The Student Coalition for Action in Literacy Education, at the University of North Carolina-Chapel Hill North Carolina LiteracyCorps Engage A program of SCALE, The Eli Segal AmeriCorps Education Award What is it? How do I use it?

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Initial Questions   How many of you are second year members?   How many are planning to do a second year of AmeriCorps?   How many are planning to go to school? Undergraduate or graduate school?   How many have filled out a FAFSA this year?   How many of you have no idea what you're going to do with your award?   How many of you are planning to repay loans with your award?

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps What specific questions do you have?   Tax implications   Loan forbearance and interest payments   Repaying student loans   Getting the best financial aid deal   Does the award expire?   Can I transfer my award to someone else?   What else can I use the award for?

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps How and when will I receive my education award?   You will be eligible for an education award once you have completed your minimum hours requirement AND you have completed all paperwork and program requirements.   You will not receive the money directly; the National Service Trust holds your award in trust in an online account until you request that it be paid to a loan holder or educational institution.   Full-time members receive $5,350.   Part-time members receive $2,675.   Minimum-time members receive $1,132.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps The Online Education Award Payment System  You should all have accounts already because it’s the same system you submitted your online application through.  In order to use your education award, you must register for an account through the MyAmeriCorps online payment system at You should all have accounts already because it’s the same system you submitted your online application through.   By logging into MyAmeriCorps and clicking on “My Education Award,” Members and Alumni can:   Update your contact information   Access, create, and submit forms to:   Have your student loans deferred during your term of service (Forbearance Request)

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps The Online Education Award Payment System   Request payment of the interest that accrued on your student loans during your term of service (Interest Accrual Benefit Request)   Request payment of qualified student loans (Education Award Payment Request)   Request payment of current Educational Expenses (Education Award Payment Request)   Extend the date of expiration of your Segal AmeriCorps Education Award (Award Extension Request)   View the status of your pending requests   Check your Segal AmeriCorps Education Award balance   View your account history

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Tax Implications   The Segal AmeriCorps Education Award, unlike most other scholarships and fellowships, is subject to federal tax in the year you have funds sent from your National Service Trust account to a school or lender. (If you use your award in 2010, you'll report it on the taxes you file by April 15, 2011.)   Hidden Tax Danger: Members who move on from service and start a job in the $30-40,000 a year range risk bumping themselves into a higher tax bracket when using their education award(s). If you are concerned about taxes, you might try using your award(s) over the course of multiple tax years.   Did you know that the interest you pay on student loans is often tax deductible? Did you know that you can get tax credits when going to school?

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Tax Implications   In January following the year you use all or part of your award, you will receive a 1099-Misc form in the mail. You can also download this from your My AmeriCorps account. This is an income-reporting form that you use when filling out your taxes.   IMPORTANT POINT: To receive your deductions or credits, you need to use Tax Form The EZ form will not allow you these options.   Unlike other types of employment income, you are NOT able to withhold a sum from your education award and use it to pay taxes.  If you use $600 or less, a 1099 form will not be created for you. However, according to the IRS, you are still obligated to report any amount withdrawn from your Trust account as income on your taxes. Even if it's just $5.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Repaying Student Loans with your Education Award   The laws surrounding the award allow members to repay "qualified student loans." For the most part, these include loans backed by the federal government (except PLUS Loans to parents of students).   You also 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. These include private loans and credit lines.   You can use your education award to repay student loans in default, as long as the loans meet the definition of "qualified student loan." (A loan goes into default after the borrower falls behind on payments and the loan holder sends default notices.)

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Which types of student loans can the education award be used for?  This list includes the types of qualified loans that Education Award funds can repay. If you are not sure what type of federal loans you have, check your loan paperwork or ask your lender. You cannot apply your award to Parent PLUS loans or private loans. Eligible loans include:  Stafford Loans  Perkins Loans  William D. Ford Direct Loans  Federal Consolidated Loans  Graduate PLUS Loans  Primary Care Loans  Nursing Student Loans  Health Education Assistance Loans  Loans issued to AmeriCorps members by state agencies, including state institutions of higher learning.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Paying for School  When you are sending Education Award funds to a school, the National Service Trust by law must send it in two equal disbursements: The first is immediate and the second gets sent at the middle of the enrollment period.  In other words, if you request $1,000 from your Education Award to be sent to your school, $500 will be sent when you request it. The school will receive the second $500 midway through the term or semester.  If money due to the school from your Education Award is due at the start of classes and doesn't arrive until later, you may rack up late payment charges. Work with your school to let them know that the funds are coming from an AmeriCorps Education Award account and are disbursed in this manner.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Paying for School  A nother strategy: If you are planning to use $1,000 per semester for two semesters, you might want to request $2,000 from your award to be sent to the school. That way, $1,000 arrives in time for the first semester to begin, and the second $1,000 is deposited into your account prior to the beginning of the second semester.  Understanding how the disbursement works is also important to know if you are using the award to purchase a computer or other educational equipment allowable under "cost of attendance." Half of the funds you request won't arrive until several weeks after classes begin, so plan accordingly!

