Economic Hardship Deferments for Peace Corps Volunteers

The U.S. Department of Education (ED) recently issued a Dear Colleague Letter (DCL) regarding regulatory changes that make it easier for Peace Corp volunteers to apply for economic hardship deferments on their Federal student loans. Borrowers, who are not eligible for a loan deferment or cancellation based on service in the Peace Corps, qualify for economic hardship deferments because of the low monthly income received from the Peace Corps. Until the changes can be finalized and become effective, ED is waiving enforcement of the current regulations and providing interim procedures which are effective immediately.

Due to the unique circumstances of Peace Corps assignments, volunteers who would like to apply for an economic hardship deferment may simply provide the loan holder with a signed and dated economic hardship deferment form and documentation from the peace Corps showing the borrower will be serving as a volunteer. Loan holders are authorized to grant the deferment for the full term of the Peace Corps service, shown on the Peace Corp certification form, up to the statutorily mandated maximum of three years.

Any questions regarding these new procedures can be directed to ED's Policy and Development Division at (202) 708-8242. A copy of this DCL is available on ED's web-site at http://ifap.ed.gov.  If you are unable to access this web-site and would like a copy of the DCL, please contact Lynda Reid at (801) 321-7211. Any questions regarding this UHEAA Bulletin can be directed to the Policy and Training Department at (801) 321-7166.