How to Get Paid for Community Service
Public-spirited students can get paid for community service in many ways, including Federal Work-Study programs, education awards earned through AmeriCorps and federal student loan forgiveness for full-time public service work. There also are scholarships for community service.
Federal regulations require colleges to use at least 7 percent of their Federal Work-Study funding allocation to pay college students employed in community service jobs, such as reading tutors and family literacy efforts.
Students who are interested in community service jobs are more likely to receive Federal Work-Study funds because of this requirement.
According to data provided by the U.S. Department of Education in response to a Freedom of Information Act (FOIA) request filed by Cappex, $151.4 million, or 15.6 percent, of the $973.2 million in Federal Work-Study funding in 2015-16 was devoted to community service jobs.
Most colleges and universities succeed in fulfilling the community service requirement. However, 4.5 percent of colleges and universities participating in Federal Work-Study received a waiver of the requirement to use at least 7 percent of their Federal Work-Study funding for community service jobs.
Education Awards from AmeriCorps and Peace Corps
Volunteers with the AmeriCorps and Peace Corps programs can receive an education award for each year of volunteer service. Education awards can be redeemed to pay for college or to repay federal student loans.
Education awards for a year of full-time volunteer service are the same as the maximum Federal Pell Grant. Education awards are prorated for part-time volunteer service. Volunteers can receive up to two full education awards and must use them within seven years. Some colleges will match education awards.
Since a year of full-time volunteer service involves 1,700 hours during 12 consecutive months, an education award pays the equivalent of less than half the federal minimum wage. This is in contrast with Federal Work-Study jobs, which pay at least the federal minimum wage.
Education awards are treated as taxable income when used.
Public Service Loan Forgiveness
The Public Service Loan Forgiveness program forgives a borrower’s remaining federal student loan debt after 10 years of full-time employment in a public service occupation. The loans must be repaid in an income-driven repayment plan in the federal direct loan program. The 120 monthly payments do not need to be consecutive. The forgiveness is tax-free.
The loans also can be repaid in the standard repayment plan. But, since standard repayment has a 10-year repayment term, there would be no remaining debt to forgive after 120 payments under standard repayment. Standard repayment is beneficial for borrowers who no longer qualify for an income-driven repayment plan. In effect, it preserves the forgiveness that was earned previously under and income-driven repayment plan.
Public service jobs include working for city, county, state or federal government, military, public safety and law enforcement (including police, fire and EMT), public health, public education, public librarians, public interest law services, social work in public child or family service agencies, public service for disabled and elderly individuals, and 501(c)(3) tax-exempt charitable organizations.
Public service loan forgiveness is best for borrowers whose debt at graduation exceeds their annual income. The income-driven repayment plan makes the student loan debt more affordable for borrowers in a low-paying public service job, since it bases the loan payments on the borrower’s discretionary income, as opposed to the amount they owe.
Public service loan forgiveness cancels the remaining debt after 10 years, so that the borrower isn’t burdened by the debt for too long, despite the decision to pursue a low-paying public service career.