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Postponing Student Loan Payments
While serving as an AmeriCorps member, individuals may be eligible to have the repayment of their qualified student loans temporarily postponed through an action called forbearance. While a loan is in forbearance, the member is not required to make payments. Interest may continue to accumulate, but if the member successfully completes the term of service, the National Service Trust will pay all or a portion of the interest that accrued during the service period. After you finish your term of service, you will be responsible for repaying your loan according to the terms of the loan. Read more below.
What is student loan forbearance?
Forbearance is an option to delay student loan payments in case you are temporarily unable to make your monthly payment. While in forbearance, your loans continue to accrue interest (see Interest Payments below to see how AmeriCorps may be able to cover your interest payments accrued during your service term). That interest capitalizes, or gets added to your balance, when your loans switch out of forbearance and back into your payment plan. Read more about loan forbearance here.
Members are eligible for forbearance for most federally-guaranteed student loans. You should contact your loan holder to see if your loan qualifies for forbearance based upon you AmeriCorps service. If your loan holder tells you that your student loan does not qualify for forbearance based upon national service, ask them if your service qualifies you for some other type of forbearance or deferment. Only the loan holder can determine your loan's eligibility and approve your request for forbearance. The Corporation for National and Community Service cannot approve forbearance requests; it only verifies that you are serving in an approved national service position.
How to Apply for Forbearance
After you have enrolled in AmeriCorps, go into your account in My AmeriCorps.
- In your Home Page, click on the “Create Forbearance” link to bring up the page where you can request forbearance.
- Follow the instructions. 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. You can also check the status of your forbearance request in your My AmeriCorps account.
If the loan company has not registered in My AmeriCorps, they will not be on the list of institutions in the system. Try searching for the institution using variations of their name. Some institutions have registered using their commonly known initials (e.g., SUNY, not State University of New York); others are registered under their full name (e.g., Massachusetts Institution of Technology, not MIT). Try the city where the institution is located. If you cannot find the correct institution at the correct location, you should click on the institution “Not Found” link and follow the directions.
Individuals who have successfully completed a term of service in an AmeriCorps program are eligible to have the Trust pay up to 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 the service period. The Trust will only pay interest on qualified student loans.
An interest payment can only be made after you have completed your service and have earned an award. The Trust cannot 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, or the death of an immediate family member.
Interest payments are made in addition to your education award; they are not deducted from your education award amount. Interest payments are based upon the interest that accrued during the time you were serving. 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 the 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. Select the appropriate term of service and type of loan. Then, 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 that you served in an AmeriCorps program and earned an education award. It also requests that the loan holder provide information about your qualified loan so that the correct amount of interest can be determined. The loan company provides the information, then certifies and submits the payment request electronically to the National Service Trust.
It is a good practice to get the accrued interest paid before making a payment using your education award. This will give you a more accurate payoff amount if you want to pay off a student loan using your education award.
When the interest payment has been made, it will show up in your My AmeriCorps account. It should also show up in the statement that the loan company provides to you.