How do I get my americorps moolah?

September 2, 2008 5:37 PM

LoanForgiveness Filter: I just completed my first year with AmeriCorps and come to find out that the student loan forgiveness benefit doesn't apply to my Plus loan. So, can I take out a student loan for my brother and use the AmeriCorps benefit on that?

So... after a year of working my butt off (and another year already started), I find out that my AmeriCorps loan forgiveness benefit doesn't apply to my college Plus loans. This is because my parents could get a better rate with a Plus loan from Sallie Mae than anything I qualified for, so rather than taking out a loan in my name, I just decided to let my parents take out what they could and agreed to pay them back. However, it turns out that AmeriCorps will only forgive loans that are in your name and Plus loans are (as far as I can tell) completely nontransferable.

So, since all my school costs were all financed by Plus loans, I was wondering if I could possibly take out a loan in my name for my brother (or co-sign?). He's in college now and I'd much rather have him get the money than let it go to waste.

So, in general, I'm wondering:
1. Can I take out a student loan for my brother? and have it paid off by AmeriCorps? How would I do this?
OR
2. Is there some way I can actually transfer the Plus loan to my name or strings I can pull to get it paid off by AmeriCorps?

And if all else fails, any awesome ideas for what to do with the extra educational money besides grad school?

Thanks!

posted by karyotypical to work & money (5 comments total)

Nope. Nothing you can do. Sucks.

You can use the educational award for all kinds of fun things though...laptops, welding classes, CPR, get your EMT or your WFR, find a conference to go to in Alaska---whatever.

Has to be YOU, has to be "educational."
posted by TomMelee at 5:53 PM on September 2, 2008

Are you an AmeriCorps VISTA? I know it's a whole lot less money, but you could always take the cash stipend instead of the education benefit.
posted by All.star at 6:18 PM on September 2, 2008

Nope, I'm in not in VISTA, as I'd definitely consider cashing out. Any suggestions on getting the PLUS loan switched over to my name since it is/was for my education and I am paying it off, although via my parents?
posted by karyotypical at 6:24 PM on September 2, 2008

You *could* try some sort of consolidation, but if it's not a federal program then Americorps will crap on it. Call them up...they can be helpful. Sometimes they're not. If you get someone not helpful, say thank you and hangup and call back.
posted by TomMelee at 6:38 PM on September 2, 2008

In a word: No. PLUS loans are loans your parents take out, not that you take out, and loan forgiveness does not apply there. The thinking behind the PLUS goes that it's a way for parents to pay for their kids to go to college, e.g. to meet the Expected Family Contribution requirements calculated in your FAFSA. It isn't designed as a way of enabling parents to use their credit to underwrite loans for their kids; if that's all they want to do, they can act as a co-signatory on one of the more traditional types of loans.

Consolidation is not an option, because as far as the bank and the government are concerned, you don't have any debt to consolidate. You can totally stiff your parents and there's not a thing anyone can do about it. Yes, that would make you a bad person, but there probably isn't anything legally binding between you. That's why loan forgiveness doesn't apply: nothing to forgive.

Though you probably can assume the debt from your parents, there isn't any good reason for you to do that for your purposes, as it would simply be a private loan, and thus ineligible for any kind of forgiveness program.

You can't take out any loans for your brother, as you aren't his parent and thus don't qualify for PLUS in his case, and any loans he takes out with you as a co-signer are his, not yours. As TomMelee put it, "Has to be YOU, has to be 'educational.'"
posted by valkyryn at 7:05 PM on September 2, 2008