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Interest Accrual Payments   In most cases, following a full time service term, the Trust will pay 100 percent of the interest after successful completion of service.   If you serve in a part-time position or receive a pro-rated education award, the total might be less than 100 percent.   You can use the formula on the next slide to determine how much the Trust will pay.   Here's what you'll need to know to use the formula:   How many service hours did you complete?   How many days were you enrolled in service?

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   According to the law, the percentage of accrued interest that the AmeriCorps will pay: is the lesser of:   (1) The lesser of the product of--   (i) The number of hours of service completed divided by the number of days for which forbearance was granted; and   (ii) 365 divided by 17; and   (2) 100   Here's an example for an AmeriCorps member who completed a 1,700 hour term in ten months (October-July):   [1,700 hours / 304 days = 5.59] X [365 / 17 = 21.47] = 120   Since 120 is greater than 100, AmeriCorps will pay off 100 percent of the accumulated interest on this member's student loans.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps If you want to tap into financial aid to attend college or graduate school, the FAFSA is the place to start.   FAFSA stands for the Free Application for Federal Student Aid. It can be filled out either online or on paper. It is completed annually by current and anticipating college students (both undergraduate and graduate) and sometimes their parents to determine eligibility for federal student financial aid (including grants, loans, and work-study programs).

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   You should fill out a FAFSA if you would like to receive financial aid and/or student loans at a Title IV school– basically any school that accepts U.S. funding, including many overseas schools. Usually, you fill out the FAFSA early in the calendar year if you plan to attend school in the upcoming school year. Check with the school's financial aid office for its priority deadline. Filling out the FAFSA before the deadline could help you get the best possible aid package.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps FAFSA   Hiding midway through the FAFSA, you'll find the question relevant to getting your AmeriCorps income to NOT count against you for financial aid.   On the paper version of the FAFSA, it's easy to find: Question 43D.   It’s trickier to find the question when filling out the FAFSA online. When you reach a screen labeled “Student Financial Information Continued,” you should see a number of check boxes. Click the checkbox next to the text, “Grants and scholarship aid reported to the IRS.” When you click the box, this text should appear:   Student grant and scholarship aid reported to the IRS in your (and your spouse’s) adjusted gross income. Includes AmeriCorps benefits (awards, living allowances, and interest accrual payments), as well as grant and scholarship portions of fellowships and assistantships.   Make sure you fill this out! It can help you get a better financial aid package than if you just leave it blank.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps  Though you won't get the satisfaction of doing the math yourself, when you submit your FAFSA, the financial aid office will subtract the amounts you list in this section. This gives you a lower adjusted gross income.   This matters to AmeriCorps members because it asks you to fill in from the previous tax year:   any living allowance income you received   any portion of your education award you used   any interest payments made by the National Service Trust on a qualified student loan.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   In other words, if your only source of income in the previous calendar year is $9,000 from AmeriCorps, then for financial aid purposes your income is $0, and you potentially could receive a better financial aid package than a student who earned $9,000 at a regular job. (Be aware that other factors may apply here – for example, if your parents still claim you as a dependent or if you have other assets.)

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   The potential benefits can stretch into two school years. The FAFSA you fill out for the school year is based on your 2010 taxes. Likewise, down the road, the FAFSA you fill out for the school year will be based on your 2011 taxes. If your term of service runs from , you can potentially receive benefits from this section of the FAFSA over the next two school years. Even if you take a year off national service before going to school, you might still be able to benefit.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Take the smart approach to financial aid   If you pay attention to the financial aid process, you can save thousands of dollars. Each year the Department of Education produces The Student Guide to Financial Aid. You can access this guide at and get valuable advice that will help you pay for college.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   When you talk to financial aid officers, think of it as a job interview:   Be professional and ask informed questions, based on your research. Financial aid officers make decisions that can help or hurt you, so it's in your best interest to come across as smart and businesslike.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Know financial aid lingo!   It's also smart to familiarize yourself with some of the financial aid terms that apply to your national service experience and your education award.   Cost of Attendance (COA): The amount it costs to attend a college or university. Included in the COA are tuition/fees, room and board, books, supplies, transportation, and potentially the one-time purchase of a computer. You can use your education award for any cost that can be determined as Cost of Attendance.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   Expected Family Contribution (EFC): The amount you and your family (if your parents claim you on their taxes) are expected to contribute toward the cost of your education. This is based on income and assets from the previous tax year.   Need: The difference between the COA and the EFC is the student's financial need: COA – EFC = Need   Based on the information you provided in your FAFSA, the financial aid office will create an offer of grants, aid, and loans that match your need.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Information for Financial Aid Officers   Past research showed that 6.25 percent of financial aid offices had minimal experience processing education awards and a less than ideal understanding of the nuances of AmeriCorps as it relates to financial aid. More than likely, this has improved as more and more AmeriCorps and VISTA alumni have enrolled in colleges all over the country.   Here's the official language of CNCS for using your service experience and education award to pay for school. If your financial aid officers have questions about AmeriCorps, show them the material on the next slide, which is also available at _Disbursement_of_national_service.htm _Disbursement_of_national_service.htm

