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The Edward M. Kennedy Serve America Act made important changes to the Segal AmeriCorps Education Award, including increasing the amount of the award by tying its value to the maximum Pell Grant, expanding its available uses, and authorizing transferability of the award for certain individuals. While the Serve America Act goes into effect on Oct. 1, 2009, not all of the changes will go into effect on that date. Many new authorities, including expanded authority for the number of terms one may serve in an approved national service position, must undergo rulemaking before they go into effect.
To assist, here are some answers to frequently asked questions:
- When will the rulemaking be complete?
- For what purposes can the education award be used?
- What is the maximum amount of an education award that can be earned?
- Will the amount of the award change?
- When will a member be eligible to receive the new award amount?
- If I serve for less than a full-time term of service, how much will my education award be?
- Can I transfer my award?
- I heard that I can serve more than two terms. Is this true?
- Which colleges and universities are "qualified institutions"?
- What types of loans can the education award repay?
- Will the criteria for using your education award to repay student loans change?
- What are "current educational expenses"?
- When can you use your education award?
- Is the education award taxable?
- What about paying student loans during your term of service?
- Looking for your W-2?
- Whom do I contact with question about my Award?
- When will rulemaking be complete?
The Corporation is currently preparing a proposed rule, which is expected to be published for public comment this winter. Rules will be finalized in early 2010.
- For what purposes can the education award be used?
You can use your education award in the following ways, or a combination of them:
- to repay qualified student loans; or
- to pay all or part of the current education expenses to attend a qualified institution of higher education (including certain vocational programs);
- to pay expenses while participating in an approved school-to-work program.
Beginning with terms of service that start on or after Oct. 1, 2009, if you are an AmeriCorps member who is a veteran, you may be eligible to use your award to pay expenses incurred in enrolling in an educational institution or training establishment that is approved under the GI Bill. The process for using the educational award for this purpose, and the eligibility criteria for using the award, are forthcoming through rulemaking. Although the final rules and processes will not be available until next year, awards earned in terms beginning on or after Oct. 1 of this year may be eligible for this use.
- What is the maximum amount of an education award that can be earned?
Terms of service that were approved using 2009 funds (or earlier funds) will receive an award based on a full-time award amount of $4,725.
Beginning with terms of service that are supported with 2010 funds, the maximum education award value will be equivalent to the maximum value of the Pell Grant for the award year for which the national service position was approved. For terms of service supported with 2010 funds, this amount will be $5,350. Because approval of national service positions is managed differently for VISTA and NCCC members than for AmeriCorps State and National members, VISTA and NCCC members will be eligible for the new amount sooner than AmeriCorps State and National members. To confirm the award amount for which you are eligible, call your program or project sponsor. You may also consult this flow-chart.
- Will the amount of the award change?
The amount of the full time Segal AmeriCorps Education Award is based on the maximum amount of the Pell grant for the award year for which the national service position was approved. The amount of the award one may receive by completing a term in an approved national service position will change to correspond to the value of the Pell Grant, and may change every year. However, once an award is earned the value does not change to reflect changes in the value of the Pell Grant, and awards earned in prior years will not increase in value.
- When will a member be eligible to receive the new award amount?
Vista and NCCC members enrolling on or after October 1, 2009 will receive the new award amount. State and National members who enroll in a program supported by 2010 funds may be eligible for the new award amount, but should contact their program for details. 2010 funds will be awarded to AmeriCorps State and National programs next Summer, thus, AmeriCorps State and National member currently serving or enrolling in any position supported with 2009 funds will receive awards based on a full-time award of $4725. To confirm the amount of award for which you are eligible, check with your program or project sponsor. You may also consult this flow-chart.
- If I serve for less than a full-time term of service, how much will my education award be?
Part-time, reduced half-time, quarter-time, and minimum time terms will be pro-rated based on the value of a full-time award for that position.
- Can I transfer my award?
You will be eligible to transfer your educational award to your child, grandchild or foster child if you meet the following criteria:
- You were at least 55 when you enrolled;
- You began service on or after October 1, 2009; and
- You are serving in an AmeriCorps State or National program.
Only awards earned in terms beginning on or after Oct. 1, 2009, are eligible for transfer. For all other questions regarding transfers and the process for transferring an award, please inform members that further details are forthcoming through agency rulemaking.
- I heard that I can serve more than two terms. Is this true?
