Janice Lozano
Volunteering is a great way to gain experience and give back to the community, and it can also help pay off student loans. There are various programs and opportunities that offer student loan repayment assistance or forgiveness in exchange for volunteer work. These include the Peace Corps, AmeriCorps, and the Shared Harvest Foundation, each with its own requirements and benefits. While volunteering may not be the fastest way to pay off student loans, it can provide a valuable opportunity to gain experience and receive financial assistance for education. This introduction provides an overview of the topic, highlighting the key aspects to be discussed, including eligibility, types of volunteer work, and the impact on student loan repayment.
| Characteristics | Values |
|---|---|
| Volunteer Programs | AmeriCorps, Peace Corps, Shared Harvest Foundation, Connecticut Student Loan Reimbursement Program, SponsorChange, Shared Harvest Fund, HEROES Act |
| Requirements | Full-time service (1,700 hours), completion of term, eligible federal loans, income eligibility, graduation from a Connecticut college or university, specific professional fields |
| Benefits | Student loan forgiveness, loan repayment, loan postponement or forbearance, Segal AmeriCorps Education Award, lump-sum payments, grants, career opportunities, income-driven repayment plans, interest coverage |
| Limitations | Partial loan cancellation, limited grants and awards, potential accrual of interest, not a smooth or guaranteed path to debt relief, requirements may vary across organizations |
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What You'll Learn
AmeriCorps and the Peace Corps
AmeriCorps
AmeriCorps is a national service program where members work in intensive service positions suited to their skills, interests, or location preferences. Members gain real-life educational and work experiences while helping to move communities forward across the country.
AmeriCorps members can receive the Segal AmeriCorps Education Award, which can be put toward their student loans or further education. The award amount is equivalent to the maximum Federal Pell Grant for the year (up to $6,095 in 2019). Any interest accrued during the service period is also paid. However, the award and paid interest are considered taxable income.
AmeriCorps members are eligible for postponement or forbearance of loan repayment during their service. They can also apply for an economic hardship deferment or forbearance, but they must commit to using their transition payment or the Segal AmeriCorps Education Award to make a lump-sum payment on their Direct Loans within six months of receiving it.
Peace Corps
The Peace Corps is a volunteer program that sends individuals abroad to respond to critical needs and support local communities. Peace Corps volunteers are eligible for PSLF after serving full-time for 120 months (10 years) of qualifying payments. Volunteers can also take advantage of benefits such as deferment, partial cancellation, and income-driven repayment plans.
Both AmeriCorps and the Peace Corps offer partial Perkins Loan cancellation for eligible volunteers. Volunteers may receive 15% off for each of their first and second years and 20% for the third and fourth years, totaling up to 70% loan cancellation.
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Connecticut Student Loan Reimbursement Program
The Connecticut Student Loan Reimbursement Program offers student loan reimbursements of up to $5,000 per year for up to four years, with a $20,000 cap, to eligible residents who volunteer with a qualifying Connecticut organisation. The program's mission is to provide financial relief to Connecticut volunteers with student debt. To be eligible, residents must have graduated from a Connecticut college or university and meet the income eligibility requirements. For single applicants, the Connecticut adjusted gross income should not be more than $125,000, while for married applicants, it should not exceed $175,000.
The program is a $6 million initiative aimed at providing financial relief to Connecticut residents burdened with student loan debt. Applicants will be awarded on a first-come, first-served basis. The Connecticut General Assembly adopted the program in 2024, allocating Federal American Rescue Plan funds for education and human services purposes. The program is currently funded through December 2026.
Volunteering with organisations such as AmeriCorps and the Peace Corps can also help pay off student loans. AmeriCorps offers the Segal Education Award, which can be put toward student loans or further education. Volunteers can receive a maximum of two awards while volunteering to help pay off student loans. The amount of the award is equivalent to the maximum Federal Pell Grant for the year ($6,095 in 2019). Any interest accrued during the service period is also paid. AmeriCorps members may also qualify for postponement or forbearance of loan repayment during their service.
The Peace Corps is also a PSLF-eligible employer, and volunteers can receive partial Perkins Loan cancellation. Volunteers may receive 15% off for each of their first and second years and 20% for their third and fourth years, for a possible total of 70% loan cancellation.
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Shared Harvest Foundation
The Shared Harvest Foundation is a 501(c)(3) social enterprise that mobilizes and trains a culturally responsive, community-based workforce to provide disaster relief, care coordination, and frontline support for organizations serving vulnerable populations. The foundation believes that financial security is key to sustainable service and aims to eliminate debt as a barrier to service.
