February 3, 2023Read More
Continuing our Earth Week theme, we are highlighting Stanford GSB’s encouragement of careers in social impact by its students. Stanford GSB’s loan forgiveness program reduces the financial burden of educational debt by paying a percentage of graduates’ GSB loan obligations if they make meaningful contributions to social justice, sustainability, or the health of democratic institutions.
To be eligible for the program, students must have founded or have been working at a Stanford GSB approved high-impact business with social or environmental outcomes as its core purpose that meets the following criteria:
- Pre-Series B and has a number of employees commensurate with norms of seed businesses in their industry
- Investors have provided patient, philanthropic, or sub-commercial capital without expectation of a market-rate return in the most recent fundraising round
The Financial Aid Office determines eligibility for this program on a case-by-case basis.
Eligible students (Class of 2022 and beyond) can participate in the Social Impact Loan Forgiveness Program at any point while repaying their Stanford GSB loans. Acceptance to the program in a given year does not automatically qualify the student for a future year. For founders starting a social venture, participation in the program is limited to five years per venture or until the eligibility criteria are no longer met.
Importantly, students are required to demonstrate that they would experience undue financial hardship if required to repay the loan in full themselves based on the income of the household, including spouse’s income. Stanford calculates adjusted income to determine the amount of loan forgiveness each year in the program. For adjusted incomes of $95,000 or less, the full amount of annual loan payments is covered. For adjusted incomes of more than $95,000, a prorated amount of annual loan payments is covered. Other forms of taxable income such as interest income and dividends, nontaxable income such as 403(b) and 401(k) contributions, and household asset and debt levels are also considered in determining how much of participants’ loans are forgiven.
Application Process and Required Materials
The program application and materials (separate for leaders joining impact organizations versus founders of social or environmental ventures) is completed on the Stanford Financial Aid Office portal. Applicants may be required to attend an interview. Loan forgiveness funds are processed in two disbursements. At the six-month mark of each one-year program, students are required to send renewal materials with any updates on change of income or employment.
To submit an application, students must provide a US federal tax return, proof of employment and wages, verification of loan debt, proof of childcare expenses. Founders of social impact ventures also need to include their venture cap table and additional documentation on prospective investors and supporters.