The Corporation is developing new term limits through rulemaking. New term limits are expected to go into effect in 2010. Currently the maximum number of terms that you can serve and earn an education award remains at two. You may not enroll in a third or subsequent term of service in an AmeriCorps program until our current rules have been changed.
- Which colleges and universities are "qualified institutions"?
You can use your education award at most institutions of higher education (including graduate and professional programs), as well as qualified vocational schools. An institution is considered qualified for the education award if it is a Title IV school, which means it has an agreement with the U.S. Department of Education making its students eligible for at least one of the federally backed forms of financial assistance (such as Pell Grants, Perkins Loans, Stafford Loans, National Direct Loans, and Federal Consolidated Loans). To make sure the institution you want to attend is qualified, check with the financial aid office to make sure the school is a "Title IV" institution before you make specific plans.
- What types of loans can the education award repay?
Most postsecondary loans that are backed by the federal government are qualified for repayment with a Segal AmeriCorps Education Award. Also, loans that are made by state agencies, including state colleges and universities are now qualified. Your lender should be able to tell you if your loan is qualified. Qualified loans include:
- Stafford Loans
- Perkins Loans
- William D. Ford Direct Loans
- Federal Consolidated Loans
- Supplemental Loans for Students
- Primary Care Loans
- Nursing Student Loans
- Health Education Assistance Loans
- Loans issued to AmeriCorps members by state agencies, including state institutions of higher education
- Will the criteria for using your education award to repay student loans change?
No, the criteria will remain the same.
- What are "current educational expenses"?
Current educational expenses are expenses that were incurred after you became an AmeriCorps member. Current educational expenses are based on:
- The "Cost of Attendance" for a degree or certificate-granting program at a qualified school and
- Educational expenses for non-degree courses, such as continuing education courses offered by qualified schools.
For credit or degree courses, the cost of attendance may include tuition, books and supplies, transportation, room and board, and other expenses. Each school's financial aid office determines a student's cost of attendance based upon standard U.S. Department of Education guidance.
- When can you use your education award?
You can use your education award up to seven years after the date you end your service. You can apply for an extension if:
- you are unable to use the award for some reason during that time that is outside of your control such as a serious illness; or
- you perform another term of service in an approved program.
To be considered for an extension, you must apply before the end of the seven year period.
- Is the education award taxable?
Yes. You will be taxed on your education award in the year you use it. For example, if you use all or part of your award for college in the fall of 2001, when you file your 2001 taxes, you must pay taxes on the portion of the award you used.
However, you may be able to take advantage of the Hope Scholarship Credit or the Lifelong Learning Credit. Those credits may provide you with significant tax relief. Both the Department of Education and the Internal Revenue Service have information on these tax provisions.
The Corporation for National and Community Service does not withhold taxes from the award. By the end of January the Corporation will send a 1099 Form to all AmeriCorps members who have made payments from their education awards and for whom interest payments have been made during the previous year totaling more than $600.00. The 1099 Form does not need to be included in your tax return, but it reflects the amount that the National Service Trust reports to the IRS as taxable miscellaneous income.
- What about paying student loans during your term of service?
You may be eligible for forbearance for your qualified student loans from your loan holder. During a period of forbearance, you do not have to make payments, although interest continues to accumulate on your loans. If your loans were in forbearance or other postponement, AmeriCorps will pay all or a portion of the interest that accrued on your qualified student loan during your service. This amount is in addition to your education award.
- Looking for your W-2?
W-2s are used to report to the IRS that portion of your living allowance that is taxable. It is not for reporting on the amount of the education award you used. An IRS form 1099 is used for that purpose and it is available online by going into your account in My AmeriCorps.
AmeriCorps State and National members will receive their W-2 from the program where you served. AmeriCorps VISTA and AmeriCorps NCCC members will receive their W-2 from the Corporation for National and Community Service.
If you have not received your W-2 or need a duplicate:
- AmeriCorps VISTA members contact the Corporation State Office in which you served
- AmeriCorps NCCC members send an email to anccc@cns.gov
- Whom do I contact with questions about my Award?
Please contact the National Service Trust AmeriCorps Information Hotline at 1-800-942-2677. The Hotline is staffed by live operators from 8:00-6:00 EST.
For duplicate vouchers, and to report a change of address, you can e-mail epayments@americorps.gov.
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