Getting the Most Out of Your Segal AmeriCorps Education Award

History of the SegalAmeriCorps Education Award

• AmeriCorps was created under President Clinton in 1994.

• AmeriCorps Education Award was named after Eli Segal, first CEO of the Corporation for National and Community Service.

• The National Service Trust– Account in the U.S. Treasury that pays for AmeriCorps Education

Awards.– Also pays interest that accrues on qualified student loans for

AmeriCorps members over their service year.

Segal Education AwardTerm of Service

Minimum Number of

Service Hours

AmeriCorps Education

Award

Full-Time 1700 $5,730

Half-Time 900 $2,865

Reduced Half-Time

675 $2,182.78

Quarter-Time 450 $1,515.55

Minimum Time 300 $1,212.44

Online system for distributing AmeriCorps Education Awards.

Access your education award online at:

My AmeriCorps Portal

https://my.americorps.gov

Education Award Rules

Payments are made directly to the loan holder or school – not to you.

You have 7 years to use your award.• Can request grant extension

on my americorps

You can only receive the equivalent value amount of 2 FT Ed awards

You can use it all at once OR divide it up and use portions at different times

Education Award payments are considered taxable income.Education awards can be transferred to family members if member was at least 55 years of age at the start of their service year.

Uses

1Repay

qualified student loans

2 Current

educational expenses at

eligible schools

“current ed expenses”= expenses incurred after officially becoming an AC member (cannot use to pay school debt)

http://www.nationalservice.gov/programs/americorps/segal-americorps-education-award/using-your-segal-education-award

Repay Student Loans

Eligible•Qualified Student Loan: a loan backed by the federal government under Title IV of the Higher Education Act or under Titles VII or VIII of the Public Health Service Act.•Loan made to you by a state agency, including state institutions of higher education.•Can be used for defaulted loans, as long as qualified

EX: Stafford, Perkins, William D. Ford Direct, Federal Consolidated, Supplemental Loans for Students, Primary Care Loans, Nursing Student Loans, Health Education Assistance

Ineligible•Private loans (i.e. student loan from credit union)•Parent PLUS loans (if name is not on loan CNCS is not able to disburse payment)

How to know if private? Contact servicer to ask.

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Repayment Choices

When you make a lump sum payment on your federal student loan(s), there are two ways that payments can get applied to your account:

http://www.nationalservice.gov/resources/ed-award/whos-jade

Paying Down PrinciplePaying off early

• Pay less over life of loan• Lower monthly payment

amount

Advancing PaymentPaying ahead

• Pay ahead as many loan payments as Ed award will cover

• Get a break from making student loan payments.

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Student Loan Forbearance

Interest Accrual Payments• National Trust will pay the interest that accumulated on

your student loan – Up to 100%, depending on type (full/part time) and length of service

• After you finish your term, go back to your “My AmeriCorps Portal” & click the Interest Accrual Request link.

• Fill in the name of the lending school or institution, city, state, & zip. Repeat for multiple loans.

• Within a few weeks, CNCS will send funds to your lender.

http://www.nationalservice.gov/programs/americorps/segal-americorps-education-award/using-your-segal-education-award/postponing

*NOTE*At the end of forbearance (once your service term is done) interest that accrued will be added to your outstanding principle.If you wait to submit request to have the interest paid off, each month interest will be accrued on your new (larger) principle amount.Thus the sooner you submit the request, the better.

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Additional Loan Considerations

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Income-Based

Repayment Plan

Public Service Loan Forgiveness

Public Service Loan Forgiveness

• Must have federal direct loans, if not you can consolidate – Combining multiple federal loans into one loan= single monthly payment as opposed

to multiple.– You may want to consider consolidation if you can get a better interest rate.– Make sure the “new” consolidated loan is a qualified student loan (loans backed by

the federal government).– RESEARCH IT WELL. Only enter into after careful consideration.– Cannot consolidate private loans into federal.

