Forbearance
For… what?
What's forbearance and should I use it?
AmeriCorps and VISTA members who are earning an education award are uniquely eligible for postponing student loan repayments through a practice called "forbearance." During forbearance based on national service, interest continues to accrue on the loan. If you successfully complete your term of service and earn an education award, the Trust will pay all or a portion of the interest that has accrued on your qualified student loans during this period. The accrued interest paid by the Trust, like the education award itself, is subject to income taxes.
To postpone repayment of your qualified student loans, you must first officially enroll as a member. This electronically sends enrollment information to the Trust. Then you must request "forbearance" from your loan holder by completing the Forbearance Request for National Service form. Your loan holder may also ask you to fill out additional information or forms. Complete one form for each of your loan holders. Since there are several types of forbearances and deferments, tell your loan holders that you are requesting loan forbearance based on your AmeriCorps or VISTA service.
Submit your Forbearance Request for National Service form and any other information required by your loan holder to the National Service Trust, which will process and return it to your loan holder. The Trust can certify your AmeriCorps or VISTA status, but only the loan holder can determine your eligibility for forbearance. Contact your loan holder if you haven't heard from them within four weeks of submitting your information to the Trust.
How do I get the interest paid on my loans?
For the Trust to pay all or part of the interest accrued on your qualified student loans, the Trust must receive verification from your project that you have completed your service and are eligible for an award. You and your lender also must complete the "Interest Accrued During National Service" form, which indicates the amount of interest accrued during your service period. Your loan holder sends this completed form to the Trust for payment.
The Trust WILL NOT pay interest on qualified student loans if you fail to complete your term of service. Exceptions will be made only for compelling personal reasons. It's up to your individual program to determine those circumstances. Things that might be considered "compelling reasons" for failure to complete your service are a serious illness or injury, death of an immediate family member, or early closure of your project.
The Trust will only pay interest on qualified student loans. Ask your loan holder if your student loan qualifies for other kinds of forbearance.
Can I get forbearance if my loans are in default?
Most student loans that are in default are not eligible for forbearance. If you have loans that have gone into default before you began your service, you can attempt to negotiate an arrangement with the loan holder (or collection agency) to bring the loan out of default so forbearance can be granted and interest paid.
