Should I take my loans out of forbearance and enter into IBR?

This depends upon many variables, including: * the length of time you have been in repayment status; * the size of your loan; * the amount you would pay each month under IBR; and * your future employment plans. Interest accrues on your student loans while they are in forbearance. Interest also accrues on your loans if you are repaying them, but the amount you pay each month isn't enough to cover the interest that accrued the previous month. Thus, interest will accrue on your loans while being paid under IBR if your monthly payments are too small to cover the accruing interest (which, unless you are making payments equal to what you would pay under a 10-year standard repayment plan, is likely). For example, say you owe $10,000 on a qualified student loan, and you pay nothing on that $10,000 for the 12 months of AmeriCorps service (either because your loans are under forbearance or because your IBR monthly payment is $0). At the end of your term of service you will owe more than when you started because interest will have accrued on your $10,000 loan. As a benefit of AmeriCorps service, AmeriCorps will pay for any interest accrued on qualified student loans in forbearance during your AmeriCorps service out of the National Service Trust if you successfully complete your term - regardless of whether the loan is subsidized or unsubsidized and regardless of the length of the time the loan has been in repayment status. In other words, if you had put your qualified loan in forbearance, all of the interest that accrued on your $10,000 loan from the example above would be paid for AmeriCorps, so you would essentially leave AmeriCorps service owing the same amount as when you started. However, because you did not make any qualifying payments on your loan while it was in forbearance, the 12 months of service will not count towards PSLF. On the other hand, if you made payments under IBR, the Secretary of Education will pay the interest that accrues on loans due to too-small payments under IBR. However, the Department of Education's payments on accrued interest only apply to subsidized loans and the subsidized portion of a Federal Consolidation loan, and are only available for the first three years your loans are in repayment under IBR. (See 34 CFR § 682.215(b)(4)). So, if you take your loans out of forbearance to use IBR, and your loans are unsubsidized or more than three years have passed since you began repaying the loans, and your IBR payments are not large enough to cover accruing interest, you may finish your AmeriCorps service owing more money than you did when you started. That said, if you intend on pursuing a career in public service, you have a large loan, and you expect that you will have a small income, the amount that may be forgiven after 120 qualifying payments may be significant. In such case, it may be worth it for you to put your loans into IBR while serving in AmeriCorps - even if using IBR means that you finish your service with more debt than when you started - so that you can start working towards the required 120 payments as soon as possible. To determine whether you should put your loans into forbearance or use IBR while in AmeriCorps, you should contact your loan holder for guidance. You may also wish to consult with a financial aid advisor or a parent or mentor, work with the calculators available on , and use the many resources available on the Department of Education's . The regulations regarding payments from the National Service Trust on interest accrued on loans in forbearance during AmeriCorps service can be found at finaid.orgDirect Loan website45 CFR Part 2529. Information on forbearance during AmeriCorps service can be found on our website. If you cannot find an answer about payments on accrued interest from the National Service Trust, you can contact the Trust at 1-800-942-2677.