Reduction of Education Costs
Reduction of Education Costs
VISTA provides several benefits that can help you manage, or even reduce, your federal student loans, and offers others that can lower your overall student debt.
Loan Forbearance and Deferment:
If you have federal student loans (also called 'qualified' student loans), you may be able to put your loans into forbearance or deferment; the specific program will depend upon the end-of-service option you choose.
- Federal student loans + education award = forbearance
Forbearance is a temporary postponement of principal loan payments. The reason for this forbearance is 'national service.' The Corporation's Trust pays interest during service. Since these payments are considered income, however, you will have to pay taxes on the amount of interest paid by the Trust. This is the program available if you select the education award as your end-of-service benefit.
- Federal student loans + stipend = deferment
Deferment is a postponement of monthly loan payment(s). For subsidized loans, accrued interest will automatically be paid by the Department of Education if the loan is deferred. Your lender decides if you can defer your student loans during your year of service. The reason for this deferment is 'economic hardship.' You will need to obtain forms from your lender. You may also be eligible for cancellation of part of your Perkins Loan. Deferment is appropriate route to go if you choose the stipend as your end-of-service benefit.
GRE Fee Reduction:
The Educational Testing service, which administers the Graduate Record Examination (GRE), makes available to colleges and universities a limited supply of GRE Fee Reduction Certificates. To apply for a GRE Fee Reduction Certificate, contact the financial aid office of the educational institution that interests you to see if you qualify. Make sure to tell them about your experience serving as an AmeriCorps VISTA member. The decision is up to the college or university to which you apply.
College Cost Reduction and Access Act (CCRAA):
This federal regulation includes two programs that can significantly reduce, or even eliminate your student debt.
- Public Service Loan Forgiveness Program (PSLF)
Under PSLF, the Department of Education forgives any outstanding balance and accrued interest on a borrower's Direct Loan or Direct Consolidation Loan if you work for 10 years full-time at a nonprofit or government agency. You must also make 120 qualifying payments on the loan. Your AmeriCorps VISTA service year counts towards those 10 years, if you make payments towards your loan during service. Submit your PSLF Form to AmeriCorpsForms@cns.gov for completion. For security reasons, please do not include your Social Security Number on the form. Continue reading to learn how you can reduce your loan payments through the Income-Based Loan Repayment Plan.
- Income-Based Loan Repayment Plan (IBR)
Under IBR, your payments will be limited to no more than 15% of your adjusted gross income that exceeds 150% of the poverty guidelines. If you are single and make $11,000 each year in AmeriCorps, your monthly payment could be as low as $0 each month, which still counts towards the required 120 payments for PSLF.
Ed Award Match:
Many colleges and universities across the country actively recruit talented AmeriCorps VISTA alumni for their reputation of perseverance, drive, and proven active citizenship. Many also offer incentives such as service scholarships or matching tuition funding to the Segal AmeriCorps Education Award.
You can view a list of educational institutions that offer these incentives here. Be sure to contact the institutions or institutions you're interested in for up-to-date information.
For more detailed information on each of the benefits described, and for help in making the difficult decisions about which benefit(s) is right for you, please explore the following resources:
- Education Award (tutorial)
- The College Cost Reduction and Access Act (PDF)
- Student Loan Deferment or Forbearance for VISTAs (PDF)
- Loan Postponement and Interest Payment in the Member Handbook, Chapter 6
- Using the Segal AmeriCorps Education Award and Managing Student Loans (Webinars for VISTAs)
- GRE Fee Reduction Program in the Member Handbook, Chapter 6
- GRE Fee Reduction Program Educational Testing Service Website