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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. For more than 50 years, the program has placed volunteers abroad to serve communities in need.
The Peace Corps and student loans don’t seem to go together in a lot of minds, though. You won’t make a lot of money in the Peace Corps, so the idea of paying off your education debt might seem even more far-fetched.
Luckily, the Peace Corps and loan forgiveness, deferment and other repayment options do jibe. The international service program carries many unique benefits that can assist federal and private loan borrowers, including…
1. Peace Corps deferment on federal loans
2. Income-driven repayment for federal loans
3. Perkins loan cancellation
4. Peace Corps Loan Forgiveness via PSLF
5. Peace Corps deferment (or forbearance) for private loans
6. Pretax volunteers award
Plus, learn about:
If you have federal student loans, you’re in luck.
By joining the Peace Corps, you may be eligible for a Peace Corps student loan deferment during your term of service for up to three years.
Suzie Talbot, who joined the Peace Corps and served in Mongolia from 2012 to 2014, told Student Loan Hero that she deferred her education debt during her term.
“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,” Talbot said.
Realize, though, that if you don’t have subsidized loans, interest will likely continue to accrue. At the end of your service, the interest (if you haven’t kept up with interest payments) will be added to your loan balance, potentially costing you more.
You can also apply for income-driven repayment (IDR), where your payments could be as low as $0 while you’re serving with the Peace Corps.
Given your “volunteer” status and small stipend, you’d likely qualify to pay nothing during the duration of your service. However, interest accrues on all loans being paid via IDR, potentially making your loans more expensive to repay.
|Tips on the Peace Corps and student loan repayment:|
|● Make sure you remain in contact with your servicer while you’re overseas, and that you recertify for any programs in which you’re participating.
● Appoint a power of attorney who can take care of the paperwork or is able to communicate on your behalf. You need to ensure that someone can act for you while you’re out of the country, perhaps living where internet and phone service can’t be counted upon.
If you have federal Perkins student 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% and 70% of your student loan balance canceled. You receive a partial cancellation of principal and interest for each 12-month stint you complete, up to four years. You may need proof of service to qualify.
|Years in the Corps||Forgiveness Amount|
|1||15%, plus interest|
|2||15%, plus interest|
|3||20%, plus interest|
|4||20%, plus interest|
Just joining the Peace Corps and serving doesn’t guarantee that you’ll receive student loan forgiveness — you can still use the stipend you receive to pay off a chunk of your student loans if you want.
Notably, service in the Peace Corps can count toward qualifying for Public Service Loan Forgiveness (PSLF). If you have student loans under the William D. Ford Federal Direct Loan program, any student loan payments you make while part of the Peace Corps count toward the 120 qualifying payments for PSLF. You can confirm your eligibility by writing to [email protected].
Make sure you have direct loans or a direct consolidation loan before you join. Then, either make your full payments or get on an IDR plan before you leave. Make your required payments, and you could get up to 27 qualifying payments during your term in the Peace Corps.
Of course, you’d need to pursue a career with a government agency or qualifying nonprofit once you’ve finished, as you’ll still need 93 more qualifying payments to receive forgiveness under PSLF.
Since working on Peace Corps missions could help you land a job in the public sector, though, you have a good chance of continuing employment designed to help you receive PSLF.
While discussing PSLF, it’s important to note that it has so far been approved for less than 1% of applicants. Take that into consideration as you look at your options.
If you’re repaying private student loans, unfortunately, you aren’t 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 most likely 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 as much of your private student loans as possible before you serve.
Current Peace Corps volunteers are awarded more than $10,000 (pretax) after serving their initial term of 24 months. This can help volunteers transition back to the States and acclimate to U.S. life. This money can be used for anything legal.
That sum could be used as a deposit for an apartment or a savings boost. However, if you’ve got rent and savings covered, it can also be a lump-sum student loan payment. This is another way the Peace Corps might help pay off student loans.
After serving in the Peace Corps, your college 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.
Additionally, review your student loan status with the StudentAid.gov to make sure your employment certifications for the last two years with the Peace Corps are recorded. This will help you if you’re working toward PSLF.
Other volunteers opt to pursue higher education after their service. According to Talbot, her Peace Corps experience helped her secure funding to pursue a degree at New York’s Brooklyn Law School.
“My Peace Corps experience helped me significantly with the transition into law school,” she said. “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.”
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 the vocation of service.
Your options include AmeriCorps, which would turn your service into student loan aid without leaving the U.S.
How much do Peace Corps volunteers get paid?
Before deciding to join the Peace Corps, it’s important to understand how much you might be paid.
While it’s not exactly volunteering — since you do get paid — the stipend isn’t that much. You receive housing and a living stipend that should allow you to live in a style similar to the local area where you serve. You might also receive more than $10,000 at the end of your service to help you adjust to post-Peace Corps life.
As you can see, Peace Corps terms mean you probably won’t earn enough to cover your student loan payments, so it’s important to understand your options.
Does the Peace Corps pay for college?
If you’re in the midst of your degree program, you might be less interested in repaying student debt and more focused on covering upcoming tuition costs. Unfortunately, the Peace Corps doesn’t directly pay its volunteers’ undergraduate costs (beyond the $10,000, pretax award upon the end of your Peace Corps term).
With that said, joining the Peace Corps could lead to financial assistance for graduate school via the Paul D. Coverdell Fellows program. It connects past Peace Corps volunteers with tuition discounts, stipends and assistantships at 90-plus colleges and universities.
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|Lender||Variable APR||Eligible Degrees|
|1.88% – 6.15%1||Undergrad & Graduate|
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|2.13% – 5.25%8||Undergrad & Graduate|
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of June 1, 2021.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.59% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance 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 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2021 Earnest LLC. All rights reserved.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
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.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for SoFi.
Fixed rates from 2.74% APR to 6.74% APR (with autopay). Variable rates from 2.25% APR to 6.39% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
6 Important Disclosures for Navient.
7 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.95% APR – 7.63% Fixed APR with AutoPay.
8 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.