Rewarding Nonprofit Service

President Bush signed into law a measure which, among other provisions, establishes a new public service student loan forgiveness program that includes jobs at 501(c)(3) organizations as eligible public service. Under Section 401 of the College Cost Reduction Act (Pub. Law 110-84) (PDF) borrowers with federal loans (or private loans consolidated through a federal loan program) can have the remainder of their loans forgiven if they:

• have made 120 payments on their loan starting after October 1, 2007;
• were employed in a public service job while making the 120 payments; and,
• and are employed in a public service job at the time of the loan forgiveness.

Independent Sector sent a letter to the Department of Education stressing that this provision remain as Congress intended -- applying to service at all 501(c)(3) organizations -- as the department begins the process of developing rules to implement the new law.

Earlier IS sent the letter below to conferees urging inclusion of work at 501(c)(3)s as eligible public service employment.

The Honorable Edward Kennedy
Chair, Senate Committee on Health, Education, Labor, and Pensions
Russell Senate Office Building, Room 317
Constitution and Delaware Avenues, NE
Washington , DC 20510-2101

Re: College Cost Reduction Act (H.R. 2669)

Dear Chairman Kennedy:

I am writing on behalf of Independent Sector to urge you to include service at 501(c)(3) organizations in the types of “public service” or “public sector” jobs covered by the student loan forgiveness program in (Section 132 of the House version) of the College Cost Reduction Act of 2007 (H.R. 2669).

Independent Sector is a nonpartisan membership organization, organized as a 501(c)(3) public charity, that brings the nonprofit community together to make a greater difference in the lives of individuals and their communities. Our coalition of over 600 charities, foundations, and corporate philanthropy programs represent a broad cross-section of our nation’s nonprofit community, which exists to meet society’s needs, frequently in partnership with government, in diverse areas such as education, human services, community development, and health care.

The nonprofit sector’s vital partnership with the federal government was highlighted at a recent hearing of the Ways and Means Subcommittee on Oversight. In his opening statement, Chairman John Lewis (D-GA) spoke of the “special tie between charities and the government” and stressed that the government alone cannot address important needs in our communities. He concluded, “We must strengthen the nonprofit sector so that we can deliver more services to more Americans.” Ranking Member Jim Ramstad (R-MN) added, “We know our charities do extremely important work across America, and Congress should promote a vibrant charitable community.”

America ’s nonprofit community on which the federal government and the American people rely includes more than 1.5 million organizations, large and small, committed to improving lives. Its impact is a result of the talent and dedication of millions of volunteers and a workforce of 11.7 million paid employees. However, charitable organizations are facing declines in human resources. Financial and time demands have led to a decrease in the number of Americans who are able to volunteer time to charitable programs. In addition, the current generation of leaders of charities and foundations, like the rest of the baby boom generation, are expected to retire from these leadership positions over the next decade. It is estimated that the nonprofit sector will need 640,000 new senior managers (almost 2 ½ times the number currently employed) to replace those retiring.

The student loan forgiveness provision in H.R. 2669 could help alleviate this looming decline in human resources by encouraging young people to embark on careers in public service, including positions at 501(c)(3) organizations. It is important that the final version of H.R. 2669 include loan forgiveness for public sector jobs and that work at nonprofits is included in this program.

Thank you for your consideration of this important matter.

Sincerely,

Patricia Read
Senior Vice President, Public Policy and Government Affairs
Independent Sector

Last updated: December 5, 2007