Lana Oconnell
If you're considering joining the Peace Corps but are concerned about your nursing student loans, there are a few things to keep in mind. Firstly, while the Peace Corps does not directly pay your student loans, they offer various benefits and tools to help manage your loan payments during your service. These benefits vary depending on the type of loan (federal or private) and the specific loan you have. For example, Federal Direct, Federal Consolidation, and Stafford loans qualify for deferment during service, while Perkins loans may qualify for a partial cancellation benefit. Additionally, you can use up to 75% of your monthly readjustment allowance to make payments on bills, including student loans. This amount is currently $262.50 per month. It's important to contact your lender as soon as possible to discuss your options and create a plan that works for you. The Peace Corps also provides benefits like housing, a living allowance, and medical support during your service, which can help offset your overall expenses.
| Characteristics | Values |
|---|---|
| Responsibility for student loans | Volunteers are responsible for their student loans during their service. |
| Peace Corps payment of student loans | The Peace Corps does not pay for student loans during service. |
| Deferment | Volunteers may be eligible for deferment of their student loans during their service, depending on the type of loan. |
| Partial cancellation | Perkins loans may qualify for a 15% to 70% cancellation benefit. |
| Income-based repayment plans | Volunteers may be able to enroll in income-based repayment plans, which could result in $0 monthly payments during their service due to their low income. |
| Loan forgiveness | Volunteers may be eligible for loan forgiveness programs such as Public Service Loan Forgiveness (PSLF). |
| Readjustment allowance | Volunteers can use up to 75% of their readjustment allowance, currently $262.50 per month, to cover interest on student loans. |
| Power of Attorney | Volunteers may need to assign a Power of Attorney to handle loan-related matters during their service due to limited internet and phone access at certain sites. |
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What You'll Learn
Peace Corps living allowance
Volunteers in the Peace Corps are responsible for any student loans they have during their service. However, there are certain benefits available, including deferment, partial cancellation, income-driven repayment, or forgiveness. These benefits depend on the type of loan, the specific loan, and your plans after your service.
Regarding the living allowance, Peace Corps Volunteers receive a monthly living allowance during their service. This allowance varies depending on the country and the local cost of living. The allowance is intended to enable volunteers to live similarly to the people in their community. The Peace Corps arranges local banking services and covers housing costs. The allowance covers food, household supplies, communication, clothing, local transportation, and minor discretionary spending. It allows volunteers to live modestly, facilitating cultural integration and providing insight into the lives of the people they serve.
Before departure, volunteers can download and print Peace Corps service certification letters. They can also request allotments of up to 75% of their monthly readjustment allowance to pay bills during their service. These allotments are paid directly to the company the debt is owed to and only take effect after the training and swearing-in process.
Volunteers also receive a one-time settling-in allowance to help with the initial costs of acquiring necessary housing supplies, furniture, and equipment. This settling-in allowance ensures that volunteers can become self-sufficient within their new community.
In addition to the living allowance, Peace Corps Volunteers receive a readjustment allowance to prepare for life after their service. This readjustment allowance is currently $10,000 (pre-tax) for the standard 27-month term of service.
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Student loan deferment
While the Peace Corps does not pay for volunteers' student loans during their service, there are several options for managing student loans. Volunteers are still responsible for any student loans they have, but there may be benefits available, including deferment, partial cancellation, income-driven repayment, or forgiveness.
The Peace Corps recommends contacting your lender as soon as you accept your Peace Corps invitation to see what options are available to you. The benefits depend on the type of loan you have (federal or private), the specific loan you have (Perkins, Stafford, Federal Direct, Federal Direct Consolidated, etc.), and what you intend to do after service.
If you have a private loan, you need to talk to your lender to see if any loan relief options are available. Federal Direct, Federal Consolidation, and Stafford loans qualify for a deferment of up to three years during service. Federal Perkins loans qualify for deferment during service and for six months immediately after your service ends. During the period of deferment, the Department of Education pays the interest for subsidized Stafford Loans and subsidized Federal Consolidation Loans. For Perkins Loans and subsidized Federal Direct Loans, the Department of Education does not charge interest during the period of deferment.
To renew your loans for deferment, you will need to submit a new deferment application with your loan provider shortly before the deferment period expires. This application will also need a certification letter from the Peace Corps, which you can request from Peace Corps staff in-country or by emailing them.
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Loan repayment plans
Volunteers in the Peace Corps are still responsible for any student loans they have while serving. However, there are several benefits available to help manage these loans, including deferment, partial cancellation, income-driven repayment, or forgiveness. These benefits depend on the type of loan (federal or private) and the specific loan (Perkins, Stafford, Federal Direct, Federal Direct Consolidated, etc.).
