Public Loan Forgiveness – 160B Organization

[bruingent]

I plan to join BHS in Taxes.  It is a 160B organization.  I was wondering, does a 160B Organization in Texas qualify for the public loan forgiveness program?  Thanks

[roomtempmayo]

I know just enough to be dangerous, most of it second or third hand.  Buyer beware.

I can't find anything in particular about a 160(b), which I'm guessing is a Texas thing.  As far as I can tell, Texas statute 160(b) is about selling motorboats.

More broadly:

If you're a hospital employee of a non-profit hospital, you'll likely qualify, but no guarantee until you submit the Employment Certification Form.

If you're part of a group that's for-profit contracting with a non-profit hospital, you're probably out of luck.

If you're part of a group that's non-profit contracting with any hospital, you'll likely qualify.

There are so many permutations of hospitals and groups now that unless you're a direct employee of a 501(c)3, I don't know that there's a general rule.

[Peachtea]

I’m pretty sure you’re actually referring to a 162.001(b) organization, which is type of health care org under Texas occupational code for purpose of regulation by the Texas Medical Board and not a tax code, which is what actually matters for PSLF. Granted the definition is promising since it refers to a type of non-profit health care org. Whether your employer is a 162.001(b) org doesn’t matter, short of finding out all 162.001(b) orgs are required to also be 501(c)(3)s. You’re using the wrong metric. You need to know it’s status under the US tax code, aka is it also a 501(c)(3).

Have you already accepted the position or have an offer? If so, just ask your HR contact to provide you info on whether they are a 501(c)(3) or not. If they give you the 162.001(b) info, just politely push back that for your purposes you need to know their federal tax exempt status and the specifically if they are 501(c)(3).

If they are nonprofit but not 501(c)(3), the job could still be eligible since public health is one of the “other” non-profit exemption, but it’s much riskier b/c it depends on the Dept of Ed maintaining the same def and decisions of what other non profits are eligible. If you work for any gov (fed, state, local) or a 501(c)(3) it’s guarenteed that your job is eligible. There have been incidents, well at least one notorious one, where the Dept of Ed certified a non-501(c)(3) nonprofit as eligible when a person took the precaution of asking for an advisory opinion and filling out yearly employment certs. Then years later Dept of Ed rejected the annual cert despite prior years of accepting the employer. Other than complain to the ombudsman and file internal appeals that person was SOL b/c if it’s not a gov agency or 501(c)(3) which is written into law, it comes down to their discretion. I have faith in the program in general, as I’m in it, but personally, I wouldn’t rely on their decisions re your employer unless I knew it was a 501(c)(3) that auto qualified.

[roomtempmayo]

There have been incidents, well at least one notorious one, where the Dept of Ed certified a non-501(c)(3) nonprofit as eligible when a person took the precaution of asking for an advisory opinion and filling out yearly employment certs. Then years later Dept of Ed rejected the annual cert despite prior years of accepting the employer. Other than complain to the ombudsman and file internal appeals that person was SOL b/c if it’s not a gov agency or 501(c)(3) which is written into law, it comes down to their discretion. I have faith in the program in general, as I’m in it, but personally, I wouldn’t rely on their decisions re your employer unless I knew it was a 501(c)(3) that auto qualified.

If you're referring to the ABA case, three of the four plaintiffs won in late February: https://www.nytimes.com/2019/02/23/your-money/public-service-loan-forgiveness-lawsuit.html

Three student loan borrowers scored a major victory against the Department of Education on Friday, when a federal judge laid the groundwork for a reversal of the department’s determination that their employers were not eligible for the government’s public service loan forgiveness program.

In doing so, Judge Timothy J. Kelly, of the Federal District Court for the District of Columbia, declared one of the department’s main legal arguments to be “nonsense.”

They still don't have a guarantee that they'll be eligible, but there's now federal case law that the Dept. of Ed can't suddenly change its mind about eligibility without notice.

[Peachtea]

^that was what I was referring to. I didn’t see they won the law suit. Honestly, I remember reading the original complaint and thinking they didn’t have a snowball chance in hell. I wonder if dept of Ed is appealing it. I amend my comment to for non-501(c)(3) job it’s much riskier because you might have to fight a multi year federal law suit to get your years counted. In all seriousness, I would personally  struggle, mentally, to rely on a non-bright line job for PSLF even though in general I feel like people who mind the rules these days should have minimal issues with PSLF (now that the rules are clearly laid out and it’s been streamlined through one loan servicer).