Peacecorps, Americorp, & PSLF

If you make a lump sum payment (meaning a payment larger than your regular payment) during the window of your PSLF payment, it will only count as one payment.  This is to keep people who have low IBR payments from making a bunch of payments up front whenever they may make a lot more income in the future.

Naturally there is always an exception.  In this case the exception is Americorp and Peace Corps.

Peacecorps volunteers receive a transition payment after completing their service while Americorp  volunteers receive the Segal Education Award after a year of service.  If you use some or all of these rewards to make a payment towards a qualifying loan, it will usually be larger than your installment amount.

This however is not a problem.  You can receive credit for up to 12 qualifying payments depending on the size of your award and your installment amount.  For example let’s say you award is for $1200.00.  If your payments are for $100.00 a month you would receive 12 qualifying payments.  If your payments are for $200.00 a month you’d receive 6 qualifying payments.  If your payments are for $50.00 you will still only receive 12 qualifying payments despite the fact your payment could cover 24 months.  In addition even if you do additional terms you can never have more than 12 qualifying payments under these programs.