Avoid Common Student Loan Repayment Mistakes: A PSLF Guide for Nonprofit Employees

If you work for a U.S. nonprofit organization, you may qualify for Public Service Loan Forgiveness (PSLF)—a federal program that can forgive your remaining student loan balance after 120 qualifying payments.

But here’s the catch: one small mistake can delay your forgiveness by months—or even years.

From missing income recertifications to selecting the wrong repayment plan, nonprofit employees face unique challenges in managing their federal student loans. This guide will help you avoid the most common—and costly—student loan repayment mistakes so you can stay on track for PSLF.

💡 Bonus: If your employer partners with PeopleJoy, you don’t have to go it alone. We help track deadlines, manage PSLF forms, and ensure compliance every step of the way.

📌 Key Takeaways

• Missed IDR Recertification: Set reminders or let PeopleJoy track it.
• Wrong Repayment Plan: Choose PAYE, IBR, or ICR.
• Infrequent PSLF Certification: Submit annually—or let PeopleJoy handle it.
• Poor Payment Tracking: Keep records—or use PeopleJoy’s dashboard.
• Ineligible Payments: Know the rules or get guidance from PeopleJoy.

❌ Mistake #1: Missing Your Annual IDR Recertification for PSLF

Most nonprofit employees use income-driven repayment (IDR) plans such as PAYE, IBR, or ICR. These plans require you to recertify your income and family size each year. If you forget, you risk:

• Your monthly payments increasing unexpectedly
• Being moved to a standard repayment plan
• Losing PSLF credit for missed months
  

✅ What to do instead:
Set calendar reminders at least 60 days before your recertification deadline. Use the FSA IDR application tool to submit early and avoid processing delays.

With PeopleJoy: We proactively monitor your deadlines and send reminders so you never miss your recertification window.

❌ Mistake #2: Choosing the Wrong PSLF Repayment Plan

To qualify for Public Service Loan Forgiveness, you must be enrolled in a PSLF-eligible repayment plan—usually an IDR plan. Picking the wrong one can mean:

• Payments don’t count toward PSLF
• Higher interest costs over time
• Delayed loan forgiveness

✅ What to do instead:
Use the Loan Simulator at studentaid.gov to compare repayment options.
Currently, PAYE and IBR are the most common PSLF-eligible plans, while the SAVE Plan is temporarily excluded from PSLF credit during ongoing legal reviews.

❌ Mistake #3: Skipping Your Annual PSLF Employment Certification

Many borrowers wait until year ten to submit their PSLF employment verification, but this can be risky. Without annual certification:

• You might work for an ineligible employer without realizing it
• Loan servicers may miscount your qualifying payments
• You lose visibility into your PSLF progress

✅ What to do instead:
Submit the PSLF Form every year—or any time you change jobs. Use the PSLF Help Tool on studentaid.gov to generate and submit your form online.

With PeopleJoy: We automatically prepare and submit your PSLF forms, ensuring every payment and period of qualifying employment is properly recorded.

❌ Mistake #4: Not Tracking Your Qualifying PSLF Payments

Servicer errors happen. Some borrowers have been denied PSLF because of inaccurate payment counts. Without personal records, it’s hard to dispute errors.

✅ What to do instead:

• Save payment confirmations and loan summaries
• Keep copies of all PSLF Forms and certifications
• Track your payments in a spreadsheet or PSLF tracker

With PeopleJoy: Our dashboard automatically tracks your qualifying payments and PSLF progress—so you always know where you stand.

❌ Mistake #5: Not Understanding What Counts as a “Qualifying Payment”

Not all payments count toward PSLF forgiveness. To qualify, your payment must be:

• Made under a qualifying repayment plan (PAYE, IBR, ICR)
• Paid in full and on time
• Made while working full-time for a U.S. nonprofit or government employer

✅ What to do instead:
Confirm your employer’s eligibility through the PSLF Help Tool and always pay on time. Review your PSLF payment history regularly via your loan servicer’s account.

⚠️ Bonus Tip: Beware of PSLF-Ineligible Plans (Including SAVE)

The Saving on a Valuable Education (SAVE) plan, while designed to reduce payments and interest, is not currently earning PSLF credit due to court rulings.

✅ What to do instead:
Stick with PAYE, IBR, or ICR if you’re pursuing PSLF forgiveness. Log in to studentaid.gov or contact your loan servicer to confirm your plan eligibility.

💬 FAQ: What Student Loan Repayment Plans Qualify for PSLF?

• Eligible plans: PAYE, IBR, ICR
• Ineligible plans (for now): SAVE, Standard 30-Year, Graduated, Extended, any Alternate Revised Plans
• You must also be employed full-time by a U.S.-based nonprofit (501(c)(3)) or government organization

✨ Final Thoughts

Your nonprofit work makes a difference—your student loan repayment journey shouldn’t hold you back. By choosing the right plan, tracking payments, and staying compliant, you can achieve full forgiveness under PSLF.

If your organization partners with PeopleJoy, we’ll handle the details: from recertifications and form submissions to payment tracking and forgiveness eligibility monitoring.

Talk to your HR team or reach out to PeopleJoy’s PSLF experts today to see if your organization offers student loan repayment assistance.

Together, we’ll help you stay on track to forgiveness.