Joining the Peace Corps can be a frightening thought for most Americans. Images of living in mud huts and fishing with spears come to mind. However, nowadays there are many options as to where a volunteer can be sent, including Eastern Europe where volunteers work as teachers in schools or small enterprise and development employees to helping local businesses thrive. Or if a person is an adventurer, the more traditional experience is still an option, including remote regions of Africa and Asia.
This government organization offers many Americans a chance to discover the world. In the two years of service, volunteers accrue 48 days of vacation time, so it is also a chance to travel and explore surrounding countries. The experience offers a unique view of the world, and will stay with the Peace Corps volunteer (PCV) all her/his life. Yet there is another benefit that is rarely discussed: the ability to cancel a Perkins loan.
Student Loan Help for Recent Graduates
According to top loan lending provider, Sallie Mae, "a federal Perkins loan is a low interest (5%) loan for undergraduate and graduate students with 'exceptional' financial need." It imbues most of the qualities of a regular Stafford loan, yet there no fees and after graduation, students receive a longer grace period to repay the money. For example, Stafford loans usually have a six-month grace period versus Perkins, which has a grace period of nine months.
Many students chose to join the Peace Corps right after college; therefore, they are most likely still in the grace period. When this time frame is up, the PCV has the option of canceling a large portion of her/his loan or loans. This is virtually unheard of. In fact, for Stafford loans, the PCV is only allowed deferment. Here is how PCVs qualify for cancellation of a Perkins loan:
- Upon 365 days of service completed, the government will cancel 15% of the loan
- Upon three or four years of service completed, the government will cancel 20%
- Upon the completion of the fourth full year of service, a total of 70% of the PCV's Perkins loan will be canceled. This is a whooping total figure, considering the PCV will be left with only 30% of the original debt.
Thinking of Joining the Peace Corps to Pay Off Debts?
Before a person jumps online and fills out an application, s/he should know the Peace Corps is not an easy, one step process, as often depicted on television and in movies. It is a prestigious organization that incorporates a lengthy application process for prospective PCVs.
The process lasts anywhere from six months to one full year. The application is comprised of a personal statement, recommendation letters from professors or employers and many forms to fill out. In addition, the applicant must be "bonded" or screened and fingerprinted by the FBI, undergo an extensive medical evaluation and be interviewed for a long period of time. Once the applicant passes the preliminary stages, there are more successive stages to go through, such as qualifying for a region of the world, assignment placement and specific country placement. So it is best to apply well ahead of time.
The Peace Corps* offers once in a lifetime opportunities to enrich a person's cultural knowledge; however, it also offers financial help in the cancellation of Perkins loans of up to 70 percent. The recent graduate should carefully consider if joining this organization is the right choice for her/him and then apply well in advance.
*If a recent graduate would like to stay in the US and serve, take a look at this article, Obama Money for College, to read how joining AmeriCorps aids student debt as well.
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