Advertiser Disclosure
You're our top priority.
We want you to be able to make decisions about your student loans with confidence. We offer objective, independent, straightforward guidance on student loans and refinancing lenders. While our site doesn't answer every question or have every lender, we are proud to provide the information and tools you need — free of charge — to make the best decisions for yourself. So how do we make money? We get paid in two ways. First, you can hire us to develop a student loan strategy for you and implement that strategy on your behalf. Second, our partners compensate us. This may influence which refinancing lenders we write about, but it doesn't affect our recommendations or advice. Our partners cannot pay us to guarantee favorable reviews of their products or services.Updated September 2026. The Peace Corps does not forgive or pay off student loans itself. Full-time Peace Corps volunteer service counts as qualifying service for Public Service Loan Forgiveness (PSLF), so each month you serve can count toward the 120 payments PSLF requires. The Department of Education forgives the remaining federal balance after 120 qualifying payments. Perkins loans can also be partly cancelled for service, up to 70% over four years.
Service months can count toward PSLF. They count whether you make income-driven payments or take the economic hardship deferment for Peace Corps service, unless you are enrolled in the Repayment Assistance Plan (RAP), where only payments count.
You certify service through the RPCV Portal. PSLF forms go to certify@peacecorps.gov.
Perkins cancellation is separate. It runs 15% for each of your first two years of service and 20% for each of the next two.
Private loans get no Peace Corps benefit. Any relief depends on your lender.
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Advertiser Disclosure
You're our top priority.
We want you to be able to make decisions about your student loans with confidence. We offer objective, independent, straightforward guidance on student loans and refinancing lenders. While our site doesn't answer every question or have every lender, we are proud to provide the information and tools you need — free of charge — to make the best decisions for yourself. So how do we make money? We get paid in two ways. First, you can hire us to develop a student loan strategy for you and implement that strategy on your behalf. Second, our partners compensate us. This may influence which refinancing lenders we write about, but it doesn't affect our recommendations or advice. Our partners cannot pay us to guarantee favorable reviews of their products or services.Does the Peace Corps Forgive Student Loans?
No. The Peace Corps states that it cannot grant or deny student loan deferment, cancellation, or forgiveness. The Department of Education decides for federal loans, and your lender decides for private loans. You remain responsible for your loans while you serve.
Peace Corps service makes you eligible for three federal benefits:
PSLF credit. Federal rules treat a full-time assignment under the Peace Corps Act as qualifying PSLF service, the same way they treat work for a government or nonprofit employer.
An economic hardship deferment. Peace Corps service is one of the listed grounds, so you can pause federal loan payments during your service.
Perkins cancellation. Part of a Perkins loan is cancelled for each full year you serve.
To keep paying while abroad, you can withdraw up to 75% of your monthly service award (the readjustment allowance) early to pay bills. These withdrawals start after training and swearing-in, about three months into service.
Related:
How PSLF Works for Peace Corps Volunteers
PSLF forgives your remaining federal student loan balance after 120 qualifying monthly payments made while you work full-time in qualifying public service. A full-time Peace Corps position counts as that service.
Qualifying service. You must be serving in a full-time Peace Corps position, or working full-time for another qualifying employer, when you make your 120th payment and when you apply for forgiveness. Qualifying payments don’t need to be consecutive. Months from your Peace Corps service still count if you later leave public service and return.
Loan type. Only federal Direct Loans qualify. FFEL and Perkins loans become eligible only if you consolidate them into a Direct Consolidation Loan. A consolidation made on or after July 1, 2026, is a new Direct Loan, which closes Income-Based Repayment (IBR), PAYE, and ICR to all of your Direct Loans and ends Perkins cancellation on any Perkins loan you consolidate. Learn more in our Student Loan Consolidation Guide.
Qualifying repayment plan. Payments count under IBR, RAP, or the 10-year Standard plan. PAYE and ICR payments count only if they’re received by June 30, 2028. If you have a Direct Loan disbursed on or after July 1, 2026, RAP is the only plan that counts. The SAVE Plan has ended. See which repayment plans qualify for PSLF.
Full, on-time payments. Starting July 1, 2026, a payment counts only if you pay the full amount on your bill by the due date.
