How to Apply and Manage Peace Corps Student Loans in 2024

Filed in Loan, Student Loan by on January 16, 2024

Peace Corps Student Loans: With the increasing number of college graduates carrying student loan burdens, it is important to consider how the Peace Corps Service can help you manage your loans. Get to know how you can benefit from a Peace Corps Student loan in this guide. Let’s begin!

Peace Corps Student Loans

Fortunately, there are many benefits and tools for managing your student loans during your Peace Corps service and a lot of volunteers can serve with student loans.

Peace Corps Student Loans Benefits

Volunteers are responsible for any student loans they have while serving. However, there may be benefits available to you, which include deferment, partial cancellation, income-driven repayment, or forgiveness.

Potential benefits depend on the type of loan you have. If your loan type is federal or private, the loans you will likely get are Perkins, Stafford, Federal Direct, and Federal Direct Consolidated, depending on what you want to do after service.

If you have any of the above-mentioned student loans, you may stand a chance of getting deferment, partial cancellation, income-driven repayment, or even a public loan service forgiveness during your Peace Corps service.

Volunteers with Perkins loans may be eligible for a 15 – 70 percent cancellation benefit.

If you have a private loan, you will need to contact your loan service officer to see if they provide any student loan relief for Peace Corps Volunteer service.

How to Manage Your Student Loans in Peace Corps

There are ways in which you can manage your student loans in the Peace Corps service. There are:

1. Peace Corps Student Loans Deferment

You can use this to postpone loan payments, but you should first discuss interest management with your lender. You can still be liable for interest charges, depending on the type of loan. Payments can still be made when providing service even when principal payments are postponed

2. Partial Loan Cancellation

Perkins Loans are eligible for a fifteen percent cancellation after the first year of service, Fifteen percent cancellations after the second year, twenty percent cancellation after the third year, and twenty percent cancellation after the fourth year. Partial years are not acceptable.

This could result in the loan being canceled in the range of 30% to 70%.

Volunteers who have Federal Direct, Federal Consolidation, Stafford, Perkins, or Federal Direct loans may delay their payments for up to three years while they are serving; volunteers who have Perkins loans may also be eligible for an extra six months of grace once their duty is over.

Note: Consolidating your Perkins Loans will prevent them from being canceled.

3. Public Service Loan Forgiveness Program

A Department of Education program called Public Service Loan Forgiveness (PSLF) may be of assistance to you in managing your student loans. If you intend to work full-time in public service following your Peace Corps service and you have William D. Ford Federal Direct Loans or a Direct Consolidation Loan.

A person who works full-time for certain public sector employers may be eligible for debt forgiveness under PSLF after making 120 qualifying payments on their loans throughout a period of ten years, which does not have to be consecutive. Employment eligibility is determined by serving in the Peace Corps.

4. Private Student Loans Deferment or Forbearance

If you have private student loans, unluckily, you are not eligible for as many benefits as you would be 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. But, your loans will still gain interest. Each private student loan servicer is different, so ask about what options are available.

Finally, 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 

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 become accustomed 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 huge sum payment towards your student loans.

After serving in the Peace Corps, student loans will still be available. You’ll want to continue to stay in touch with your loan service officer. Be sure to update your information and stay on top of any payments required.

To sum it up, student loan borrowers can receive significant help with their loans by volunteering with the Peace Corps. There are two excellent ways to get your loans totally forgiven or lowered by up to 70%: the Perkins Cancellation Program and the PSLF.

The ability to benefit from a $0.00 monthly payment under the income-driven repayment plans while on your mission, in addition to those two programs, helps lessen the burden of having to make student loan payments.

CSN Team.

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