THE SEGAL AMERICORPSEDUCATION AWARD

Education Award Basics

AmeriCorps members have 7 years to use the Education Award

Several ways to use it: Repay qualified student loans Pay toward cost of attendance at qualified

institutions of higher education A combination of the two

Unlike most other scholarships and fellowships, it is fully taxable in the year it is redeemed

Education Award Amounts

Full-time term of service: $4,725

If you serve at least 15% of your term and leave for compelling personal circumstances, you may be eligible for a pro-rated award based on the number of hours completed

Eligibility

You are eligible for a Segal AmeriCorps Education Award if you successfully complete a term of service, in accordance with your member contract, with AmeriCorps* State and National, VISTA, or NCCC

You must have received a high school diploma or the equivalent

AmeriCorps members are only eligible to receive TWO awards, regardless of whether the term of service was full- or part-time

Using the Award

The award can be used any time after it is activated on MyAmeriCorps (about two weeks after you are exited from the program)

It can be used up to 7 years after the date you end your term of service

Award can be divided up and used in portions It is possible to apply for an extension (before

the end of the 7 years) if: You are unable to use the award during that time You perform another term of service in an

approved program

Limitations

Award cannot be transferred to any other individual

Payments cannot be made to anyone other than qualified schools and loan holders

If you withdraw from school, the institution may be required to refund the award

Under certain circumstances, the award can be used to study outside the U.S.

“Qualified” Student Loans

National legislation defines qualified loans as loans backed by the federal government under Title IV of the Higher Education Act, or under Titles VII or VIII of the Public Health Act

Can also be used for loans made by state agencies, including state institutions of higher education

Loans can be defaulted, as long as they are qualified loans

Cannot be used for any other loans, including private or Parent PLUS loans

Examples of qualified loans

Stafford Loans Perkins Loans William D. Form Direct Loans Federal Consolidated Loans Supplemental Loans for Students Primary Care Loans Health Education Assistance Loans Nursing Student Loans

Current Education Expenses

“Cost of Attendance” for a degree- or certificate-granting program of study at a qualified school “Cost of Attendance” may include tuition, books

and supplies, transportation, room and board, and other expenses, as determined by the school’s financial aid office

Continuing education courses at qualified schools

Qualified schools are Title IV institutions of higher education Includes most colleges, universities, and

graduate schools

Interest Accrual

AmeriCorps members who have earned an Education Award are eligible to have up to 100% of the interest that accrued on qualified student loans during their service paid.

Lender must complete the Interest Accrued During National Service Form, which indicates the amount accrued

If you fail to complete your term of service, the interest will not be paid off

Which Loan?

If you have more than one loan, it may be best to pay off the loan with the higher interest rate first

“Unsubsidized” loans have been gathering interest while you were in school, so should be prioritized

Perkins Loans are typically the “best,” so it may be best to pay them off last

Consolidating Loans

It may be possible to get a better interest rate by consolidating one or more “old” student loans

Things to keep in mind: Make sure the “new” loan is qualified, so that

you can use your Education Award to pay for it If you are consolidating during your term of

service, call the National Service Trust, so that they can ensure that the interest will be paid

Read the fine print – there may be fees that will end up costing more than the original interest

Other Loan Benefits

Public Service Loan Forgiveness You can have student loan debt wiped

away after ten years of working with a non-profit and making steady student loan payments

Income-Based Repayment Plan Loan payments can be significantly

reduced if you are earning a low income

Matching Institutions

Some institutions of higher education will match the Segal AmeriCorps Education Award, doubling the amount of the award to $9,450

A list of schools is available on the AmeriCorps web site, and includes: 20 schools in New England Graduate programs in public service, social

work, business, law, and education

Taxes

The Education Award, unlike most scholarships and fellowships, is subject to Federal taxes in the year it is used Living allowances/stipends and any interest

paid by AmeriCorps on your loans during your term of service are also taxable

Taxes are NOT automatically deducted from the Education Award or interest payments In the year(s) you use the award, you will be

mailed a Form 1099 to use while preparing your tax return

Taxes on Stipends

The living allowance received in a calendar year is subject to income taxes in that year The portion of your stipend earned in 2009 will

be filed on your W2 for 2009 Goodwill will mail another W2 in January of

2011 for the stipend earned during the spring of 2010

Though you are responsible for the taxes on your Education Award and stipend, you may be eligible for tax relief The IRS and the Department of Education have

more information about potential tax credits

Taxes on Education Awards

In January following the year you use all or part of your Education Award, you will receive a 1099 The form can also be downloaded from the

MyAmeriCorps web site If you use $600 or less, a 1099 form will

not be created for you; however, you are still required to report any amount withdrawn from the award as income on your taxes

Paying Lower Taxes

If you move on from service and start a job in the $30-40,000 range, you will move into a higher tax bracket Using the Education Award over multiple

years may help to prevent you from bumping up a tax bracket

The interest you pay on student loans is often tax deductible

You can receive tax credits while in school Seek out other tax credits and deductions

How to Register for Your Award Before your end date (July 11, 2010), you

must complete and upload exit paperwork to the TRC web site so you can be exited from the program

By August 1, you will be able to access the Education Award in the My AmeriCorps Portal

Click on the link to register and follow the instructions sent via email Email will come from

epayments@americorps.gov and may go straight to junk mail

My AmeriCorps Portal

Within the Portal, you can control several things: Loan deferral Request payment of accrued interest Request payment of qualified student loans Request payment of current educational expenses Certify status as an AmeriCorps member Check the balance of the Education Award Extend the expiration date of your Education

Award View the status of pending requests Submit applications to AmeriCorps programs

•Many institutions are already connected to The Trust online.

•You search for your lender to request interest accrual payoff at the end of your term, no earlier than a month before the end of your term.

•Directions to request Ed Award are also the same.

How does the payment process work?

Good luck!