Federal Direct, Federal Consolidation, and Stafford loans qualify for a deferment of up to three years during service. Federal Perkins loans qualify for deferment during service and for six months after it ends. Volunteers with qualifying federal student loans and a qualifying payment plan may have their loan payments calculated based on their income. As Peace Corps Volunteers do not make a significant income, the monthly payment during service could be $0.
Under the Public Service Loan Forgiveness (PSLF) program, the remaining amount of certain qualifying federal loans could be forgiven after 120 monthly, timely, full, scheduled payments under a qualifying repayment plan while working full-time for a qualifying employer. The Peace Corps falls under this program, and Volunteers can use up to 75% of their readjustment allowance per month to cover interest due on student loans. This amount is currently $262.50 per month.
Additionally, Volunteers can request multiple allotments of up to 75% of their monthly readjustment allowance to make payments on bills during service. These allotments are paid directly to the company that holds the debt and can be set up two months before departure or once in-country.
It is important to contact your lender as soon as you accept your Peace Corps invitation to discuss your options and determine what benefits you may be eligible for.
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Taxable income
While the Peace Corps does not pay for your nursing student loans during your service, there are several benefits and tools available for managing your student loans. Ultimately, your student loans are your responsibility, and you should contact your lender as soon as you receive your Peace Corps invitation to discuss your options.
Your readjustment allowance and a portion of your monthly in-country living allowance are considered taxable income. Two months before your departure, you will be able to download and print Peace Corps service certification letters, and you can also request certification during your service. You may request an allotment or multiple allotments of up to 75% of your monthly readjustment allowance to make payments on bills during your service. These allotments must be paid directly to the company that holds the debt and will not go into effect until you have completed training and have been sworn in as a Volunteer.
Student Loan Benefits
There are several benefits available to Peace Corps Volunteers with student loans, including:
- Deferment: Federal Direct, Federal Consolidation, and Stafford loans qualify for a deferment for up to three years during service. Federal Perkins loans qualify for deferment during service and for six months after your service ends. For private loans, you must contact your lender to see if they provide loan relief.
- Partial cancellation: Perkins loans may qualify for a 15 to 70 percent cancellation benefit.
- Income-driven repayment: Volunteers with qualifying federal student loans and a qualifying payment plan may have their loan payments calculated based on their income. Since Volunteers earn a modest living allowance, this could result in a monthly payment of $0 during service.
- Loan forgiveness: Federal Direct loans qualify for loan forgiveness through the Public Service Loan Forgiveness (PSLF) program. Under PSLF, the remaining amount of certain qualifying federal loans could be forgiven after 120 monthly, on-time, full, scheduled payments while working full-time for a qualifying employer. Volunteers are eligible for the U.S. Department of Education Public Service Loan Forgiveness Program.
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Benefits and training
Volunteers in the Peace Corps receive a range of benefits and training to help them succeed before, during, and after their service. While the Peace Corps does not pay for volunteers' student loans during their service, there are several options for managing these loans, and volunteers can benefit from loan deferment, partial cancellation, income-driven repayment, or forgiveness.
Benefits
Volunteers receive a monthly living allowance, which varies by country and is determined by factors such as the cost of living within their new community. This allowance is intended to cover the costs of food, household supplies, communication, clothing, local transportation, and minor discretionary spending. Housing costs are also covered by the Peace Corps.
Volunteers are also provided with training, medical support, and travel costs to and from their country of service. They can take advantage of benefits such as graduate school benefits, access to a Peace Corps community, and transferable skills that can help advance their careers.
Training
Volunteers serving for two years attend a training program that includes intensive pre-service training, in-service training, and a close-of-service conference. This training includes cultural and language instruction to set volunteers up for success from the start.
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Frequently asked questions
No, the Peace Corps will not pay your nursing student loans. Volunteers are responsible for any student loans they have during their service.
Yes, some loans can qualify for deferment during your service. Federal Direct, Federal Consolidation, and Stafford loans qualify for a deferment for up to three years. Federal Perkins loans also qualify for deferment during service and for six months after your service ends.
Contact your lender to see if they provide loan relief during Peace Corps service. If they do, get the options in writing.
Volunteers can use up to 75% of their readjustment allowance per month to cover interest due on student loans. This amount is currently $262.50 per month. Additionally, some federal loans qualify for loan forgiveness through a program called Public Service Loan Forgiveness (PSLF).
Contact your lender as soon as you accept your Peace Corps invitation to see what options are available to you. You should also consider the career and financial benefits that accompany Peace Corps service, which can positively impact your student loans.
