Federal Student Loan Forgiveness Loophole?
05-18-2011, 02:45 PM
#1
Federal Student Loan Forgiveness Loophole?
Was talking to a co-worker after-hours and heard an interesting story. Apparently, you can get your federal student loans forgiven if you work for a non-profit organization for 10 years.
That in itself sounded weird, so I looked it up. I guess it's real: http://www.ncnonprofits.org/advocacy...orgiveness.asp
The interesting part that was told to me is that he is an employee of a non-profit organization. His own. He set up an org, got 501(c)3 approval and runs it himself with his wife. He's also an employee. He says he has 5 more years and his loans will be cancelled out.
This is definitely in the realm of "too good to be true" and "you scamming bastard". However, I certainly don't know enough to argue the point, not that I even care to argue. If it's a legal loophole, I guess it's legal.
Thoughts or input?
That in itself sounded weird, so I looked it up. I guess it's real: http://www.ncnonprofits.org/advocacy...orgiveness.asp
The interesting part that was told to me is that he is an employee of a non-profit organization. His own. He set up an org, got 501(c)3 approval and runs it himself with his wife. He's also an employee. He says he has 5 more years and his loans will be cancelled out.
This is definitely in the realm of "too good to be true" and "you scamming bastard". However, I certainly don't know enough to argue the point, not that I even care to argue. If it's a legal loophole, I guess it's legal.
Thoughts or input?
05-18-2011, 03:34 PM
#2
Team Owner
As long as he is doing the 501(c)3 full-time he is fine. He also has to be current on the loan. Seeing that you work with him (full-time?) his employment at the 501(c)3 may be scrutinized. I wouldn't want to be in the room during the audit 
From the horse's mouth http://studentaid.ed.gov/students/at...givenessv4.pdf
From the horse's mouth http://studentaid.ed.gov/students/at...givenessv4.pdf
Last edited by doopstr; 05-18-2011 at 03:39 PM.
05-18-2011, 03:56 PM
#4
Team Owner
It's an X-rayed truck full of illegals.
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07-12-2011, 03:49 PM
#10
Three Wheelin'
I haven't researched this, but I'm pretty sure that the same is true for federal employees (which I will be looking into). I think you have to actively pay on them for 10 years, meaning no forebarances or anything, while being employed full-time as a federal employee.
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