the Limited Waiver isn’t permanent: it expires on October 31, 2022. This deadline doesn’t just matter to borrowers; since nonprofits have to verify employment, employers play an integral role in helping borrowers get closer to forgiveness. Acting swiftly and adopting a student loan solution is the best way to support your employees while clearly signaling that you’re invested in their well-being.
Seizing the Moment
As a nonprofit employer, every full-time employee at your organization qualifies for PSLF. Here’s what you can do to help your employees take advantage of the waiver before it expires on October 31:
- Inform employees of the waiver. The Student Borrower Protection Center recently found that despite nine million public servants being eligible for loan forgiveness, just over 130,000 have received it since November 2020. According to the SBPC, that’s due to fewer than 15% of those public servants applying for PSLF. If any of your employees have yet to apply, they should do so immediately in order to benefit from the waiver. Which brings us to...
- Help employees apply for PSLF. As an employer, you’ll need to fill out a certification form to verify that an employee works or worked at your organization full-time; this is crucial as loan payments only count toward PSLF if they’re made while working full-time at a nonprofit. And the form needs to be filled out correctly otherwise it will be rejected. Which leads us to...
- Support employees as they navigate challenges. Remember how PSLF has an exceedingly high rejection rate? The causes for this are the program’s stringent and unclear guidelines as well as incorrect information from loan servicers. Providing assistance to employees as they deal with frustrating rejections or confusing updates is crucial.
While the thought of adding a benefit off-cycle may sound like quite the undertaking for your human resources or benefits team, it doesn’t have to be! The easiest way to do these three things for your employees is by adopting the right student loan solution. This way, experts can shepherd you and your employees through the process of submitting the necessary PSLF forms. Furthermore, a student loan solution really comes in handy when your employees need to push back against loan servicers’ misinformation about their progress towards 120 payments — which happens far too often.
Lastly, there have been a lot of changes in the student loan space since the onset of the COVID-19 pandemic, and a student loan solution can provide you and your employees with the latest updates. You can learn more about student loan benefits in our Big Book of Student Loan Assistance, which breaks down everything HR leaders need to know.
A Benefit That Goes Both Ways
Research shows how successful financial wellness benefits are at generating goodwill, attracting and retaining talent, and driving ROI for employers. And the demand is there. In a 2022 BrightPlan survey, 54% of survey respondents cited financial wellness benefits as their most desired work perk.
Financial wellness benefits come in various forms, but the timeliness and potential impact of a student loan solution make this specific benefit a particularly high-value opportunity, especially with a digital solution like Summer that offers end-to-end PSLF enrollment. Although advocates are asking the Department of Education to extend the Limited Waiver beyond October 31, no announcement has been made at this point in time. So the sooner you pick a student loan solution, the sooner you can get the expertise, technology, and support necessary to make a positive impact on your employees’ financial well-being and solve for HR objectives like talent retention and cost management.
Schedule an intro call with a Summer product specialist to learn more about what a comprehensive student loan solution can do for your organization.