If you are looking to be a real-life hero and change the world through the Peace Corps program, or if you already served in the Peace Corps, you should know that your time served would qualify for loan forgiveness. While there is no actual Peace Corps Loan Forgiveness program, there are other federal programs that are available to Peace Corps volunteers which include complete loan forgiveness as well as reduced monthly student loan payments.
The most beneficial program available towards Peace corp volunteers for loan forgiveness is called the Public Service Loan Forgiveness(PSLF) program. This program offers complete student loan forgiveness for borrowers after 120 qualifying payments. To qualify for PSLF you must meet a few criteria
- Must have federal direct loans
- If you do not, your existing loans may be eligible to be consolidated and converted into direct loans
- Must work for a government entity, or a non-profit 501(c)(3), or any non-profit for qualifying positions
- The Peace Corps is run by the US Government and as such would qualify
- Must make any of the following income-driven repayments
Once all the above criteria are met, your payments on your student loans would be qualifying payments under the PSLF program.
Federal Direct Loans for Public Service Loan Forgiveness
Only federal direct loans are eligible for PSLF. If your loans are not direct loans, the US Government offers a free consolidation program which would take all of your existing federal student loans, and consolidate them into one new loan. Your new loan would then be a direct loan and thus qualify for the PSLF program. Within the direct consolidation program, you are able to choose which federal repayment plan you would like. For PSLF qualification purposes, it must be any one of the four listed above. If you are not sure what type of loans you have, you can check at studentloans.gov. You would still retain your subsidized benefits when going through a consolidation.
Repayment Plans Eligible for Public Service Loan Forgiveness
For peace corps volunteers looking to apply for public service loan forgiveness, you must choose one of the four income-driven repayment plans. These repayment plans use your discretionary income when calculating your monthly student loan payment instead of using your balance and interest rate like a normal loan. In the income-driven repayment plans, borrowers can qualify for a $0.00 monthly payment depending on their income and family size. For peace corps volunteers, this often means a $0.00 monthly payment. Even though the payment may be $0.00 per month, it is an actual payment that counts towards loan forgiveness. It is not a deferment, forbearance or grace period.
|Repayment Plan||% Of Discretionary Income||Qualifies for PSLF?||Interest Forgiveness?|
Recertifying Your Income Annually
In all of the income-driven repayment plans, it is required that you recertify your income annually. Since your payment is based upon your income, its assumed that over time your income will change, and your payment will change along with it. It’s critical to recertify your income annually, or you will be changed from an income-driven plan into a standard repayment plan. This change may greatly increase your payment and will cause your payment to become ineligible for the PSLF program. This is something borrowers must remember to do, and should not count on being reminded by anyone.
Remaining A Public Sector or Non-Profit Employee
For Peace Corp volunteers to qualify for this public service loan forgiveness, it would require that you continue to work in the public sector or for a qualifying non-profit. If you serve in the Peace Corps for 2 years and then get a job in the private sector when you return home, only your time in the Peace Corps would be eligible. The 120 payment to qualify for PSLF do not need to be consecutive, so if you work in the private sector for some time that’s ok. When you decide to go back to the public sector those payments would qualify and be combined with your previous time in the Peace Corps. Remember that if you have two separate qualifying periods, you will need to submit two PSLF forgiveness forms, each certified by both places of employment or volunteering.
Perkins Loan Cancellation For Peace Corps Volunteers
Serving in the Peace Corps would make you eligible for up to 70% of your loan to be canceled through volunteer service cancellation available for Perkins student loan borrowers. The way the program works is that for each year served in the Peace Corps (or AmeriCorps VISTA) you can have a certain percentage of your Perkins loans canceled. To apply for the cancellation an authorized official for the Peace Corps or Americorps Vista program must certify the borrowers cancellation form.
|Years of Service||% of Loan Cancelled|
If you plan to apply for the Perkins Loan Cancellation, you must not consolidate your loans. As we mentioned above, consolidating your loans will change all your loan types into direct loans, which would then be ineligible for the Perkins Loan Cancellation program.
Peace Corp Loan Forgiveness Options for Private Student Loans
There are currently no options for loan forgiveness for private student loan borrowers at this time. Private student loans are not treated the same way federal student loans are. Federal loans often have very many programs available to assist borrowers in repayment and loan forgiveness. These programs are generally not available by private lenders.
Volunteering in the Peace Corps offers student loan borrowers some benefits to really help with their loans. Both the PSLF and the Perkins Cancellation program are a great way to either get the loans forgiven completely or reduced by up to 70%. Besides those two programs, being able to take advantage of a $0.00 monthly payment in the income-driven repayment plans while on your mission helps reduce the stress of having to make student loan payments.
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College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
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.
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.
Splash Financial: 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.com
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 qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). 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 of 10 years or less. For loan terms of 10 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 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 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.
The information provided on this page is updated as of 04/23/19. 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 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.