Postponing Student Loan Payments and Getting Interest Paid
Individuals who are serving in a term of service in an approved AmeriCorps position may be eligible to temporarily postpone the repayment of their qualified student loans through an action called loan forbearance. While your loan is in forbearance during your term of service, interest continues to accrue. However,If you successfully complete your term of service the National Service Trust will pay all or a portion of the interest that accrued on your qualified student loans during your service period.
You can request that your loan company (your “loan holder”) approve a forbearance for your qualified student loans during your service period. You can easily and quickly request the forbearance on-line through My AmeriCorps. After you finish your term of service, you will be responsible for repaying your loan according to the terms of the loan.
Eligibility for Forbearance
Individuals in approved AmeriCorps positions are eligible for forbearance for most federally-guaranteed student loans. If your loan holder tells you that your student loan does not qualify for forbearance based upon your national service, ask if your service qualifies you for some other type of forbearance or for a deferment.
The Corporation cannot approve or disapprove forbearance requests; it can only verify that you are in an approved national service position. Only the loan holder can determine your loan’s eligibility and approve a request for forbearance If your loan is in default, it may not be eligible for forbearance. However, if you have loans that had gone into default before you began your national service, you can attempt to negotiate an arrangement with the loan holder or collection agency to bring the loan out of default so forbearance can be granted and interest can be paid.
How to Apply for Forbearance
After you have enrolled in an AmeriCorps project, you can go into your account in My AmeriCorps. In your home page, click on the “Create Forbearance” link at the top of the page to bring up the page to request forbearance.Follow the instructions.You will select your current term of service and identify the company that holds your student loan. When you click on “submit,” a request will be sent electronically to your loan company. This request will verify your involvement in AmeriCorps and request that your qualified loans be put in forbearance during your service period.
Your loan holder will notify you when they have acted upon your request. You should contact your loan holder if you have not heard from them within four weeks of submitting your information online.
If the loan company has not registered in My AmeriCorps, they will not be on the list of institutions in the system. In this case, you should click on the institution “Not Found” link and follow the directions.
Individuals who have successfully completed a term of service in AmeriCorps or Silver Scholars are eligible to have the Trust pay as much as 100% of the interest that accrued on their qualified student loan during their service. The portion that the Trust will pay is determined by the type of service (full or part-time) and the length of your service period. The Trust will only pay interest on qualified student loans, as described on the Using your Segal AmeriCorps Education Award web page.
The Trust will not pay interest if you fail to complete your term of service. Exceptions will be made only if you fail to complete your term of service for compelling personal circumstances and you have earned a pro-rated award. It is up to your individual program to determine compelling personal circumstances. Examples that might be considered are a serious illness or injury, death of your immediate family member, or early closing of your project. An interest payment can only be made after you have completed your service and have earned an award.
Interest payments are in addition to your education award; they are not deducted from your education award amount. Interest payments are based upon the interest that accrued only during the time you were serving in the AmeriCorps program.
Remember that interest payments, as well as payments made from your education award account, are considered by the IRS to be taxable income in the year in which a payment is made.
How to Apply for an Interest Payment
After you have completed your service and received notification of your award, you can go into your account in My AmeriCorps. In your home page, click on the “Create Interest Accrual” link at the top of the page to bring up the page to request the payment. Follow the instructions. You will select the appropriate term of service and type of loan and identify the holder of your student loan. When you click on “submit,” a notice will be sent electronically to your loan company. A record of your request will appear in your account home page.
This notice will verify your involvement in national service and request that the loan holder provide AmeriCorps with the amount of interest that accrued between your start date and end date of your service period. The loan company will provide additional information, then certify and submit the information electronically to AmeriCorps.
When the interest payment has been made, it will show up in your account. It should also show up in your account statement that the loan company provides to you.
If your loan company has not registered in My AmeriCorps, they will not be on the list of institutions in the system. You should click on the institution “Not Found” link and follow the directions. These payment requests may need to be processed manually through paper forms and may take several weeks to complete.
The Importance of Using My AmeriCorps to Conduct Your AmeriCorps Business
In order to prevent a delay in the processing of interest payments, individuals must request payments electronically using our on-line system, My AmeriCorps. This is a secure, fast, and user-friendly method for requesting interest payments to be remitted to your loan holders. It also provides electronic records of payments requested and paid and there are no forms to mail in.
The Corporation for National and Community Service cannot guarantee the prompt and accurate processing of requests for interest payments using paper forms. Payments requested by paper can take up to six months or more for processing and are less secure.
It is fast and easy to access your National Service Participant account in My AmeriCorps. To register, go to https://my.americorps.gov/mp/login.do and click on “Register to create a new Member/Alum account” and follow the instructions.