How To Pay Off Your Student Loans By Volunteering?

In the last year alone, student loans amounted to about $1 trillion in the US. Quite a few of us find it hard to even keep a track of the number of zeroes in a figure that big. The amount of student loan debt that an average American student has when they graduate is roughly $29,400, which is huge. Numbers this big force college grads to take up low-paying jobs for which they are often over qualified out of sheer panic and anxiety caused by student loans. Quite a large number of students end up unemployed for a long time.

In order to speed up the process of student loan repayment, students get creative with the plans and terms that they adopt. Some look into federal student loans where the repayment duration gets extended. Some others explore options of student loan refinancing or forbearance which may allow them to take a temporary break from repayments. The truth is, while a range of these options may give them momentary relief, over time students still end raking up a lot of debt.

Here’s a piece of good news. Participating in volunteering activities can help you chip away at your student loans quite faster. Some organizations even offer to pay off your debt entirely in exchange for service from your part. Engaging in community service can also be a great way to give back to the community. In addition to relieving you from a major part of student loan concerns, it can also have a positive psychological impact as opposed to doing work just to repay your student loans.

We will learn about a few esteemed organizations that offer to assist you with student loan repayment.

TABLE OF CONTENTS:

• Organizations that allow volunteering in exchange for paying off your student loans
• Income-Driven Repayment and Public Service Loan Forgiveness(PSLF)
• In Conclusion

Organizations that allow volunteering in exchange for paying off your student loans

The following organizations can help you pay off your student loans if you volunteer to work with them.

Sponsor Change

SponsorChange connects nonprofits with people willing to volunteer and these volunteers are helped with repayment of their student loans in exchange for work. They are based in Washington D.C., and they operate in Pittsburgh and Chicago. Their mission statement reads “We empower volunteers by creating a pathway to meaningful skill-based project opportunities at social impact organizations while helping volunteers raise funding to pay down their student loan debt.”

Anyone who is currently in school and graduates with student loan debt racked up are eligible to work with SponsorChange.

True to their mission statement, this organization works to match volunteers with work that complements their skills. 

A volunteer may begin work once they hit $200 worth of backing from sponsors. These volunteers may even receive up to $1000 per project. These projects require them to work for about 40 to 50 hours over a span of three months.

After a volunteer completes their obligations, the money that they need to receive will be directly sent to their student loan servicer.

AmeriCorps NCCC, National, and State

AmeriCorps National Civilian Community Corps (NCCC) is a full-time residential program that deals with issues such as disaster relief, environmental programs, public safety and youth development. Volunteers are permitted to serve up to two terms, but are required to take a ten-month break after their terms before they can enrol again. 

The AmeriCorps state and national programs collaborate with local communities and a range of nonprofit organizations. With this, volunteers may serve for up to 5 terms.

After serving full time for a period of 12 months, volunteers will receive Segal AmeriCorps Education Award. This can be devoted to the repayment of their student loans or for higher education. The eligible loans for this relief are direct federal and state loans and those given under the Titles VII or VIII of the Public Service Health Act. A maximum of 2 awards may be given to volunteers.

This award amounts to the maximum Federal Pell Grant that is awarded, which is $6,095 for the year 2019. Any interest accumulated during the period of volunteering is also paid. The only downside is that the award and the interest repaid are considered taxable for the volunteer. It may be advisable for the volunteer to adopt income-driven repayment for the duration of their service.

AmeriCorps VISTA

AmeriCorps Volunteers in Service to America (VISTA) works with government agencies and nonprofit organizations in an effort to alleviate poverty. Volunteers are required to be willing to work for at least a year and may serve for up to a period of 5 years. 

Volunteers may be eligible for the Segal AmeriCorps Education Award after 12 months of service similar to state, national, and NCCC AmeriCorps programs. Another difference is that they may take the award in the form of cash instead of as a direct loan payment.

Participants are also required to enrol for an income-driven repayment plan for the duration of their service. VISTA volunteers may avail forgiveness for up to 15% on any Perkins loans for the first two years and up to 20% of their Perkins Loans will be cancelled for the next 2 years.