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https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service

• This program offers forgiveness for outstanding Federal Direct loans for those individuals who make 120 qualifying payments (10 years), while working full-time in a “public service job”. - For government or non-profit- Does not have to be consecutive payments!- Years in AC may count towards payments

https://studentaid.ed.gov/sa/repay-loans/consolidation#eligible-loans

Income-Based Repayment Plan

• This plan helps to make repaying student loans more affordable for low-income borrowers.

• Reduces monthly loan payments according to your income.

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PSLF & IBR• IBR: paying less per month, can take longer to pay off debt,

thus more accumulated unpaid interest. • IBR + PSLF: But, if you are eligible for IBR and PSLF, your

remaining loan balance, including any accumulated interest, could be wiped away.

• During AmeriCorps– If you are single & make $12,100 during your AmeriCorps

service year, your monthly payments could be as low as $0 per month according to IBR.

– The $0 per month payment on a qualifying loan counts towards the required 120 payments for PSLF.

– An IBR calculator is available at www.finaid.org to estimate your monthly payment.

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http://www.nationalservice.gov/resources/ed-award/trent-triumphs-over-debt

Current Education Expenses

Eligible Schools•"Title IV schools." This category includes most post-secondary colleges, universities, and technical schools.•G.I. Bill approved courses or training programs

Award can be used for:•Cost of Attendance (COA) for degree/ certificate granting program

• tuition, books and supplies for classes, transportation, room and board, etc.

•Education expenses for non-degree courses (i.e. workshops, job trainings, apprenticeships through Title IV schools)

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http://www.nationalservice.gov/resources/ed-award/ayesha-explores-her-options

Financial Aid Basics

Cost of Attendance (COA): The amount it costs to attend a college or university. Includes tuition/fees, room and board, books, supplies, transportation. It may also cover the purchase of a computer.

Expected Family Contribution (EFC): The amount you and your family (if your parents claim you on their taxes) are expected to contribute towards the cost of your education. This is based on income and assets from the previous tax year.

COA – EFC = NEED

Need: The difference between the COA and the EFC is the student’s financial need

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www.finaid.org

FAFSA: Free Application for Federal Student Aid

Add your AmeriCorps-related earnings to the “Additional Financial Information” section on your FAFSA where it asks for “AmeriCorps benefits”

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Reporting your AmeriCorps living allowance, educationaward and interest accrual payments on the “Additional Financial Information” section will adjust your gross annual income/your EFC.

For example, if your onlysource of income was your$12,100 AmeriCorps livingallowance, then for financialaid purposes your income may be considered as $0, which could increase the amount of “need-based” aid you are eligible for.

12,000- 0 = 12,000

If you used your Ed award the previous year but put that in the general “income” section on the form, along with your living stipend, that could decrease the amount of aid you are eligible for.

12,000 – 5,730 = 6,270

Greater Need

Less Need

COA – EFC = NEED

COA – EFC = NEED

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Examples

AVOID LOSING AIDBeware of OVER-AWARD STATUS!

Financial aid cannot exceed the COAIf, after you receive financial aid, you

decide to use your Ed award, the financial aid office may reduce your

aid package.

COA= $12,000 Financial aid received= $9,050

COA= $12,000 Financial aid $9,050 + Ed award $5,730 = $14,780

Consult the school’s financial aid department. They can explore with you if it’s best to use the award for tuition or use financial aid (if eligible) and save the award for outstanding loans.

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Taxes

• Your living stipend, education award, and interest accrual payment are all counted as taxable income.

• Be aware, if you use your Ed award all at once, that will be more income on your tax form thus more taxes to pay.

• If spread use over multiple years, your tax obligation is also spread

http://www.nationalservice.gov/programs/americorps/segal-americorps-education-award/using-your-segal-education-award/tax

If you use a total of $600 or more of interest accrual award or Ed award, CNCS will send you a 1099 MISC

Still confused? Call the National Service Hotline

1-800-942-2677

9:00 am to 7:00 pm Mon-Thursday + some Fridays

Check out the FAQ documenthttp://www.nationalservice.gov/documents/education-award-faqs