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    The Peace Corps and College Loans: Everything You Need to Know

    By Gabriel Jimenez-Ekman

    Gabriel Jimenez-Ekman is a content editor and writer at Scholarships360. He has managed communications and written content for a diverse array of organizations, including a farmer’s market, a concert venue, a student farm, an environmental NGO, and a PR agency. Gabriel graduated from Kenyon College with a degree in sociology.

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    Edited by Maria Geiger

    Maria Geiger is Director of Content at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.

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    Updated: September 27th, 2023
    The Peace Corps and College Loans: Everything You Need to Know

    The Peace Corps offers many great opportunities to make positive change in the world and try out potential careers. However, they are not exactly known for their high salaries, especially since most positions are on a volunteer basis. But did you know the Peace Corps can actually help you with your student loans in other ways?

    There are a few different ways to manage your student loans while you’re in the Peace Corps. This improves accessibility and means that the Peace Corps can be an opportunity for many more college students. Read on to see if you qualify for each method!

    Peace Corps and federal loans

    Below is a list of federal loans and the potential benefits that you may receive with those loans. It will be up to you to speak with someone directly about how these benefits may apply to you. Be sure to explore all your options thoroughly in order to identify which option is best for you. 

    Loan Type Potential options

    Related: Subsidized vs unsubsidized federal loans: What you need to know

    Loan deferment 

    While serving in the Peace Corps you may have the option to defer your loans. However, while deferment may feel like a good option, it’s actually not always the most beneficial option. Depending on your loan type, you may actually end up paying more for your loans if you defer them and they accrue interest. 

    Partial loan cancelation 

    Perkins Loans are a great example of how loan cancellation may work for you. Borrowers may be eligible for a substantial level of loan cancellation through the Peace Corps. If you qualify, you will see 15% of your loans, plus interest, canceled each year for the first two years of service. If you continue to serve, you’ll see 20% of your loans, plus interest, canceled each year for the remaining two. This ends up canceling 70% of your debt!

    Make sure to check with both your loan servicer and your Peace Corps supervisor about your eligibility. If you are banking on Perkins Loan cancellation in your decision to serve, ensure it will come through.

    Income-driven repayment plans

    Income-driven repayment plans are another way to deal with your student loans while in the Peace Corps. These plans base your monthly payments based on your income. However, these are typically only available for federal loans. Check with your loan provider to see if they are an option for you. 

    If you aren’t receiving any compensation for your time in the Peace Corps, income-driven repayment plans could bring your payments close to $0. However, interest will accumulate under this plan. So, by the time you finish the Peace Corps, you’ll probably owe more than if you had deferred your loans. 

    Also see: Navigating different types of student loans

    Public service student loan forgiveness

    Okay, let’s take a minute to talk about Public Service Student Loan Forgiveness. Time spent serving in the Peace Corps also qualifies participants for public service loan forgiveness. This program forgives students’ debt after 10 years of making payments and working in public service. It has strict requirements, and is a huge commitment. 

    So, although it can be a huge opportunity, you should ensure you are ready to take it on. If you volunteer in the Peace Corps and decide you don’t enjoy public service, you won’t see any loans forgiven. You’ll have to remain on top of your service for all 10 years to qualify.

    Peace Corps opportunities to pay for graduate school

    The Peace Corps does not come with any guarantees for paying for grad school, but they do offer a scholarship for grad students who have completed their program. This is called the Paul D. Coverdell Fellows Program and it can provide up to a full scholarship for alumni who are attending grad school. You shouldn’t enter the Peace Corps banking on winning this program, but if you are an alumnus, it’s a great opportunity to look into.

    Next Steps

    Next Steps

    • If the Peace Corps is something that interests you, but you are worried about your student loans, be sure to look into all the ways the Peace Corps may be able to help you finance your loans
    • Be sure to explore every option you have in order to find the one that is the most financially beneficial to you
    • If you have private student loans and not federal, you will need to talk with your loan servicer to find out what sort of financing may be available to you while you volunteer with the Peace Corps
    • Finally, remember that the Peace Corps is not something you should count out just because you have a high amount of loans, there are lots of benefits to joining the Peace Corps that may very well make this a worthwhile experience

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    Frequently asked questions about the Peace Corps and student loans

    Does the Peace Corps pay for college?

    The Peace Corps does not assist in paying for an undergraduate education. You won’t qualify for any tuition assistance or reimbursement through the program. However, you can use your salary towards anything you want, including education expenses. Furthermore, if you are considering attending graduate school, the Peace Corps might be able to help. The Paul D. Coverdell Fellows Program helps Peace Corps volunteers pay for graduate school. If you are considering returning to school after your program, this could be a great opportunity.

    Does the Peace Corps pay well?

    Generally, the Peace Corps does not pay highly. People in the Peace Corps are considered volunteers. There is a small stipend for living expenses that varies based on the program and location. For more information about what your pay might be, consult the benefits page on the Peace Corps website.

    Does the Peace Corps pay for living expenses?

    The Peace Corps provides you with a monthly stipend. It’s with that stipend that you will be able to pay for your living expenses. This means that the Peace Corps won’t give you a stipend based on where you want to live, but rather you will likely base where you live on what the stipend can afford you.

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