For the last 20 years, college graduates have been entering the workforce with unprecedented levels of student debt, making the choice to enter and stay in the nonprofit sector an increasingly difficult one. In fact, an estimated 180,000 nonprofit employees in California alone carry student debt, and our recent survey of nearly 1,000 such employees showed that 23 percent of them have debt of $90,000 or greater.
Two comments by survey participants bring life to these statistics:
“My student loan debt … influenced what jobs I could accept after grad school—even what internships I could accept while in grad school—which then
influenced what kinds of jobs I could get afterwards."
“I am currently on parole. I served 18 years in prison, so I’m basically just starting out. I work for the same nonprofit that helped me change my life while incarcerated. I love this work, but with a large [amount of] student debt, no retirement [savings], and ... health care [costs], I’m wondering how I will ever be able to be present in this freedom I worked so hard for.”
Nonprofit staff try to balance their dedication to values-based careers with stark choices about home ownership, family, or retirement. While some portions of the nonprofit sector pay well (most notably philanthropy), subsectors like social services and youth development pay notoriously low wages while still requiring advanced degrees.
But student debt is more than just a personal issue for nonprofit staff; it's a management challenge for organizations, Nonprofits struggle to find top-quality employees who can afford to stay committed to a social change organization over the long term. Student debt also means a less diverse workforce. First-generation college graduates, people of color, and women are all more likely to have student debt and higher amounts of debt than their peers. They are also more likely to work in the nonprofit sector, which broadly enjoys a more diverse workforce than the for-profit sector.
Additionally, student debt is an economic issue for society as a whole. According to the Consumer Finance Protection Bureau, student indebtedness can spill over to other areas, “potentially limiting borrowers’ access to credit, diminishing savings, reducing homeownership, threatening retirement security, and inhibiting borrowers from pursuing careers as health care providers and educators in underserved communities."
So what can we do about this? Given the negative impact student debt has on the nonprofit workforce and beyond, remarkably few nonprofit employees and executives are aware that there are solutions. Income-based repayment plans are available to everyone, for example, and the Federal Teacher Loan Forgiveness Program offers support for teachers in low-income schools. There are also student loan forgiveness programs for people who become disabled and for loans from colleges that close. Most notable, however, is the US Public Service Loan Forgiveness (PSLF) Program. Exclusive to the nonprofit sector, the program was enacted in 2007 with the specific aim of stabilizing the nonprofit workforce; it forgives remaining balances on loans for individuals who have worked in any full-time position at any 501(c)(3) nonprofit for 10 years. Although there are eligibility requirements (for example, participants must make payments through an income-based repayment plan) and the program isn't perfect (it applies only to Federal Direct loans, not to Federal Family Education Loans, for example), it offers a powerful way for the sector to counteract the impact of student debt—and more people need to know about it, use it, and defend it now. Currently slated to relieve $108 billion in student debt, a number of conservative voices on the federal level are already calling for additional restrictions or outright elimination of PSLF, and it will likely be up for scrutiny under the Trump Administration.
If you work at a nonprofit and are still paying down student debt, learn about PSLF and begin the process of applying if you are eligible—then spread the word. If you are in management at a nonprofit or foundation, do a quick anonymous survey of your staff to find out how student debt may be affecting their lives and if they are aware of PSLF. Distribute information and help employees apply (check out our student debt toolkit, available next month). And if you are a concerned citizen who recognizes that student debt is hurting the nonprofit workforce, stay involved with legislative and policy issues affecting student debt by connecting with the Student Aid Alliance. Finally, remember that who and what we vote for will impact the future of PSLF and other student debt alleviation programs.