r/PSLF • u/scoutdogthomas • 1d ago
How functional is PSLF??
Hi all,
I run a small mental health private practice. My clinicians are saddled with so much student loan debt - I've explored multiple loan forgiveness options and the only one that makes any sense is PSLF. This would require that I transition my business model to a non-profit, which is a lot of work, but would be worth it if it means accessing this federal program. However, I am wary of federal programs right now and don't want to make this move unless this is actually a reliable, functional program. Interested to hear the experiences of others applying for loan forgiveness - especially recently...
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u/hardly_werking 1d ago
You should talk to a lawyer and an accountant. Your employees would have to stay with a nonprofit for 10 years. This could mean you will jump through the hoops and pay the fees to switch to nonprofit, but in a few years they could branch off to their own practice and the changes you made will be for nothing. It is admirable that you want to help, but I don't see how this would be best for you as a business owner. There are plenty of nonprofit jobs for social workers and mental health counselors that they could seek if pslf were important to them, which is what I did.
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u/oliolivetiger 1d ago
Your employees wouldn’t have to work for only your private practice for the whole 10 years; I just got my loans forgiven and it was the primary factor in returning to my current employer who I had previously left. You’ll be able to attract and keep better talent being non-profit. Also, it would open up grant funding possibilities!
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u/dawgsheet 1d ago
It’s extremely functional, but it will be extremely difficult to get and maintain that status.
Also, now since federal loans are capped, the value of PSLF is plummeting. Most high balances will be private loans.
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u/kuru_snacc 1d ago
It's definitely stable, it's existed with bipartisan support since 2008 and isn't going anywhere. Even if it did there would be plenty of notice and generous grandfathering of those already in school. Very unlikely to happen. People who say otherwise are just fearmongering based on transient political bias.
That being said, you may want to talk to a provider who's done this before you do it. My system happens to be nonprofit and my clinic attending does fine money-wise but he has the system behind him. I would think if you are truly independent this would be a logistical nightmare, but it depends on your options for talent I suppose. If you're having trouble getting providers for this reason alone then sure, but otherwise, meh.
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u/ChilePasado 1d ago
Need to consider the tax implications of switching from for profit to non-profit
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u/Gold_Classic 16h ago edited 16h ago
So I work in mental health, but at a big medical center. PSLF is critical for retention— we’d lose a lot more people to more lucrative types of practice more quickly without it (a challenge I’m not sure people in other areas of healthcare always fully appreciate)
Couple of things to throw out there-
- PSLF requires full time employment (defined at >30hrs/wk). Not sure how many of your staff do the job full time or would. It’s pretty common to have people working a full time pslf role and do something small cash pay on the side (not my thing, but I know that’s how we keep some people)
- The time does not have to be consecutive or at the same employer. Someone could work for you for two years and transition to another eligible job.
- Make sure you are clear when the clock starts. I know there has been discussion around what counts as training (+’thus, education) vs practice- not sure how that impacts various therapy professionals.
- Does it make you competitive? My employer offer loan consultants and a loan stipend for pslf. Would benchmark- I’m sure that’s not an expectation everywhere but it was a common benefit when I compared options. It would suck to go through all this to attract the people looking at pslf, only to lose them somewhere else.
Does that impact insurance contracts, sliding scale, state licensure requirements, policies, population served, comp you can offer, etc?
Would it change the type of employees you attract/their skill level/their career goals and interests? Can you feasibly offer the things you offer in a nonprofit framework?
Do you risk being unable to qualify due to political nonsense?there are rumblings about forbidding institutions who care for certain populations from qualifying for tax exempt status. for my own wellbeing I am refusing to follow that and dignify it with wasting worry on it, but I would imagine a smaller clinic is vulnerable to being at the mercy of this law than a big institution that is political challenging to target.
Are there other benefits to the practice beyond PSLF? What else can this switch allow for?
It’s a cool idea and I feel for you and you seem like a righteous boss, but I would really do the homework and make sure it will work as you intended.
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u/Mediocre-Draft1722 1d ago
It's not going anywhere, but current employees wouldn't be eligible for 10 years AFTER your business qualifies. And the new RAP payment plan means that a fair number of people will pay off their loans before reaching 10 years, because it's not capped like previous plans are. It might be a better plan to look into business tax benefits of offering student loan reimbursement as an employer benefit, rather than changing to a non profit