Accrued Interest Formula

AmeriCorps and VISTA members with high loan balances often fear that the National Service Trust will pay off less than 100 percent of the interest that accumulates during their service terms.
 
The line in the official materials that states, "The Trust will pay all or a portion of the interest that accumulated during the service period," also leaves members wondering what circumstances would cause the Trust to pay less than 100 percent of the accumulated interest.
 
In most cases, following a full time service term, the Trust will pay 100 percent of the interest after successful completion of service.
 
If you serve in a part-time position or receive a pro-rated education award, the total might be less than 100 percent.
 
You can use this formula to determine how much the Trust will pay.
 
Here's what you'll need to know to use the formula.
 
  • How many service hours did you complete?
  • How many days were you enrolled in service?
According to the law, the percentage of accrued interest that the AmeriCorps will pay: is the lesser of:
 
(1) The lesser of the product of--
(i) The number of hours of service completed divided by the number of days for which forbearance was granted; and
(ii) 365 divided by 17; and
(2) 100
 
Here's an example for an AmeriCorps member who completed a 1,700 hour term in ten months (October-July):
 
[1,700 hours / 304 days = 5.59] X [365 / 17 = 21.47] = 120
 
Since 120 is greater than 100, AmeriCorps will pay off 100 percent of the accumulated interest on this member's student loans.

Enter Keywords to Find Resources:

 

 


Find us on Facebook


 

Have Feedback or Questions?

Email Us

Back to Top