How to certify your Peace Corps service
Returned volunteers request a certification of service through the RPCV Portal before filing a PSLF form:
Create an RPCV Portal account. Request an account using the name you used during your Peace Corps service, which reduces delays.
Verify your details. Log in and confirm your contact information and service dates. Certification documents go to the email address in the portal.
Select the certification. Choose the certification you need from the drop-down menu.
Allow processing time. Requests take 7–10 business days.
To complete the PSLF form itself, use the PSLF Help Tool on studentaid.gov and choose the digital signature option for your employer. Then send the form to the right Peace Corps address:
Volunteer service (current and returned volunteers): email your PSLF form to certify@peacecorps.gov.
Peace Corps staff service: email your PSLF form to payrollandbenefits@peacecorps.gov.
If you served both as a volunteer and on staff, send a separate form to each address.
Your Loan Payment Options During Service
While you serve, you can either defer your federal Direct Loans or keep making income-driven payments, and both can build PSLF credit.
Economic hardship deferment. Peace Corps service qualifies you for this deferment, which pauses payments for your term of service, within the deferment’s three-year lifetime limit. Deferment months during Peace Corps service count toward:
PSLF, unless you are enrolled in RAP during those months.
IBR, PAYE, and ICR forgiveness.
RAP’s 30-year forgiveness period.
Interest does not accrue on subsidized loans during deferment. It does accrue on unsubsidized loans, and unpaid interest is added to your principal when the deferment ends. Loans disbursed on or after July 1, 2027, are not eligible for this deferment.
Income-driven payments. You can enroll in an income-driven plan and keep making payments during service. Your payment is based on your income, so it may be $0 on IBR. RAP has a $10 minimum payment and waives the interest your on-time payment doesn’t cover. Each full, on-time payment you make while serving full-time counts toward PSLF.
Perkins loans can also be deferred during Peace Corps service; contact the school or servicer that holds your Perkins loan.
Related: Does Forbearance Count Towards PSLF?
Using your readjustment allowance to pay ahead
You can use your readjustment allowance at the end of service to prepay federal loans. Prepayments can earn PSLF credit for future months, within limits:
On an income-driven plan, a prepayment counts for PSLF only up to your next annual recertification date.
On the 10-year Standard plan, it counts for up to 12 months or until you submit your next PSLF form, whichever comes first.
On RAP, paying ahead moves your due date forward, and months without a due date lose RAP’s interest waiver and $50 principal match. You can tell your servicer not to advance your due date. The Department of Education has said it will publish more guidance on how extra payments work under RAP and PSLF.
After the payment posts, confirm your servicer applied it as a prepayment.
IDR Forgiveness If You Leave Public Service
Income-driven repayment (IDR) forgiveness doesn’t depend on your employer. It forgives your remaining federal balance after the plan’s full repayment term, so it still applies if you move into private-sector work after the Peace Corps.
The term depends on the plan:
RAP: Payments run 1% to 10% of your adjusted gross income, with a $10 minimum. The remaining balance is forgiven after 30 years of qualifying payments. Learn more about the Repayment Assistance Plan.
IBR: Forgiveness comes after 20 years if you were a new borrower on or after July 1, 2014, or after 25 years otherwise. Related: How Do Student Loans Calculate Discretionary Income?
PAYE and ICR: Both plans end by July 1, 2028.
New borrowing closes the older plans. If you take out a new Direct Loan on or after July 1, 2026, including a new consolidation loan, IBR, PAYE, and ICR close to all of your Direct Loans, leaving RAP and the Tiered Standard plan.
RAP months generally don’t count toward IBR. Months on IBR count toward RAP’s 30-year term, but RAP payments generally don’t count toward IBR’s 20- or 25-year term.
PSLF forgiveness is tax-free. IDR forgiveness granted after 2025 is generally taxable federal income. See what’s happening to IDR plans in 2026.
