Living On A Stipend, Part II: Peace Corps and Teach For America

Personal Finance
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Can you afford to change the world? Organizations like the Peace Corps and Teach for America offer hands-on, front line opportunities to enact positive change right out of college—but they come with a pretty small paycheck. If you were to pursue an opportunity with the Peace Corps or Teach for America, would you be prepared to live on a do-gooder’s pay?

While it’s a common misconception that Teach for America teachers are employed by TFA itself, they are actually employees of the school district where they teach. “Corps members are paid as full-time lead teachers in whatever school district they’re teaching,” said Lindsay Clochina, Teach for America’s Senior Managing Director of Midwest Recruitment. “There’s no difference in salary just because they’re a corps member.” According to Clochina, these salaries can range anywhere from $25,500 to $50,000.

To help newly financially independent corps members survive on their new salaries, Teach for America offers multiple financial planning tools, such as the regional cost calculator, which provides information such as monthly take home pay, gas, and insurance costs. To help with moving and teaching certification costs, TFA offers “transitional” interest-free loans and grants. In 2012, 59% of the Teach for America corps received funding, with an average grant of $1,294. They also provide additional financial planning advice: “They were very clear about how to get student loans deferred,” said a Houston-based TFA teacher, “and how to enroll in AmeriCorps in order to be eligible for graduate school grants.” [Teach For America is currently a member of AmeriCorps, the national service network. Through this relationship, TFA corps members who have not served previously as AmeriCorps members are eligible AmeriCorps benefits like loan forebearance and an education award which may be used for future educational expenses or to repay qualified student loans]

The Peace Corps system is very different than Teach for America; they provide their volunteers with a salary intended only for the essentials necessary to live like the locals, along with full medical and dental benefits. If you’re worried about paying off your undergraduate loans while overseas with the Peace Corps, you can also defer your student loans for a maximum of 27 months; however, you can only defer the principal of the loan, so you’ll have to continue making your interest payments. When you return home after 27 months, the Peace Corps will provide you with $7,425 to help with the transition.

While you may struggle to make ends meet while volunteering for the Peace Corps, your time there could definitely pay off in the future. According to Emily Dulcan, the Press Director for the Peace Corps, volunteers who complete two years of service have lifetime eligibility for financial benefits at more than 70 U.S. graduate schools. Volunteers also receive one year of noncompetitive eligibility for employment in the federal government—if you meet the minimum qualifications for a position, you can be hired without having to go through the standard competitive process. Teach for America also has partnerships with companies and graduate schools that allow corps members to defer jobs and enrollment as well as exclusive internship opportunities.

If your goal when you graduate college is to make lots of money, working for Teach for America or the Peace Corps might not be the best choice for you. However, if you want to gain some perspective and do some good for the world before you embark on your corporate climb, you may want to consider a few years in a public service program. If you’re inclined to sacrifice your earnings a little in order to learn a lot, you’ll be in good company: “The majority of people who join Teach for America are not joining for the money,” says Clochina. “It’s the mission and the potential for impact that people are most attracted to.”