You've just graduated from college. The average student graduates with $37,000 of student loan debt. Maybe you've considered doing a year or two of service after you get your degree, but when you look at your debt, it just doesn't seem like a responsible thing to do anymore. It's time to get a job and make some money, right?
You might have more options than you realize. Student loans can be a barrier to service, but not an insurmountable one. We'd like to outline some of the best ways to do MVS without feeling overwhelmed with your student loan debt.
Option #1: Deferment/Forbearance
There are many types of deferments and forbearances. In general, they are all ways to postpone or suspend your loan payments.
The Economic Hardship Deferment is the most common option that MVSers have used in the past. Deferment is generally granted in 12-month increments for up to 36 months during the life of the loan. Interest will continue to accrue during this time, but if you have a subsidized loan, the government will pay that interest for you.
Option #2: Scholarships
For the past three years, MVS has offered student loan scholarships to any participant who completes a full term of service and provides us with basic information about their loans. This money can help cover the interest that accrues during your time in MVS and to make a couple payments following your term.
While the amount of money we are able to give fluctuates from year to year, MVSers completing their term in 2017 received an average of $1,600 per person. Or stated another way, they had approximately 7.5% of their total debt paid off. (Award amounts vary somewhat depending on the total student loan debt that an MVSer holds.)
Option #3: Income-based repayment plans
Income-based repayment plans have been around for a while, but recent changes have made them an even better deal for people who want to do volunteer work with a program like MVS.
The idea of an income-based repayment plan is that once signed up, your monthly payment will never exceed 10 percent of your discretionary income. If you're in MVS, this means that your monthly payment is basically $0 (though interest will continue to accrue).
Are you considering a career in the nonprofit sector? An additional benefit of income-based repayment plans is that if your loan has not been paid off within 10 years, and if you have been working at nonprofit agencies for that entire time, you will be eligible to have the remainder of your loans forgiven under the Public Service Loan Forgiveness Program.
And don't forget about jobs!
For the past two years, over 50 percent of MVSers have received job offers from their placements at the end of their terms. MVS is a great way to build a resume and acquire valuable experience in your field, but more than that, it is often a direct path to a career.
If you are considering MVS but aren't sure if you can make it work with your student loans, contact us or complete an application. Kent Peters, our resident student loan expert, can help you review your options.