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. Most positions are on a volunteer basis. If you’re a recent college grad with student loan debt, you may be unsure if it is a financial option. Luckily, in some cases, the Peace Corps can help you suspend payments for your college loans. In other cases, you can get some of your loans forgiven through your service. This improves accessibility and means that the Peace Corps can be an opportunity for many more college students. So, although Peace Corps does not pay for college, they can help you manage your debt.
There are a few different ways to manage your student loans while you’re in the Peace Corps. Read on to see if you qualify for each method:
Peace Corps deferment for federal loans
If you have federal loans, such as Stafford loans, you can defer them for up to 3 years while you serve in the Peace Corps. This means that you will not have to make any payments, and they will not accumulate interest. When your time in the Peace Corps ends, you’ll start paying them off, as if you had just gotten out of school.
So, although you won’t be making any progress towards repaying your loans, you also won’t be burdened by them during your time in the Corps. This can work out to your advantage; if you gain career expertise during your volunteering, you may end up landing a higher-paying job upon completion. This will make it easier to pay off your loans when it comes time to start making payments.
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.
Perkins Loan cancellation through Peace Corps
Perkins Loan 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, cancelled each year for the first two years of service. If you continue to serve, you’ll see 20% of your loans, plus interest, cancelled each year for the remaining two. This ends up cancelling 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.
Aiming for 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 alumni, it’s a great opportunity to look into.
To sum it all up, the Peace Corps unfortunately does not pay for college. But there are opportunities in the Peace Corps for federal student loan borrowers. You can defer your federal loans during the duration of your service in the Peace Corps. Perkins loans recipients may even be able to get a large chunk of their loans cancelled. Additionally, if you are aiming to complete Public Student Loan Forgiveness, the Peace Corps will count towards those requirements.
If you have substantial private debt after graduation, Peace Corps may not be a feasible option for you. Those private loans typically do not qualify for deferment. You’ll be expected to repay them throughout your service, which is probably not possible on a Peace Corps salary. You can look into getting a part-time job on top of your service. But this would be stretching yourself thin financially.
So, while the Peace Corps will not pay for your college loans, there are other potential loan benefits. You can check their website for a direct listing of potential loan benefits. If you are inspired to volunteer for the Peace Corps, it’s worth looking into whether they can help make it a possibility. For students with mostly federal loans, it very well may be.
Frequently asked questions
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 program and location. For more information about what your pay might be, consult the benefits page on the Peace Corps website.