Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government and many lenders. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.
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Each year, about 75,000 Americans participate in AmeriCorps and serve at nonprofits, schools and public agencies across the U.S. Along with the satisfaction of strengthening their communities, these volunteers receive financial help with their student loans or tuition costs. While there’s no AmeriCorps student loan forgiveness, the Segal AmeriCorps Education award of $6,345 can be used to pay off federal student debt.
If you’re considering a public service career, read on to find out more about AmeriCorps and student loans. We’ll try to answer the following questions:
- How can AmeriCorps help repay student loans?
- What can you use AmeriCorps education awards for?
- What AmeriCorps programs are available?
- What’s it like to serve in AmeriCorps jobs?
- What should you know before signing up?
Working with AmeriCorps is not an easy assignment: It’s an immense sacrifice that requires dedication and perseverance. But if you can handle the demands of the service year, there are benefits to completing your term.
If you successfully complete a term of service, you will receive an AmeriCorps stipend in the form of the Segal AmeriCorps Education Award. The education award is tied to the maximum amount of the federal Pell Grant, so the exact value can change from year to year.
So, how much is the AmeriCorps education award? As of 2020, the federal Pell Grant (and thus, the AmeriCorps education award) is worth $6,345.
AmeriCorps members can earn up to two education awards for their service. Besides the AmeriCorps education award, full-time AmeriCorps members get a modest living allowance and health insurance.
In addition, AmeriCorps members are eligible for student loan forbearance. This means you can postpone your student loan payments while you serve. Although this can provide some financial relief, keep in mind that your loans still accrue interest during a period of forbearance.
If you have already graduated from school, you can use the Segal AmeriCorps education award to pay for federal student loans or student loans offered by a state agency. All federal loans, except for parent PLUS loans, are eligible. Unfortunately, you cannot use the funds to repay private loans.
For those currently in school or attending school in the future, you can use your education award to pay your tuition at an eligible college. Eligible institutions participate in the U.S. Department of Education’s Title IV student aid programs, which include most post-secondary colleges and technical schools.
You can also use the education award to pay for school expenses, such as those related to the cost of attendance, including books, supplies and room and board.
After completing your service term, you have seven years to use your education award. However, in extenuating circumstances, that period can be extended.
Unlike many other scholarships, the education award is considered taxable as income by the federal government. So whether you use it to repay student loans or pay for current college expenses, it will be subject to federal tax.
To receive the education award, you must fully complete your term of service. If you drop out of AmeriCorps before completion, you are ineligible to receive the award.
AmeriCorps members can serve in full- or part-time positions for terms of three to 12 months. While the AmeriCorps salary is small, those who participate contribute in a meaningful way to the benefit of their community.
Many AmeriCorps members are students taking a gap year — the year between graduating high school and attending college — but that is not a necessity. Though specific requirements vary by assignment, AmeriCorps members can usually be any age as long as they are over 18 (some programs accept 16- and 17-year-olds).
There are three different programs within AmeriCorps: AmeriCorps State and National, AmeriCorps VISTA, and AmeriCorps NCCC.
- AmeriCorps State and National provides local services directly to the community, working closely with established nonprofits and public agencies who know the neighborhoods and the needs of the people who live there. Members can serve during times of disaster, such as after a hurricane, helping a community access emergency services.
- AmeriCorps VISTA (Volunteers in Service to America) focuses on fighting poverty. VISTA members work with one agency or nonprofit on a specific program, providing support so the organization can increase its capacity and help more people.
- Finally, AmeriCorps NCCC (National Civilian Community Corps) members complete service projects in designated regions, such as building housing for low-income residents. NCCC members travel throughout the region completing their projects, and in some paths, work directly with the Federal Emergency Management Agency in times of crisis.
Taylor Vickery of Orlando, Fla., worked with AmeriCorps VISTA for 22 months. When she first applied, she wasn’t really sure what AmeriCorps was, but has since fallen in love with the program and the impact it has made on the local community.
“The first year, I was a volunteer coordinator with a local high school,” Vickery said. “I helped the school completely transform their volunteer process.”
“The second year, I served as a reading initiatives coordinator focused on helping four-year-olds,” she added. “I went into the community to find volunteers to read with a preschool student for 30 minutes once a week.”
Vickery said she felt a strong calling towards public service, and she found that AmeriCorps helped her fulfill that passion.
“Military life was never for me, but AmeriCorps [allows] me to serve my country in a meaningful way,” said Vickery. “I am able to be part of a federal government program that lifts people out of poverty.”
And because of her service, Vickery noted that she could benefit from a four-year degree without worrying about student loan debt.
“When I graduated with my bachelor’s degree, many of my classmates had crippling fear of student loans,” said Vickery. “Thanks to AmeriCorps, I do not have that fear.”
“I did receive the education award for two years of service, which will pay off my student loans,” she added. “It’s an amazing feeling to graduate and not have to worry about how I’ll pay off debt on a nonprofit salary.”
While Vickery loved her time with AmeriCorps, she does caution that it is a challenging and trying experience.
“Know that AmeriCorps is a sacrifice,” advised Vickery. “You will have to budget because you are paid so little. There will be days where all you want to do is quit. But nothing beats the rewards you will feel when you finish your year of service. Even if you can’t see it at first, you are making a difference in people’s lives.”
If you are interested in AmeriCorps jobs, you can find out more and apply via the AmeriCorps site.
Rebecca Safier contributed to this article.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.99% – 6.65%1||Undergrad & Graduate|
|1.99% – 7.10%2||Undergrad & Graduate|
|2.99% – 6.44%3||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 6.43%4||Undergrad & Graduate|
|3.18% – 6.07%5||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 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 June 23, 2020. Information and rates are subject to change without notice.
2 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Splash Financial loans are available through arrangements with lending partners. Your loan application will be submitted to the lending partner and be evaluated at their sole discretion. For loans where a credit union is the lender, or a purchaser of the loan, in order to refinance your loans, you will need to become a credit union member.
The Splash Student Loan Refinance Program is not offered or endorsed by any college or university. Neither Splash Financial nor the lending partner are affiliated with or endorse any college or university listed on this website.
You should review the benefits of your federal student loan; it may offer specific benefits that a private refinance/consolidation loan may not offer. If you work in the public sector, are in the military or taking advantage of a federal department of relief program, such as income based repayment or public service forgiveness, you may not want to refinance, as these benefits do not transfer to private refinance/consolidation loans.
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 May 1, 2020.
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan).
Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. 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.
3 Important Disclosures for SoFi.
4 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 3.19% APR (with Auto Pay) to 6.43% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.43% 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 June 15, 2020, 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.
The information provided on this page is updated as of 6/15/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
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 0.19% effective June 10, 2020.