As tuition rates increase, more students than ever are borrowing to pay for school. According to www.FinAid.org, the average debt among graduating seniors is $37,172 accounting to U.S. News. Excessive loan debt can force borrowers into careers they don't prefer and can cause economic hardship down the road. For student borrowers, AmeriCorps service can help minimize federal loan debt and even set a course to wipe it out completely.
The Segal AmeriCorps Education Award can be used to repay qualified loans. There are loan strategies for using the award effectively.
While serving, VISTAs (who elect to receive the education award) and AmeriCorps members can place their qualified awards in forbearance. This means they won't make payments while serving and the interest that gathers on their qualified loans will get paid once they successfully complete their term(s) of service. Deferment is also a possibility for VISTAs making the choice not to receive the education award.
There are additional options for student borrowers. These include government programs that might lower your loan payments while you serve based on your living allowance (Income-Based Repayment). You might pay as little as $0 per month, while you serve. A second program might wipe away your loans completely if you work for 10 years full-time at a nonprofit or government agency (Public Service Loan Forgiveness).