Hi Heather,

I have written to you before on idealist.org regarding the application of a lump sum payment from Americorps to count up to 12 months toward PSLF. Someone must have sent a memo or something because now I have spoken to two folks with Direct Loans who recognize that this is possible! This is progress because for almost two years I was told repeatedly that no lump sums of any kind are permitted- ever! However, now that I am free to apply my 12-month lump sum payment, I realize that this will not ‘add’ to my 120 payments. As in, I currently work full-time for a nonprofit, make income-based payments on my Direct Loan and so on. So, when I apply my Americorps Award, I will only be covering the cost of my current payments, not adding to my 120 payments timeline. Does this make sense? I wish I could apply the TIME (24 months) rather than the money, but I’ve been told this is not possible. Can you confirm this? This is irritating because one of the reasons I didn’t consolidate sooner (while in Americorps) and begin payments (which would have been so low!) was because I was told over and over again I could not make lump-sum payments with my award and was distrustful of the program.

One good thing is that I can supposedly stretch my award for maybe more than two years, 12 months at a time (depending on my income and within seven years of being in Ameircorps). This is nice, of course, but it means that my time in Americorps (two years) does not count towards the ten. Is this true? Are there other things I should know about using my award as best as I can? Early on when my income is lower, etc.?

Thanks in advance for your response; I look forward to hearing from you.

If you elect to use your Education Award to make a lump sum payment on an eligible loan for which you are seeking public service loan forgiveness, the Department of Education will consider you to have made either (1) the number of payments that would result from dividing the amount of the lump sum payment by the monthly payment amount you would have made under your selected repayment plan; or (2) twelve payments – whichever is less.  Read through the examples included in the AmeriCorps FAQs: http://www.americorps.gov/pdf/08_1210_ccraa_faqs.pdf  to decide what will be best for you.