National Service Overhaul: Peace Corps & AmeriCorps Benefits Double, Student Loans Frozen During Service

The “A Chance To Serve Act” is a major upgrade for anyone who has served or is considering serving in the Peace Corps or AmeriCorps. If you’ve ever traded a paycheck for public service, this bill is designed to make that choice a lot less financially painful, both during and after your term.

The Peace Corps Upgrade: More Money, More Healthcare, and Faster Federal Jobs

For Peace Corps volunteers, the financial picture changes significantly. The monthly readjustment allowance—that savings pot you get when you finish service—jumps from $125 to a much more substantial $425 (SEC. 2). That’s a huge difference when you’re trying to restart your life after two years abroad. Plus, the Director must now adjust that amount for inflation, so it won’t lose value over time. On the job front, finishing your service now grants you three years of “non-competitive eligibility” for federal jobs, essentially giving you a fast-track pass into the civilian career service (SEC. 2).

Perhaps the biggest change is post-service healthcare. Former volunteers will now get access to VA healthcare for one full year after they return home, with the costs covered by the Peace Corps and the VA (SEC. 2). This is a critical safety net, ensuring you don’t lose coverage during that often-turbulent transition period. The bill also expands who can join, allowing lawful permanent residents to be recruited alongside U.S. citizens and nationals, opening up service opportunities to a wider pool of talent (SEC. 2).

AmeriCorps: Doubled Awards and Living Wage Mandate

AmeriCorps and other national service programs are also getting a massive boost. First, the bill mandates a minimum of 500,000 national service positions must be available, signaling a major expansion of the program (SEC. 3). Second, the financial support during service is getting a serious raise: the living allowance must now be at least 200% of the poverty line (SEC. 3). For someone currently relying on a meager stipend, this mandate ensures a much more stable financial footing while they serve.

The Segal AmeriCorps Education Award—that money you earn to pay for school or existing loans—is being doubled (SEC. 3). Not only is the award bigger, but you can also now use it to pay for obtaining a recognized post-secondary credential, making it more flexible for those pursuing trade certifications or specialized training outside of traditional four-year degrees (SEC. 3). Like Peace Corps alumni, AmeriCorps finishers also get that crucial three-year non-competitive hiring advantage when applying for federal jobs (SEC. 3).

The Game-Changer for Student Loans

Here’s the provision that might get the most attention from the 25–45 crowd juggling debt: If you have federal student loans, all payments are suspended, and no interest will accrue during your entire period of national service—whether Peace Corps or AmeriCorps (SEC. 2, SEC. 3). Even better, the Secretary of Education must treat every month of suspended payment as if you had actually made a payment. This means your service time counts directly toward the required 120 payments for Public Service Loan Forgiveness (PSLF) or other loan rehabilitation programs (SEC. 2, SEC. 3).

Furthermore, the bill formally adds service in both the Peace Corps and national service programs like AmeriCorps to the list of qualifying activities for PSLF, clearing up any ambiguity about whether that time counts toward the required 10 years of public service (SEC. 4).

No More Tax on Service

Finally, the bill addresses a long-standing complaint: the financial benefits of service shouldn't be taxed. It makes both the Peace Corps readjustment allowance and the AmeriCorps educational awards and living allowances exempt from federal income tax (SEC. 5). For a volunteer making tough financial choices, keeping that money tax-free is a significant boost to their real take-home benefit.