Volunteer or Work Your Way Out of Debt: The Collegiate’s Choice

Image courtesy of SponsorChange.org. Title image courtesy of takepart.com

Volunteer work can have several payoffs; making new friends, learning new skills, shaping your career, even paying off student loans. Yes that’s right; giving back to your community can now erase college debt. Non-profit organizations like SponsorChange.org, Zerobound, AmeriCorps and the Peace Corps are prepared to give college graduates dental and health insurance, a living allowance, and medical coverage as well as cash to go towards student loans as payment for a fixed amount of time spent volunteering. These organizations sound too good to be true, but is volunteer work really a better option to erase student debt than getting a job and paying off loans the traditional way?

Organizations like SponsorChange.org and Zerobound wanted to increase volunteer service, so they targeted college students, graduates and alumni by pledging they would help cut down student debt.

Volunteers with college debt first create an online profile specifying their skills and interests on SponsorChange.org or Zerobound’s websites and apply for volunteer projects listed. SponsorChange.org connects struggling non-profits with collegiate volunteers and then fundraises to pay for a specific project to be done.

Zerobound on the other hand, talks to volunteers first and asks them how much money they want to raise and which opportunities interest them. Then they recruit sponsors to support the volunteer’s labors. These groups earn money through fundraising efforts where they reach out to philanthropist sponsors who invest in volunteers to get a job done; so it’s basically a Kickstarter system but for volunteer work.

SponsorChange.org is limited to Washington D.C., Chicago and Philadelphia but Zerobound is accessible in several places in the U.S.

“While I’m job hunting I would probably do SponsorChange.org or Zerobound because they are free-lance opportunities that I would rather commit too,” said third-year animation SCAD student Kara Robson.

SCAD writing student Kevin Behan, who is graduating in four months, views volunteer organizations like these as a treatment for college loan forgiveness but not the solution. 

“I think it’s a good idea but most college debt has to do with people understanding how much debt they are accruing while in college. That’s something we need to blame the education system for,” Behan remarked. “I have a friend who graduated with a degree in video game planning and $60,000 in debt and now he works in an IT position. Scholarships are a better way to plan for dealing with your debt. Don’t burn through your money and take your time in college.”

SponsorChange.org volunteers can receive up to $1000 for each project they complete and there is no limit to how many projects you can undertake at a time. Zerobound volunteers can crowdfund as much money as they need depending on how many sponsors they secure and you are allowed to reach out to friends and families. These projects typically require 40-50 hours of work. Neither of these organizations subject volunteers to tax payments but Zerobound takes a 2.9% processing fee, a $0.30 transaction fee, a 5% service fee on funds raised for successful projects and an 8% fee if volunteers don’t complete a project.

 “I’d do the volunteer work unless I have a job or internship lined up,” Behan reasoned. “I can work on my portfolio while working because as a writer, you don’t need as much money to live on and I don’t need that many supplies. So it would be great to have these organizations pay for my lifestyle for a certain amount of time.”

If a college student was looking for a stronger commitment to volunteer work for student loan forgiveness, AmeriCorps and the Peace Corp are definitely superior options.

AmeriCorps has been providing volunteer service opportunities for young adults for over 20 years through several branches like AmeriCorps NCCC, AmeriCorps VISTA and AmeriCorps State and National. They offer the Segal AmeriCorps Education Award which provides full-time volunteers $5,775 after 1700 hours of work completed in a year to be used towards student loan payments. There are also half-time, reduced half-time, quarter-time and minimal time amounts and participants can earn up to two full-time education awards to use seven years after each award was earned. They also allow you to split up your money between undergraduate and graduate loans or possibly have your loans absolved during service.

On top of the money towards student loan payments, AmeriCorps offers volunteers training, a living allowance and health insurance because of the longer time commitment.

“If I had a guaranteed job lined up after college I would work a few years with AmeriCorps or the Peace Corp. It’s similar to going into the army but the benefits outweigh the work,” said fourth-year UGA biology student Zachary Futch.

Bailey Ramsford, a third-year music business major from UGA, was more cautious about the bigger investment required with AmeriCorps and the Peace Corp.

“My job relies heavily on popular culture change and technology changes, so I would be concerned that if I volunteered with the long-term organizations for a few years, then the whole music industry would change without me and it would be hard to get back into the swing of things even with a bachelor’s degree.”

The Peace Corps travel the world making a difference in education, health, youth development, agriculture, the environment and community economic development. Some volunteer candidates are eligible for student loan cancellation through Public Service Loan Forgiveness. However, even if you do qualify, you still have to make 120 timely payments and you won’t earn much money while with the Peace Corps. If you have a Perkins college loan, Peace Corps volunteers qualify for up to 70% of student loan cancellation after completing at least four years of service. Fortunately during their time, participants are offered $8,000 pre-tax payment after completion of service, full medical and dental coverage, a monthly living and house allowance, 48 vacation days and language and cross-culture training

“I like the Peace Corps because after college is the time to travel the world because you don’t have anyone to worry about except yourself,” said Jordan Di Pirro, a third-year SCAD television production major.

“It would get me out of the house and it would help me not be depressed trying to pay off loans through a side job,” she continued, “I get health benefits and vacation days and working for the Peace Corps is a great thing to put on your resume. Also, I’m on my parent’s health insurance until 26, so I don’t have to worry about that. After the Peace Corps I could do freelance volunteer work while job hunting.”

Some of these organizations are still growing while others have been around for dozens of years, but their shared goal of erasing student debt through community service is an exciting venture, though granted, with slow results.

Payscale’s highly optimistic 2015-2016 College Salary Report determined the median early career salary for a liberal arts and humanities major after college to be around 36K whereas the beginning salary for a business or engineering major ranged from 49-64K. Nevertheless, Georgia college students seem to be relieved that volunteering options to pay off student loans are available, but many were still hesitant about which was a better use of their time: volunteering or job hunting.

“I’d more be interested in finding a job and using this opportunity as a holdover, but it seems like a good thing to do if you have no other options,” Kevin Behan concluded.

Third-year Georgia State business and accounting student James Robison saw giving back to the community as a privilege, not as a tool to pay off student debt.

“The purpose of volunteer work is to give back without expecting anything in return,” he said. “If I volunteer with the intent on making money then what’s the point? If I’m looking to make serious money I should be out looking for a job in my field even if I have to do minimum wage work in the meantime.”

Other students were enthusiastic about these fresh opportunities to diminish college debt and wondered why there wasn’t more marketing out there to promote these organizations. 

“The good part about these options is if you don’t know what your next step is, this gives you time to think instead of doing traditional options like grad school or getting any job that fits the bill,” Jordan Di Pirro argued. “It doesn’t matter what major you have, even if you are guaranteed a career because you might be not ready to enter the workforce and this is a good way to do something with your time while you’re still discovering yourself.”

Not sure if volunteer work is the best way to pay off your student debt? Take this quiz to find out which path to student loan forgiveness is right for you.