On "Readjusting" After Peace Corps
With our departure date just about ready to pop around the corner, we've been trying to figure out our financial situation as far as student loans are concerned. We owe heaps, education is expensive. One of our loans happens to be a private student loan, which offers no mercy to Peace Corps volunteers - meaning the maximum amount of time one can request of deferment is one year. We will have to dig into our readjustment allowance to pay the monthly interest for the first year and then derfer them or, continue to pay interest throughout our Peace Corps service. I'm not even as excited about this so-called readjustment allowance as I used to be for two reasons:
1. Taxes are taken out, just as if you were working at any other job. Normally I wouldn't mind having to pay taxes, as they pay for good things such as schools, new roads, hospitals and very much-needed wars in Iraq (note the sarcasm in the last point). But we earn so much less per year than the average person in America working full-time job at minimum wage.
2. We will probably be deducting about $90-$100 per month to pay interest on that bugger of a loan that doesn't favour Peace Corps Volunteers.
This quote comes directly from the Peace Corps Yahoo Group:
A little over $4,500!!!!!! Subtract 24 interest-only payments of $100 dollars each and your total is $2,400, therefore leaving each of us with about $2,100, or $4,100 between the two of us. Talk about a shocker!Acutally, it ends up being LESS than $6000 because they take out
taxes. I think when all was said and done it was a little over
$4500...FYI
Well, on the positive side, $4,000 is better than nothing or getting malaria. It will be put to good use such as travel and finding a place to live in which ever part of the world we may be headed to after Peace Corps.
I remember being 14 and getting $40 a month for allowance was a lot. These days, a couple thousand gets a shoulder shrug or "I'll take that over nothing!".
4 comentarios:
I'm not sure how helpful this is, but if it's counted as income, they'll probably make you fill out a W-4 form to determine how much in taxes to take out. If you claim a greater number of allowances (say, 4 or 5) they'll take out fewer taxes (though you'll have to make up for that when tax time rolls around the next year). They'll still take out the same amount for Social Security and Medicare of course, but it might give you a few hundred extra bucks to work with in the meantime.
Remember you will also be receiving two PC "incomes" every month. The actual amount varies on the country or location in the country but it is a decent amount. Spend it wisely every month or every other month and you might be able to afford to pay the $90 intrest fee out of your monthly allowance.
Hmmm. Very good points! I will make mental notes :)
already thinking of the next step, huh? Smart girl !
This being said, I find interesting that you have to pay taxes on an income made OUT OF THE US. The rule for tax exemption is that you have to work 75% of the year out of the states. I would have thought you'd qualify.
Go figure!
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