Teach for America

Teach for America’s mission reads that they work “to enlist, develop, and mobilize as many as possible of our nation’s most promising future leaders to grow and strengthen the movement for educational equity and excellence.”

Teachers who volunteer to serve for Teach for America get posted to work in inner-city or rural areas where they teach the economically disadvantaged populations.

Participants are required to hold an undergraduate degree from an accredited college before they start with their training; have secured a minimum grade point average of 2.5; and be a US citizen, a legal permanent resident, or a DACA(Deferred Action for Childhood Arrivals) recipient.

Teach for America positions usually pay between $33,000 and $58,000, and provide a range of additional benefits. On-the-job training is also provided to teachers which is likely to be beneficial to them later in their careers. They can also work towards PSLF.

Peace Corps

The Peace Corps send volunteering Americans to deal with issues that concern the wellbeing of the world at large. PeaceCorps is mainly concerned with sustainable change at the grassroots level and making global citizens out of the people who volunteer to work with them. Their projects involve causes for education, environmental advocacy, healthcare and economic development.

Anyone who is 18 years or older may work with them. Peace Corps volunteers may pause the repayment of their federal student loans by deferment. They may qualify for a cancellation on their federal Perkins loans up to 15% for the first 2 years. For the next 2 years they may avail a cancellation of 20% on the same. Some of them are eligible for income-driven repayment and Public Service Loan Forgiveness(PSLF).

National Health Service Corps

The National Health Service Corps is a division of the U.S. Department of Health & Human Services. Their aim is to bring health care to those in impoverished, remote, and underserved areas. professionals from the fields of medicine, healthcare, dentistry, etc. 

The volunteers are required to have one of the following qualifications:

• For medicine: MD, DO, NP, CNM, PA

• For dentistry: DMD, DDS, RDH

• For behavioral health: HSP, LCSW, PNS, MFT, LPC

Physicians are required to make a 2 year commitment to the program in order to avail up to $50,000 for repayment of their medical school student loans. This commitment has to be done at an approved NHSC site in an area that is medically underserved. 

This payment is also free from federal income tax which is a major perk.

Shared Harvest Fund

The Shared Harvest Fund’s principle is similar to that of SponsorChange. One difference is that they charge a subscription fee. Their bases are located in Los Angeles, Chicago and New York City. But they also work out of a number of different cities across the US. Volunteers are matched with organizations that cater to their interests. After completion of a project, the volunteers receive anywhere between $250 and $1,000 which is directly to their student loan servicer. An additional $50 is also given to them for every organization that is referred

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Income-Driven Repayment and Public Service Loan Forgiveness(PSLF)

At least a year’s service is expected of participants from volunteer programs that offer assistance with student loan repayment. A small stipend may be provided to them for the duration of their service. But concerns of their ever-burgeoning student loans will reside in the back of their mind. It is not advisable to apply for deferment or forbearance in order to get a brief break from repaying student loans since these tend to have adverse effects on credit scores over the long run. Also with these options, student loan interest will still continue to accrue and the full balance still remains after the deferment or forbearance span.

Adopting an income-driven repayment plan would be a better option. Monthly repayments are calculated based on income and the amount of debt remaining. This could dip as low as $0 for people who partake in volunteering depending on what little money they make. 

Public Service Loan Forgiveness (PSLF) would be a good option for borrowers planning to join public service. Any remaining direct student loan will be forgiven with this plan after a borrower makes 120 consecutive and timely payments over a span of ten years. They are required to repay the said money via an income driven repayment plan. They must be engaging in full time work in a public service role. 

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In Conclusion

Full time paid employment is good for borrowers who do not wish to pursue a career in public service. This will; render them ineligible for PSLF. They may still be eligible for income-driven repayment plans. The only downside is that they may end up accruing more interest on their student loans than when they began for the duration of their volunteering. 

Volunteering can be a great idea for people who are looking to expand their experience and skill set and also manage their student loan debt meanwhile. Volunteering work may even turn into full time employment depending on your level of satisfaction with what you do.

But if you are looking to enter into the public service sector, then working with organizations such as the AmeriCorps or the Peace Corps could help you benefit greatly. The terms offered by these organizations make a difference to the 120 months of public service required for PSLF.