VISTA Testimonials: Student Loans

Bill Brown — Mon, 23 Aug 2010 19:56:55 +0000

This is a place to empathize with fellow DASCorps members when dealing with Student Loans and AmeriCorps (a deadly combination)

This personal experience comes from VISTA Nicole Bellanger:

I graduated this May and currently my Stafford loans are in a grace period until November. I called the Direct Loan program to make sure I understood everything before submitting my forbearance request and it turns out there was a lot I did not understand.

Because my loan is in its Grace Period, and the loan provider is required by law to provide a 6 month grace period, they are not able to put my loan into forbearance until the grace period ends. I was concerned because I wasn't sure if the interest accrued on my loan before I go into forbearance would be covered by Americorps and every little bit of help paying those loans is going to be helpful. The Direct Loan program did not have the information I needed and suggested that the interest accrued before my grace period ends would not be covered by AmeriCorps.

Not wanting to take no for an answer and being a little confused, I called the VISTA Member Support Unit and they put me in touch with someone who deals directly with the Segel Ed. Award. That person cleared up my confusion, letting me know that although I am not able to put my loans into forbearance until my grace period ends, AmeriCorps will cover the interest that accrues between my first day of service and the last day of my service, whether the loan is in forbearance or in the grace period. Hope I understood her correctly.

Another important thing you guys may need to know - if your loan is in the grace period your loan provider will reject any request you make to put it into forbearance, because by law they need to give you a 6 month grace period. I was told to submit the forbearance request through my.americorps.gov 2 weeks before my grace period ends (not before 1st payment date) and to then call my loan provider to make sure the forbearance req. has gone through.

Education Award & Student Loan information

Ben Sheldon — Wed, 07 Feb 2007 14:55:19 +0000

Ed Award or Stipend?

If you successfully complete a term of service in AmeriCorps VISTA, you are eligible to receive either a Segal AmeriCorps Education Award ($5,350 towards qualified student loans) or an end-of-service stipend ($1,500 cash money).

You will be asked to choose one or the other at the begining of your service and when you are making this decision please remember that while you can switch from the Ed Award to the Stipend prior to the your 10th month of service, you cannot go from the Stipend to the Ed Award. (when in doubt, defer to the Ed Award)

Also, be aware that changing from the Education Award to the Stipend may negate any forbearance requests you may have in effect on existing student loans (if applicable), and would eliminate any interest payments now scheduled to be made by the National Service Trust on your behalf at the end of your service year.

Loan Forbearance and Interest Accrual information

Basically any student loan given by the government (Stafford, Perkins, etc.) can put on forbearance during your year of service and the government will pay back all of the interest that was accrued that year at the end of your service.

More info about this stuff and to make sure that your loans qualifyhere.

Perkins Loan cancellation

If you did not select the Ed Award but have student loans (specifically perkins loans) you might be able to cancel %15 of all of those loans. On the VISTA Member Benefits Election Form, it says "If you select the stipend, you may also be eligible for partial cancellation of Perkins loans." Perkins Loan cancellation would be granted through the financial aid office of whichever school the VISTA member attended. For more information, he or she should contact the school directly. The school should have specific forms that can be filled out to request the partial cancellation, or some other process in place.

More info here. (search for 'perkins' to find the right paragraph)

Brandon Rogers's Report

So your Ed Award counts as taxable income. This means if you use all of it to pay off one loan, your going to be taxed a chunk of money come tax time (and potentially bumped up to the next tax bracket and pay even more money). Brandon Rogers use to be a VISTA and created this report on how to most effectively use your Ed Award. Read through Brandon Rogers' report for info about it's impact on income taxes and financial aid:

http://americorps.gov/pdf/effective_ed_award_rogers.pdf

Digital Arts Service Corps - student loans

VISTA Testimonials: Student Loans

Education Award & Student Loan information