PEO Employees Eligible for Forgiveness Under PSLF

As explained by the National Council of Nonprofits, those employed by a nonprofit or government entity may be eligible for loan forgiveness, cancellation and/or consolidation under the Public Service Loan Forgiveness program. However, it was not clear whether PEO employees were covered since—although they were working at eligible entities—their employers were technically for-profit PEOs. Fortunately for them, recent guidance says they are eligible.

This change "ensures that otherwise eligible participants will not be adversely affected simply because their employer partners with a PEO," says a statement from the National Association of Professional Employer Organizations.

According to the official government Federal Student Aid site, however, it can be a little tricky for eligible employees of PEOs to claim the program benefits. The Employer Identification Numbers on applicants' Form W-2s may not match the government's list of eligible entities. In those cases, the workers should ask their employers for their actual EINs, not the EINs of the PEOs that issue the Form W-2s. More details are available on the site.