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Programs and Scholarships to Pay Off Student Loans

Programs and Scholarships to Pay Off Student Loans

Looking for a bailout? Good news! The only catch is you'll have to do some good...

Elizabeth Hoyt

March 03, 2014

If you’re like the millions of students looking for a way out of your student loans; I’ve got good news for you. There are alternatives but, as with most things in life, there’s a tiny catch.

What’s the catch? If you’re willing to do some good for the world (gasp!) and volunteer, there are plenty of programs that will be willing to help pay off your student loans in exchange for service work.

So, if these options sound like they may options you’d be interested in pursuing, read on to learn more about the programs willing to help bail you out of student loan debt:

AmeriCorps

What is AmeriCorps?

When you become an AmeriCorps member and give your time through national service work, you’re able to gain real life educational and work experiences at the same time.

What do you do with AmeriCorps?

You’ll work within an intensive service position suited to your skills, interests or location preference, working to help move communities forward across the country.

How long will I volunteer for?

• Anywhere from 10 months to one year

• There are some part-time opportunities available, but most are full-time

What types of student debt relief will I qualify for?

• Most AmeriCorps members will qualify for postponement or forbearance of the repayment of your loans during your service

• When you’re finished with your service, you will a Segal AmeriCorps Education Award to help pay for college, graduate school, or vocational training or to repay student loans.

• This award is traditionally in the amount of $4,725, however, some colleges offer to match the amount, so it’s conceivable to double the amount and receive $9,450 to put towards you student loans.

You can learn more about the Segal AmeriCorps Education Award here.

Will I get paid?

• As a member, you will receive a modest living allowance. (Note: Although you may not make much money, as in, to open a savings account, you should have enough to live on to cover your daily needs.)

• Depending on the program, you may receive housing

• Depending on the program, you may receive health insurance

You can learn additional Americorps program details here.

Peace Corps

What is Peace Corps?

“As the preeminent international service organization of the United States, the Peace Corps sends Americans abroad to tackle the most pressing needs of people around the world. Peace Corps Volunteers work at the grassroots level toward sustainable change that lives on long after their service—at the same time becoming global citizens and serving their country. When they return home, Volunteers bring their knowledge and experiences—and a global outlook—that enriches the lives of those around them.” –Peace Corps Mission Statement

What do you do with Peace Corps?

• Volunteers travel to a foreign country and focus on one specific volunteer area, determined by the needs of the host country and by the qualifying skills of the volunteer.

• The areas generally fall under one of several general categories: Education; Youth in Development; Health; Community Economic Development; Agriculture; Environment; HIVE/AIDS; Food Security; Earth Day; Stomp Out Malaria.

How long will I volunteer for?

• Generally, starting out for 2 years

What types of student debt relief will I qualify for?

• If you volunteer with the Peace Corps, you can qualify for student debt relief from federally administered or guaranteed student loan programs during the time of your Peace Corps service.

According to the Peace Corps web site:

• Public student loans may be eligible for deferment

• Perkins loan may be eligible for partial cancellation – for example, 4 years of service may be eligible for up to 70% of loan forgiveness. (Note: Even more may be forgiven for additional years of service. )

• A “readjustment” allowance of $7,425 (pre-tax) upon completion of service

The rules and regulations allowing relief for each specific type of loan and the interest rates that accompany it, however, are extremely complicated. If you’re considering this route, it’s best to consult with you financial aid advisor on the guidelines for the loans you’ve taken out. Take a copy of these relief guidelines to discuss your options.

Additionally, Seed Global Health partners with the Peace Corps to help encourage Americans to volunteer in service work, lifting any financial constraints of an individual accepted into the program.

Seed Global Health is able to provide loan repayment to eligible volunteers through private philanthropists, which includes educational debt in the amount of up to $30,000 to qualifying individuals.

Will I get paid?

As a Peace Corps volunteer, you will receive:

• A monthly living a housing allowance

• All travel expenses paid (to and from country of service)

• 48 paid vacation days

• Full medical and dental coverage

You can learn more about the additional tangible benefits for volunteers here.

Plus, Career Connections:

• Unique graduate school opportunities

• Transition and job support, including social networking after service

• Advantages in federal employment

You can learn more about volunteer opportunities with the Peace Corps here, additional educational benefits the Peace Corps offers here and debt repayment through Seed Global Health here.

Sponsor Change

What is Sponsor Change?

