Something for nothing: How volunteering can help pay off student loans
Aug 25th 2010 1:15PM
Updated Aug 25th 2010 3:37AM
In part one of this two-part series, Money College blogger Jennifer Larson explores how students can get student loans paid or deferred through their volunteer work.
If you feel stuck in the never-ending cog of student loan debt, you are certainly not alone. A lot of people are in the same situation, and among there are many ways to break free including -- surprise -- volunteer work.
If your main priority in life is giving back to society and helping others, you may have heard plenty of times that this will keep you from making big bucks. That may be true in some cases, but many volunteer organizations and teaching programs recognize your hard work and want to reward you for it.
Several organizations and employers offer aid for paying student loan debt and loan forgiveness programs. Similar to volunteer organizations, a few teaching programs award college grads with student loan payments or enroll them in forgiveness programs. These programs also allow grads to positively affect their community while they start to pay off student loans.
- AmeriCorps is a national network of service programs that requires graduates to volunteer for a year, full-time. In exchange for volunteering, AmeriCorps gives workers a small living stipend and, at the end of the year, an education award of $4,725 that can be applied to student loan debt or future education programs.
- SponsorChange.org is a relatively new organization located in Pittsburgh, dedicated to helping non-profits and college graduates reach their full potential by recruiting grads to work for non-profits. In return, it pays off portions of their student loan debt. Volunteers work an average of 12 hours per month. It is looking to expand to other major U.S. cities.
- The Peace Corps requires grads to make a two-year commitment to work in a foreign country. Unlike the above programs, it does not reward volunteers with student loan payments, but allows participants to defer loan payments during service. For those with Federal Perkins Loans, a partial cancellation benefit of up to 70% is offered for four years of work. The program also provides participants with a $6,000 readjustment allowance after two years service. According to the Peace Corps website, a portion of this can be used to repay student loan debt.
- Teach for America, similar to AmeriCorps, gives those chosen a salary and benefits, plus an education award of $5,350 at the end of each year of service (a total of $10,700 over two years) for student loan debt or future education costs.
- TEACH Grants are geared toward teachers in low-income or high-need areas, awarding those who stick with the program for four years $4,000 in grants. Those with TEACH grants should not drop out early, however, as the reward is reversed for teachers who do not compete the four-year program: You'll end up owing even more.
In Part 2: Student success stories from the Pittsburgh-based program SponsorChange.org.