Related: Income-Based Repayment Forgiveness
Perkins Loan Cancellation for Peace Corps Service
If you have Perkins Loans that you haven’t consolidated, up to 70% can be cancelled for Peace Corps service. Each completed 12-month period of service cancels a share of the original principal, plus the interest that accrued that year:
First year: 15%
Second year: 15%
Third year: 20%
Fourth year: 20%
Partial years generally don’t count toward the next share. Request the Perkins certification through the RPCV Portal, then submit it to the school or servicer that holds your Perkins loan.
Consolidating a Perkins loan into a Direct Consolidation Loan ends its eligibility for this cancellation.
Other Options for Peace Corps Volunteers
Forbearance, PSLF Buyback, and refinancing each change how your federal loans are treated, and of the three, only buyback can add PSLF credit.
Forbearance. Forbearance pauses your payments, but a general forbearance month doesn’t count toward PSLF. The economic hardship deferment for Peace Corps service is a different status and does count.
PSLF Buyback. If you reach 120 months of qualifying service with gaps from deferment or forbearance, PSLF Buyback lets you pay for some of those months so they count. Months you spent on RAP or the Tiered Standard plan can’t be bought back.
Refinancing. Refinancing federal loans into a private loan ends your eligibility for PSLF, income-driven plans, and federal deferment.
What are my options if I have private student loans?
Private student loans have no federal forgiveness programs, and the Peace Corps benefits above don’t apply to them. Ask your lender whether it offers any relief during Peace Corps service. Your other options:
Settlement. You may be able to negotiate a settlement that reduces what you owe. Lenders generally negotiate only after the loan is in default, which damages your credit.
Bankruptcy. Private student loans can be discharged in bankruptcy if you prove undue hardship in a separate lawsuit within the bankruptcy case.
What Changed for Peace Corps Volunteers in 2026
The SAVE Plan ended by court order on March 10, 2026. On July 1, 2026, RAP opened, and new federal borrowing began closing the older income-driven plans. For volunteers, the changes are:
The SAVE Plan ended. Former SAVE borrowers choose a new plan or are placed in one. See how to pick your next repayment plan.
RAP launched. The Repayment Assistance Plan opened July 1, 2026, and its payments qualify for PSLF.
New borrowing closes the older plans. A new Direct Loan on or after July 1, 2026, including a consolidation loan, closes IBR, PAYE, and ICR to all of your Direct Loans, leaving RAP and the Tiered Standard plan.
Only full, on-time payments count. Late or partial payments no longer earn PSLF or IDR credit.
The economic hardship deferment is ending for new loans. Loans disbursed on or after July 1, 2027, can’t use it.
For the full picture, see PSLF changes in 2026.
Related reading:
FAQs
Does the Peace Corps pay off student loans?
No. The Peace Corps doesn't pay off or forgive student loans. Full-time volunteer service counts as qualifying service for Public Service Loan Forgiveness, which the Department of Education grants after 120 qualifying payments. Perkins loans can also be partly cancelled for service.
Does the Peace Corps count as federal service?
Yes. PSLF rules treat a full-time Peace Corps position as qualifying service. Peace Corps service also qualifies you for an economic hardship deferment on federal loans and for partial Perkins loan cancellation.
What are the eligibility requirements for Peace Corps student loan forgiveness?
For PSLF, you need federal Direct Loans, 120 qualifying payments under a qualifying plan such as IBR, RAP, or the 10-year Standard plan, and full-time qualifying service when you make your 120th payment and when you apply. For Perkins cancellation, each completed year of service cancels 15% or 20%, up to 70% over four years.
Can I defer my student loans during Peace Corps service?
Yes. Peace Corps service qualifies you for an economic hardship deferment on federal Direct Loans for your term of service, within the deferment's three-year lifetime limit. Loans disbursed on or after July 1, 2027, can't use it.
Does deferment during Peace Corps service count toward PSLF?
Yes, unless you are enrolled in the Repayment Assistance Plan during those months. Economic hardship deferment months count toward PSLF, and they also count toward IBR, PAYE, ICR, and RAP forgiveness.
Can I use my readjustment allowance to pay ahead for PSLF?
Yes, within limits. On an income-driven plan, a prepayment counts for PSLF only up to your next annual recertification date. On the 10-year Standard plan, it counts for up to 12 months or until your next PSLF form, whichever comes first.
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