“SponsorChange.org provides non-profits a solution to increase their impact. Non-profits can easily recruit skilled college graduates to complete service projects and raise funds from sponsors to reward their work with student loan payments, helping both non-profits and college graduates reach their full potential.” - Sponsor Change Mission Statement

What do you do with Sponsor Change?

Through Sponsor Change, you can find work at non-profit organizations and you’ll complete service projects.

As you complete projects, the site will help you raise funding through sponsors to reward your hard work to help pay back your student loan payments.

As a result, both the non-profits and you, the college graduate, receive benefits from the arrangement.

How long will I volunteer for?

• The length of time you volunteer will depend on your amount of student loans you’ve accumulated – basically, how much debt you have to work off.

What types of student debt relief will I qualify for?

• This is basically an even exchange: time in exchange for payment, so there’s not added student debt relief.

Will I get paid?

• Yes, in a sense. All of your “payments” will go towards your student loans.

What You’ll Need:

• A bachelor’s degree

• Proof of student loan debt

To learn more about Sponsor Change and the programs it offers, visit Sponsorchange.org.

Career-Specific Loan Forgiveness Programs

If you’re entering a specific field, you may qualify to enter a career-specific loan forgiveness program. These programs do differ by state, so check your states requirements for specifics.

Most of these programs allow teachers, doctors and other recent college graduates in specific professional fields to have the option to work in exchange for student loan forgiveness, similar to those listed below:

Nurse Corps Loan Repayment Program

What’s agreed to: You’ll work as a registered nurse for a minimum of 32 hours weekly for 2 years at a non-profit in need of nursing services

What you’ll get in return: Up to 60% of student loans paid off

Added value: If the nurse agrees to work 3 years or more, you’ll be eligible to get 25% more off loans

• Applications for the program are accepted once annually

You can learn more about eligibility and applications for the Nurse Corps Loan Repayment Program here.

National Health Service Corps. Program (for those within the medical field)

What’s agreed to: You agree to work as a medical professional for two years within a community in need of medical services

What you’ll get in return: You can receive up to $25,000 paid off of your student loans

Added value: If you work longer, there’s potential for even larger payoffs of your student loans

Loan Forgiveness Program for Teachers

This is for those who have taken out Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans.

What’s agreed to: You agree to work for 5 years as a teacher within a school in need – usually within a lower income community

What you’ll get in return: You’ll be eligible for anywhere from $5,000-$17,5000 in forgiveness of your student loans

To learn more about the Loan Forgiveness Program for Teachers, visit the Teacher Loan Forgiveness section of the Federal Student Aid web site.

Teacher Cancellation

This is for those who have taken out Federal Perkins Loans.

What’s agreed to: You must teach full-time for a full academic year or its equivalent as a teacher in one of the following scenarios: in a school serving students from low-income families; as a special education teacher, including teachers of infants, toddlers, children, or youth with disabilities; teacher in the fields of mathematics, science, foreign languages, or bilingual education, or in any other field of expertise determined by a state education agency to have a shortage of qualified teachers in that state.

To view all of the requirements in detail, visit the Federal Student Aidweb site.

What you’ll get in return: If eligible, up to 100 percent of the loan may be cancelled in exchange for teaching service. It will, however, be cancelled incrementally, though it does include interest that was accrued throughout the year.

Increments:

-15% cancelled per year for the 1st and 2nd years of service
-20% cancelled per year for the 3rd and 4th years of service
-30% cancelled for the 5th year

To learn more about Teacher Cancellation, visit the Teacher Loan Forgiveness section of the Federal Student Aid web site.

Public Service Loan Forgiveness Program

This is available for Direct Loans only.

What’s agreed to: You must make a required 120 qualifying payments on your Direct Loans on time, monthly payment made under one of the Direct Loan Program repayment plans, while employed full-time by a public service organization. Jobs include public health and safety, social work, library and varied law professions.

What you’ll get in return: After you make your 120th qualifying payment, you will need to submit the Public Service Loan Forgiveness (PSLF) application to receive loan forgiveness. The application is under development and will be available prior to the date when the first borrowers will be eligible for PSLF Program forgiveness, in October 2017.

Added value: The program is most beneficial for those who have excessive student loan debt who would not be able to pay back loans within 10 years.

To learn more about the PSLF Program, visit the Public Service Loan Forgiveness section of the Federal Student Aid web site.


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