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Information for Financial Aid Officers   "Current educational expenses" as authorized under 42 U.S.C. § 12604(c), include:   The "Cost of Attendance" 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.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps How do I select a "favorable" student loan?   The financial aid office may make you an "offer" that includes a variety of loans. When it comes to Stafford Loans, an important difference exists between "subsidized" and "unsubsidized" loans.   An unsubsidized loan accrues interest while you are in school, while a subsidized loan does not. In other words, a $1,000 subsidized Stafford Loan taken your first year of school will still total $1,000 after you finish school.   An unsubsidized Stafford Loan will total $1,000 plus all the interest that accrued while you were in school.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps "Matching" schools: Colleges and universities that reward service   A number of colleges and universities encourage AmeriCorps alumni to attend by offering them scholarships. You can learn more at   also has some great education resources for alums. Once you are on the Web site (register, if you haven't already), visit the "Education Portal," where you will find links to schools that provide a variety of benefits to AmeriCorps alums.  Some schools provide at least one full-ride scholarship to an alum, match the Education Award, and give at least 25% of all tuition costs to every alumni who enrolls.  Some schools match the Education Award and offer an option of a Public Service degree.  Some schools offer a partial Education Award match or course credit for being an alum.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps What if my school isn't on any of these lists?   Here are a few options if your school isn't listed:   Check if your school has a Volunteer Center, Campus Compact, or other service office. Not only will you learn about opportunities to volunteer while a student, you might hear about scholarship opportunities right up your alley.   If you think your college should establish a new AmeriCorps scholarship, take up the cause. AmeriCorps and VISTA members often become idealistic and dedicated students, the type that most colleges and universities wish to attract.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   New scholarships can come from two sources: 1) Within the school itself and/or 2) Foundations and other giving agencies that provide scholarship funding. You can research the best path to pursue by asking questions at various campus offices (such as the financial aid office) and on the Internet (for example, use these keywords in a search engine: 'foundations,' 'funding,' 'establish,' 'scholarships').

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   By filling out the FAFSA correctly, you might receive a higher subsidized loan as a result of serving. (Regardless of kind, if it's a qualifying student loan, you can put it in forbearance while you perform national service. When you complete your service, the National Service Trust will pay all or a portion of the interest that accrued on your loans.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Frequently asked questions about using the Education Award for school   Can I use the education award to purchase a computer?   Maybe. The question is definitely worth asking your school's financial aid office. While many schools allow this, it is at the discretion of the financial aid office. You can use your Education Award to pay for expenses within the school's predetermined Cost of Attendance. Some schools allow an increase of Cost of Attendance in a given year to help pay for supplies and equipment, such as a computer. Simply ask what the policy is.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   What if I am going to graduate school?   Typically, graduate students are offered less in grants and work-study than undergraduates. To help pay for graduate study, seek out scholarships, fellowships, and teaching and/or research positions. Statistics show that a high percentage of graduate students take out loans to pay for school. Your service experience and properly filling out the FAFSA can still help you receive more favorable loans than if you hadn't served.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Can I give my education award to someone else?   Only an AmeriCorps member who started after October 2009 who is age 55 or older may transfer their education award to a child, grandchild or foster child.   The recipient of the transfer must be a US citizen, national or legal permanent resident. Each education award may only may only be transferred to one recipient and the recipient must use it within 10 years.   Each AmeriCorps member may earn a maximum of two full-time education awards (either through two full-time terms or through a combination of part-time, full-time or minimum-time terms). Once an individual earns the equivalent value of two full-time awards, he or she is not eligible to receive additional education awards. If an individual receives two full-time awards and transfers both awards to a child, both the transferring and designated individual will be considered to have receive the aggregate value of two full-time awards, and neither will be eligible to receive additional AmeriCorps or Silver Scholar awards from the National Trust.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Does my education award expire?   You must use your education award within seven years of completing your AmeriCorps service.   You can apply for an extension if:   you are unable to use the award for some reason during that time; 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.

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps Additional Resources   National Service Trust Members can call a toll-free number to receive assistance from the National Service Trust: The help line is staffed from 8 a.m.-6 p.m. (EST).   This Corporation web site includes vital information on issues like loan forbearance, the effect of the education award on taxes, and how the award applies to financial aid. The information is dense but extremely useful, and members can benefit from browsing the site and finding the information that applies to their individual situations.   This link will take you to a page that provides the specific language you may need to use when communicating with financial aid offices about your education award. ement_of_national_service.htm ement_of_national_service.htm

SCALE, University of North Carolina-Chapel Hill North Carolina LiteracyCorps   The AmeriCorps Alums Web site provides a list of schools that reward present and past national service participants and other resources and opportunities. Registration is free, and you'll find education award resources in the "Education Portal.“   Use this site to learn more about the award, form a strategy on how to use it, and discover other post-service opportunities related to school and student loans.   See our What's Next: Life After Your Service Year, a tutorial to help you get organized and make plans for your future.