Investopedia Followup: Americorps, Peace Corps, and Personal Finance

October 09, 2007

Investopedia Followup: Americorps, Peace Corps, and Personal Finance

I wanted to add a few thoughts to my recent Investopedia article on Americorps, Peace Corps, and personal finance.

Choosing a school that doubles your $4,725 AmeriCorps education reward can make grad school very affordable. Some of the schools that offer to match AmeriCorps' education award are state schools, where $10,000 can buy you a year's worth of tuition once you are a resident of that state. If paying for grad school is an issue, completing one or two terms of service with AmeriCorps can really ease the burden, probably moreso than any traditional job you might get. After all, most people, particularly recent grads working for entry-level wages, cannot save almost $10,000 for school in a single year.

On the other hand, if you are considering a very expensive form of grad school like an MBA program, you would be better off financially if you got a job that offered the benefit of paying for your MBA.

If grad school isn't in your future, keep in mind that the award money can also be used for paying off existing loans or for other forms of educational training—not just grad school.

If you're on the fence about attending grad school, spending a year or two doing AmeriCorps or Peace Corps can give you some time to weigh this major decision before making an additional investment of time and money in your education. You'll also continue to live on student wages, which will prevent you from having to make the difficult adjustment from salaried worker to unpaid or barely paid student if you do choose to go back to school.

The decision to serve in one of these programs can certainly fall into a gray zone between emotion and reason in more ways than one. One thing you may not have already considered is that if all of your existing friends will have highly paid jobs while you’re volunteering, you might find it difficult both emotionally and socially to not be able to enjoy the same luxuries that they will be able to afford. In Americorps, you will probably make friends with other participants who have to live on the same income you do, so if you enjoy their company, your social life shouldn’t suffer too much. Your real friends will stick around regardless of whether you can afford to go out for sushi. In PeaceCorps, you won’t be interacting with people who have more money than you do, so you won’t have to worry about missing out on things for financial reasons. You will miss out on many things, though, because you’ll be on the other side of the world for two years.

Americorp’s website does not give specific amounts for the living allowance (I’m guessing because payment varies by job and because they don’t want to scare people off). I found over 100 current AmeriCorps job postings on Idealist.org. Here are a few of the listings which contained pay rate information. A search of current job postings for AmeriCorps positions shows that the average monthly wage tends to be in the $900 - $1000 range. Some pay closer to $800 a month, some pay closer to $1100 a month. Pay does not seem to reflect the actual cost of living in the job location. One of the highest pay rates was found in Harris County, Texas, which has one of the lowest costs of living in the country.

Photo by chchang

For more information, follow the links below.

Information on Peace Corps living allowance, payment, health insurance, and student loan assistance:

http://www.Peace Corps.gov/index.cfm?shell=learn.whyvol.finben

http://www.peacecorps.gov/index.cfm?shell=learn.whyvol.medicalben

Peace Corps and future employment:

http://www.peacecorps.gov/index.cfm?shell=learn.whyvol.profben

Peace Corps length of service

http://www.peacecorps.gov/index.cfm?shell=learn.howvol

Peace Corps FAQ

http://www.peacecorps.gov/index.cfm?shell=learn.howvol.topques#question4

Information on AmeriCorps living stipend and student loan assistance:

http://www.AmeriCorps.org/for_individuals/faq/index.asp#getpaid