Peace Corps Student Loan Forgiveness

Looking for the forgiveness of your student loan debt? There many benefits of joining the Peace Corps. Learn more on loan forgiveness with Public Service Loan Forgiveness program and the Perkins Loan Cancellation program.

Updated by Jason Joy Manoj on 3rd July 2020

Are you looking for a student loan forgiveness program to help clear your financial woes? Enrolling for the peace corps doesn’t just let you qualify for a forgiveness program but also lets you step into the shoes of a real-life hero. There is no Peace Corps Loan Forgiveness Program but there are federal programs available to the volunteers at the Peace Corps like reduced monthly payments and complete student loan forgiveness.

It should be noted that are a number of jobs available to help get your loans forgiven. Having an in-depth understanding of the various student loan forgiveness jobs out there is crucial to see if your job can get your loans forgiven.

Table of contents

Public Service Loan Forgiveness program 

The Public Service Loan Forgiveness program benefits the volunteers at Peace Corp the most. The PSLF program offers forgiveness of loans for borrowers after making 120 qualifying payments. 

Given below is the criteria for qualifying for PSLF:

1) The loans currently with the borrower to be forgiven have to be Direct loans - If the current loans are not direct then the borrower can consolidate his/her loans where the consolidated loan will be a direct loan.

2) The borrower must work for a non-profit or a Government entity - The peace corps is run by the US Government and would qualify.

3) The borrower must qualify for any of the following repayment programs - Here is a list of repayment programs that can help a borrower qualify for PSLF :

  • PAYE


  • Income Contingent Repayment Plan

  • Income-Based Repayment Plan 

Once you clear the criteria mentioned above the payments you make will contribute towards your loan forgiveness.

Federal direct loans

In order to eligible for PSLF, the loans have to be federal direct loans. If the loans currently under the borrower are not direct the Government offers a free consolidation program that consolidates all the existing loans into a new loan.

This new loan is a direct loan that can qualify for loan forgiveness. Before jumping into consolidation it is important to check what kind of loan you currently have. You can check the type of loans at 

Upon consolidation, you can still retain any subsidized benefits after consolidation.

Worried about your college tuition? Learn more about student loans

Repayment Plans for PSLF eligibility 

Volunteers at the Peace Corp who are interested in applying for PSLF must choose from the four available income-driven repayment plans.

Income-driven repayment plans use discretionary income during the calculation of the monthly payments unlike the conventional usage of the loan balance and interest rate. These repayment plans allow the borrower to qualify for a $0 monthly payment depending on the family size and income. Although the payment is $0 it still counts towards forgiveness of the loan and will not be considered as deferment or forbearance.

The table given below will give you an overall idea of the repayment plans and their relation to various considerations:

Repayment Plan % of discretionary income Qualification for PSLF? Interest Forgiveness
REPAYE 10 Yes Yes
PAYE 10 Yes Yes
IBR 15 Yes Yes
ICR 20 Yes No
Graduated Doesn't apply No No
Standard Doesn't apply No No

As shown in the table above although ICR is an income-driven plan it does not allow interest forgiveness.

Income Recertification

You will have to recertify your income annually once enrolled for an income-driven repayment plan. These repayment plans are based on your income and under the assumption that your income is subjected to change so recertification is necessary so that you aren’t switched from an income-driven repayment plan to a standard plan which one won’t make contributions towards loan forgiveness.

Income recertification is said to be done by the borrowers at their own will and are not expected to be reminded to do so. 

Remaining employed at a public sector or non-profit organization

Volunteers at the peace corp who are looking to qualify for a loan forgiveness program must continue to work at a public sector job or a non-profit organization. 

Take the scenario where a borrower would have worked with the peace corps for 3 years and then went on to work in a private sector once they return home then the time spent with the peace corps would only contribute towards the loan forgiveness.

PSLF requires 120 payments for the loan to be forgiven, it should be noted that the payments do not have to be consecutive so working for a while in a private sector or organization will not hamper your journey for forgiveness. So after a while in the private sector if you decide to go back into the public sector or non-profit you can start contributing towards your loan forgiveness. This time returning back to the peace corps will be combined with your previous time with them. 

It is important to note that if you have two qualifying periods you need to submit two PSLF forms which can certify both the places of employment or volunteering.

Only volunteering full time at AmeriCorps or Peace Corps can contribute towards loan forgiveness. 

Perkins Loan Cancellation

You can have up to 70% of your loans canceled by working and serving with the Peace Corps. The program on a yearly basis meaning that each year spent with the Peace Corps or the AmeriCorps Vista you will have a percentage of your Perkins Loan canceled.

To apply for this cancellation you will have to get an authorized official at the Peace Corps or AmeriCorps Vista program to certify the borrower's cancellation form. 

A table on the Percentage of the loan forgiven

As per the number of months you serve you can get a percentage of your loans forgiven. 

Number of months of service
% of loan forgiven
12 15
24 15
36 20
48 20
Total 70

As shown in the table a borrower can have a total of 70% of his loans canceled.

It should be noted that in order to cancel your Perkins loan you shouldn’t have had your loans consolidated as that will convert your loans from Perkins to direct and you will no longer be eligible for cancellation. You can consolidate your loans and apply for eligibility for a forgiveness program.

What if I have private student loans?

The private student loans are given by private lenders and not by the government. The repayment options and benefits are limited for private student loans. There are currently no options for forgiveness for the loan borrowers at this time. 

Borrowers need to watch out for refinancing as it converts all our current loans into private loans which will lose our eligibility for a number of benefits and forgiveness with our federal loans.


The repayment journey for your loans can be hard, volunteering at the Peace Corps can help the borrowers with their federal loans. With the options given with PSLF and Perkins Loan Cancellation options. You can either get your loans completely forgiven or you can get 70% of your loans canceled. In addition to this, volunteering here lets you avail of an income-driven repayment plan where you can make $0 monthly payments towards your loan forgiveness.