How Peace Corps Volunteers handle student loans

Student loans…the dark looming cloud that we try to ignore but just keeps getting bigger.

Every year, new Peace Corps Volunteers enter into service carrying with them some level of student debt. Most volunteers jump at the opportunity to defer their student loan payments for the entirety of their service. While this options works well in some cases, in many other cases, it is a wasted opportunity to whittle down the debt by using programs specifically designed for us.

If you are interested in the Peace Corps and have student loans, this article is for you.


Student Debt at a Glance

As of this writing, 44.7 million Americans have some level of student debt. The total bill comes to $1.56 trillion which is considerably more than U.S credit card debt, and nearly 12% of student loans are 90 days delinquent.

The average student debt is $29,800.

The average monthly payment is $393.

Hopefully this overview helps you feel less alone. If we’re being honest, we’re all in a tough spot.

Carrying this burden appears to be a fact of life we have to live with. All the more reason to find creative ways to work the system, consistently chipping away at this debt, while following our passion to serve and help others.

First, we need to know a few things.

What type of loan do I have?

Speaking in generalities, most student loans come from two areas:

  • Federal Direct Loans (think FASFA)

  • Private Loans (think banks and credit unions)

If you’re unsure of your loan type, this is a great resource to figure it out.

Private loans are inherently custom and depend almost entirely on your lender. If you have a private loan and plan to serve as a Peace Corps Volunteer, contact your lender and ask them how you can defer your payments during the 27 month period.

Federal Direct Loans are more common and offer semi-transparent programs that can be utilized as Peace Corps Volunteers.

Many of you have likely heard of the most popular one…(drumroll)

The Public Service Loan Forgiveness (PSLF) Program

If employed federally or at a qualified non-profit, you can have your Federal Direct Student Loans forgiven after 120 on-time payments.

Yes! Your Peace Corps Service of 27 months does qualify for this program.

Yes! The fact that you make so little money will mean that your qualified payment will likely be $0.00.

Here is what you should consider doing:

  1. Enroll in a qualified repayment plan. The ‘Pay As You Earn’ repayment plan (PAYE) seems to be the most widely used option.

  2. Certify that you work for a qualified public service organization by sending this form to certify@peacecorps.gov. To be extra careful, consider sending this form as well, and verify with the Peace Corps office that all the necessary information is accounted for.

  3. Re-submit the certification forms for each 12 months of service with the Peace Corps to ensure that nothing can jeopardize your standing as a qualified participant of the PSLF program.

Taking this approach will allow you to make 27 qualified payments of the needed 120. Under the Pay As You Earn repayment plan, your required payment will likely be $0.00. Seeing as the average monthly payment toward student loans is $393, this translates to considerable savings.

Next Steps

As with any important financial decision, make sure to get guidance from more than one area. We based much of this article around the Student Loan Hero article here as well as these very useful loan repayment case studies here. One of our writers also recommended this How To Money Podcast on student loans.

The Peace Corps official website also offers good information here.

Further reading about the qualifications for the PSLF program can be found here.

And the good people at the Consumer Finance Protection Bureau put this nice PDF together specifically for Peace Corps Volunteers.

Final Thoughts

The Public Service Loan Forgiveness Program is a long play. It requires you to stay in a qualified public service sector for 10 years, making 120 on-time payments. If your career goals have a different trajectory, you may do well to consider other options.

Try not to forget that you have close to $8,000 of readjustment allowance coming to you post your Peace Corps service. Depending on your strategy, that could be a healthy downpayment to cut your debt, or a creative way to ensure your on-time payment schedule as you reach for 120.

Regardless of your strategy, do your best to be responsible about your debt, while not letting it loom over you for the next 27 months. Organize and plan ahead of your departure so you can give your future community and self, your undivided attention.


Congratulations on making it through this article and preparing yourself for your Peace Corps experience. You can find more information about Preparing for the Peace Corps, The Application Process, and Concerned Parents in our other articles. 

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Hope to hear from you!

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