If you want to make a difference in the world and immerse yourself in another culture, you may be considering signing up for the Peace Corps. The program has been around more than 50 years and places volunteers abroad to serve communities in need.
But if you’re thinking of joining the Peace Corps student loans may be holding you back. How will you be able to pay them back while working as a “volunteer”?
Luckily, the Peace Corps program has several unique benefits that can assist student loan borrowers. Here are five different ways volunteering with the Peace Corps can help you pay off your student loans.
1. Peace Corps Student Loans Deferment
If you have federal student loans, you’re in luck. By serving in the Peace Corps, you may be eligible for a Peace Corps student loans deferment during your term of service.
“My student loans were deferred during my Peace Corps term,” says Suzie Talbot. She who joined the Peace Corps and served in Mongolia from 2012 to 2014. “After filling out the deferment paperwork and providing a letter for proof of service, I didn’t have to worry about them for the following two years.”
You can also apply for an income-driven plan, where your payments could be zero dollars while you are serving with the Peace Corps. Given your “volunteer” status and a small stipend, you’d likely qualify to pay nothing during the duration of your service.
Yet, it’s important to remember that you must re-certify each year on an income-driven plan. If you’re abroad serving a two-year commitment, it’s important to stay on top of recertification deadlines. Be sure to communicate with your student loan servicer regularly.
2. Partial Loan Cancellation
If you have Perkins Loans and serve in the Peace Corps, you could be eligible for partial loan cancellation.
The amount varies depending on terms of service, but you could have between 15 to 70 percent of your student loan balance canceled. You must have an official Peace Corps representative sign your cancellation form to confirm your service.
But, if you put your Perkins Loans into a Direct Consolidation Loan, you’ll no longer be eligible for any loan cancellation through the Peace Corps.
3. Public Service Loan Forgiveness Program
Serving with the Peace Corps also makes you eligible for student loan forgiveness through the Public Service Loan Forgiveness (PSLF) program. Under the PSLF program, student loan borrowers may be able to get their Direct Loans forgiven after ten years of public service.
Most Peace Corps terms are 27 months, so you could have over two years of service count toward your ten-year public service term.
Of course, that also means pursuing a career in the public sector or in the nonprofit world after your term of service. Since working on Peace Corps mission could help you land a job in the public sector, the PSLF program is definitely a viable option for paying off your student loans.
4. Private Student Loans Deferment or Forbearance
If you have private student loans, unfortunately, you are not eligible for as many benefits as you are with federal loans.
You may be able to request a deferment or forbearance on your private student loans during your Peace Corps term of service. However, your loans will still gain interest. Each private student loan servicer is different, so ask about what options are available.
Ultimately, it’s best to put some money toward your private student loans while serving in the Peace Corps. If you’re thinking about joining the Peace Corps in a few years, focus on paying down your private student loans as much as possible before you serve.
5. Life After Peace Corps with Student Loans
Current Peace Corps volunteers are awarded $9,450 (pre-tax) after serving their initial term of 27 months. This can help volunteers transition back to the States and acclimate to U.S. life.
That sum could be used as a deposit for an apartment or a savings boost. However, if you have rent and savings covered, it can also be a lump sum payment towards your student loans.
After serving in the Peace Corps student loans will still be around. You’ll want to continue to stay in touch with your loan servicer. Be sure to update your information and stay on top of any payments required.
Other volunteers, like Talbot, opt to pursue higher education after their service. According to Talbot, her Peace Corps experience helped her secure funding for law school.
“My Peace Corps experience helped me significantly with the transition into law school,” she says. Talbot currently attends Brooklyn Law School.
“I had a minimal income to report to FAFSA and received significant scholarship and grant money, totaling the full cost of my tuition, which I don’t believe would have been possible without my Peace Corps experience,” adds Talbot.
Whether you decide to go back to school, enter into the public sector, or opt for private sector employment, joining the Peace Corps can help you get to that next stage in your life. But if you have student loan debt, review all your financial options before pursuing a life of service.
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.50% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.49% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
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3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
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Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.48% effective April 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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