Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.
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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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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. Fixed loans feature repayment terms of 5 to 20 years. For example, the monthly payment for a sample $10,000 with an APR of 5.47% for a 12-year term would be $94.86. Variable loans feature repayment terms of 5 to 25 years. For example, the monthly payment for a sample $10,000 with an APR of 5.90% for a 15-year term would be $83.85.
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2 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 $9 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.
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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.
3 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 09/09/2022 student loan refinancing rates range from 4.13% APR – 7.39% Variable APR with AutoPay and 2.99% APR – 9.93% Fixed APR with AutoPay.
4 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
You can choose between fixed and variable rates. Fixed interest rates are 3.99% – 8.74% APR (3.74% – 8.49% APR with Auto Pay discount). Starting variable interest rates are 2.74% APR to 8.24% APR (2.49% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.
5 Important Disclosures for Navient.
6 Important Disclosures for SoFi.
Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 3.24% APR to 8.24% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
7 Important Disclosures for Purefy.
Purefy Student Loan Refinancing Rate and Terms Disclosure: Annual Percentage Rates (APR) ranges and examples are based on information provided to Purefy by lenders participating in Purefy’s rate comparison platform. For student loan refinancing, the participating lenders offer fixed rates ranging from 2.73% – 7.99% APR, and variable rates ranging from 1.74% – 7.99% APR. The maximum variable rate is 25.00%. Your interest rate will be based on the lender’s requirements. In most cases, lenders determine the interest rates based on your credit score, degree type and other credit and financial criteria. Only borrowers with excellent credit and meeting other lender criteria will qualify for the lowest rate available. Rates and terms are subject to change at any time without notice. Terms and conditions apply.
8 Important Disclosures for Citizens.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 3.69%-9.92% (3.69%-9.92% APR). Fixed interest rates range from 4.49%-10.11% (4.49%-10.11% APR).
Undergraduate Rate Disclosure: Variable interest rates range from 6.39%- 9.60% (6.39% – 9.60% APR). Fixed interest rates range from 6.58% – 9.79% (6.58% – 9.79% APR).
Graduate Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).
Education Refinance Loan for Parents Rate Disclosure: Variable interest rates range from 3.69%- 9.09% (3.69%- 9.09% APR). Fixed interest rates range from 4.49% – 9.28% (4.49% – 9.28% APR).
Medical Residency Refinance Loan Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).