Through its Student Loan Debt Relief (SLDR) program, Shared Harvest provides loan repayment support to skilled volunteers and frontline care workers who serve their communities, especially during emergencies. Volunteers can earn reward points through their projects, which usually require no more than four to eight hours per month, and these points translate to $150 to $500 in loan repayment. The foundation also offers fiscal sponsorship to organizations doing impact work and needing a supportive partner.
The Shared Harvest Foundation's current focus is on wildfire disaster relief work in Altadena, California, through the DENA Forward Alliance. Other volunteer engagements are paused, but interested applicants are advised to look for updates in Fall 2025.
In addition to its SLDR program, Shared Harvest also produced a documentary short, "I Am Not Your Hero," highlighting the challenges faced by Black women physicians working against structural racism and promoting overall health and well-being in the workforce. The film has been screened at various film festivals and medical institutions across the nation.
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Income-driven repayment plans
Volunteering is a great way to gain experience and give back to society, but it may not be the fastest way to pay off student loans. One way to manage student loan debt while volunteering is to apply for an income-driven repayment plan. These plans offer flexibility and can help borrowers avoid deferment or forbearance, which can lead to accrued interest and a larger balance over time.
The U.S. Department of Education's Office of Federal Student Aid (FSA) offers income-driven repayment plans, which include the Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR) plans. These plans are based on income and the amount of debt, with monthly payments potentially being as low as $0 for volunteers. Borrowers can apply for these plans through the updated IDR application on StudentAid.gov/idr.
The PAYE repayment plan generally offers the lowest payment options. However, it's important to note that while volunteering, loans may accrue more interest over time, so it's essential to carefully consider the terms of each plan. Additionally, borrowers planning to pursue public service may be eligible for Public Service Loan Forgiveness (PSLF).
Volunteers can also explore organizations like SponsorChange and the Shared Harvest Fund, which provide small amounts of debt relief while gaining valuable experience. These organizations offer direct payments to the volunteer's loan servicer upon project completion, ranging from $250 to $1,000. Furthermore, volunteers can earn $50 in student loan relief for each organization they refer.
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PSLF-eligible volunteer work
Volunteering can be a great way to serve your community and gain valuable experience. It can also be a way to help pay off your student loans, especially if you plan to work in public service and qualify for Public Service Loan Forgiveness (PSLF).
To qualify for PSLF, you must work full-time for a nonprofit or government employer. In most cases, volunteer work does not count toward PSLF because you are not classified as an employee. However, there are a few exceptions. The Department of Education considers volunteer work with specific organizations, such as AmeriCorps and the Peace Corps, as the equivalent of public service under PSLF requirements.
AmeriCorps offers the Segal AmeriCorps Education Award, which can be used toward student loans or further education. This award is given after 12 months of full-time service (1,700 hours) and is equivalent to the maximum Federal Pell Grant for the year. Additionally, any interest accrued during the service period is also paid.
The Peace Corps is also a qualifying employer for PSLF. Volunteers with federal Perkins Loans may receive up to 70% loan cancellation through tier-based rates: 15% for each of the first two years and 20% for the third and fourth years of service.
It is important to note that while volunteering can help with student loan repayment, it may not be the fastest or most efficient way to pay off your loans. Volunteering with organizations like AmeriCorps and the Peace Corps can provide valuable experience and partial loan forgiveness, but it may be necessary to pair this with other eligible work to meet PSLF's employment requirements. Additionally, volunteers often face the challenge of affording student loan payments while serving, so it is recommended to explore income-driven repayment plans during your service period.
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Frequently asked questions
There are several programs that offer student loan repayment or forgiveness in exchange for volunteer work. AmeriCorps, for example, offers the Segal AmeriCorps Education Award, which can be put toward student loans. The Peace Corps also offers loan forgiveness for volunteers. Additionally, some states and organizations offer specific loan forgiveness programs for volunteers in certain fields, such as healthcare or education.
The requirements vary depending on the program. Some programs require a minimum number of hours or months of service, while others may have specific eligibility criteria based on your field of study or income. It's important to carefully review the requirements and eligibility conditions for each program before applying.
The amount of loan repayment or forgiveness varies by program. For example, the Segal AmeriCorps Education Award is equivalent to the maximum Federal Pell Grant for the year, which was $6,095 in 2019. The Peace Corps may offer partial loan forgiveness of up to 70% for eligible volunteers. Other programs may offer a set amount per project or organization referred, ranging from $125 to $1,000.
