AmeriCorps Education Award

Uses - Educational Benefits - Tax Information - Financial Aid - Other Resources

After successfully completing a term of service, AmeriCorps members who are enrolled in the National Service Trust are eligible to receive an education award. The education award can be used to pay education costs at qualified institutions of higher education or training, or to repay qualified student loans. The award is currently $4,725 for a year of full-time service, with correspondingly lesser awards for part-time and reduced part-time service. (Click here for more information about part-time service amounts.) A member has up to seven years after his or her term of service has ended to claim the award, and each member may earn only two awards.

The Office of the National Service Trust manages all the various functions related to the Education Award. If you have questions or problems with your Education Award, you can contact the toll-free information line at 1-888-507-5962. Trust specialists are on hand from 8 a.m. to 6 p.m. EST Monday through Friday.

Uses

You can use your education award in any of the following ways, or a combination of them:

Repay qualified student loans

The national service legislation defines "qualified student loan" as a loan backed by the federal government under Title IV of the Higher Education Act (except PLUS Loans to parents of students), or under Titles VII or VIII of the Public Health Service Act. In addition, you may use your education award to repay a student loan made by a state agency, including state institutions of higher education. Education Awards cannot be used to repay any other type of loan, even if the loan was obtained for educational purposes. You can use your education award to repay defaulted student loans, as long as the loans meet the definition of "qualified student loan." Some of the most common federal qualified student loans are:

• Stafford Loans
• Perkins Loans
• Federal Direct Loans
• Supplemental Loans for Students (SLS)
• Federal Consolidated Loans
• Health Education Assistance Loans (HEAL)
• Health Professions Student Loans (HPSL)

Pay current educational expenses at a qualified school

"Current educational expenses," as authorized under 42 U.S.C. § 12604(c), include:

• The Cost of Attendance (tuition/fees, room and board, books, supplies, transportation, loan fees, miscellaneous expenses and the one-time purchase of a a computer) for a degree- or certificate-granting program of study at a qualified school; and
  
• Educational expenses for non-degree courses offered by qualified schools, such as continuing education courses.
  Your school is qualified if it is a Title IV institution of higher education, as defined in section 101 of the Higher Education Act of 1965, as amended (20 U.S.C. 1001). This includes most colleges and universities.

To determine if your school is an eligible institution, ask your financial aid administrator, visit the US Department of Education's listing of Title IV schools, or call the Federal Student Aid Information Center at 800-433-3243.

Pay current educational expenses while participating in an approved school-to-work program.

Educational Benefits

AmeriCorps members who are earning an education award are uniquely eligible for one type of postponement of the repayment of their qualified student loan called forbearance. During this forbearance based on national service, interest continues to accrue. If you successfully complete your term of service and earn an education award, the Trust will pay all or a portion of the interest that has accrued on your qualified student loans during this period. This accrued interest paid by the Trust, like the education award itself, is subject to income taxes. Click here for more information.

Tax Information

• The Ed Award is claimed as other income on tax forms.
• Members will be issued a 1099-MISC with the amount of the award claimed (or spent) in the previous year.
• The amount paid by the National Service Trust toward student loan interest might be deductible. The IRS web site address this as Topic 456 - Student Loan Interest Deduction, and the following link includes a form to help determine the allowable deduction amount. Claiming the Deduction

• There are other Tax Benefits for Education which include deductions for money paid for tuition.

• Also consider avoiding singularly large tax bills by redeeming half the Ed Award one year and the other half the following year.

Financial Aid

Incredibly valuable information regarding Federal Financial Aid is available at Maximizing the value of the AmeriCorps education award. Here are a few tips pulled from that document.

• Apply early for financial aid by completing the Free Application for Federal Student Aid (FAFSA) in January or February of the year you plan to attend college.
• NOTE: Neither the Ed Award nor the Living Allowance a member earns should impact the Expected Family Contribution claimed on the FAFSA. This means anyone who earned an "AmeriCorps Award" which includes the Ed Award and the Living Allowance should fill out the "Income Exclusion Worksheet" or Worksheet C of the FAFSA and include the entire amount next to the question... "Student grant, scholarship, and fellowship aid, including AmeriCorps awards, that was reported to the IRS in your (or your parent') adjusted gross income."
• Because using the Ed Award to pay tuition may affect the amount of financial aid offered, consider using it to pay qualified student loans. In most cases, it is wiser to apply for federal aid before applying any portion of the Education Award toward educational expenses. Once a student has received an Award Letter from the Financial Aid Office, he/she may then decide to use part or all of the Ed Award, working with the financial aid counselor to see what the impact of using the award might be.

Other Resources

Check your Education Award Balance

Frequently Asked Questions

The Effective Education Award - pdf

Education Award Resources

National AmeriCorps Association

Notre Dame Mission Volunteers - AmeriCorps
403 Markland Ave.
Baltimore, MD 21212
Phone:(410) 532-6864 - Fax: (410) 532-2418

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