Lana Oconnell
AmeriCorps offers an education award to its members, which can be used to pay off student loans. The award can be used to pay off qualified student loans, which include loans backed by the federal government under Title IV of the Higher Education Act, loans under Titles VII or VIII of the Public Service Health Act, and loans made by a state agency, including state institutions of higher education. The award can also be used to pay current educational expenses at eligible schools and certain GI Bill-approved educational programs for veterans. The amount of the award varies and is subject to federal tax in the year each payment is made.
| Characteristics | Values |
|---|---|
| AmeriCorps program name | Schools of National Service |
| AmeriCorps service year | Counts towards 10 years of full-time work at a nonprofit or government agency |
| Qualified loan | Any loan made, insured, or guaranteed under Title IV of the Higher Education Act of 1965; any loan made by a state agency or institution of higher education to cover a student's attendance costs |
| Qualified loan examples | Federal Consolidated Loans, Direct Subsidized & Unsubsidized Stafford Loans, National Defense Student Loans, Nursing Student Loans |
| Education award | Segal AmeriCorps Education Award |
| Education award amount | Equivalent to the maximum value of the Pell Grant for the fiscal year in which the term of national service is approved |
| Education award usage | Repay qualified student loans, pay current educational expenses at eligible institutions of higher education and training programs, pay interest accrued on qualified loans during service |
| Education award tax implications | Subject to federal and possible state tax in the year each payment is made |
| Education award expiration | Must be used within seven years |
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What You'll Learn
What is the Segal AmeriCorps Education Award?
The Segal AmeriCorps Education Award is a benefit given to AmeriCorps members who have successfully completed their AmeriCorps term of service and enrolled in the National Service Trust. This award can be used to pay off qualified student loans and to cover current educational expenses at eligible institutions of higher education and training programs.
The award amount for a full-time service program is equivalent to the maximum value of the Pell Grant for the fiscal year in which the term of national service is approved. The amount of the Pell Grant can vary each year, so the amount of a full-time award can also change. However, once an individual earns an award, the dollar amount remains fixed. The award amount for less than half-time service programs varies based on the required terms of service.
A qualified loan is defined as any loan made, insured, or guaranteed under Title IV of the Higher Education Act of 1965 (excluding loans made to parents of students under section 428B of the Act). It also includes loans made under Titles VII or VIII of the Public Service Health Act and loans made directly to students by state institutions of higher education or state agencies to cover the cost of attendance.
The Segal AmeriCorps Education Award can also be used to pay accrued interest on qualified loans during an individual's service. Additionally, certain schools will provide scholarships or matches for AmeriCorps alumni with the Education Award.
All payments made using the award are subject to federal tax in the year each payment is made, and the award must be used within seven years of being earned.
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Can I use the award to pay my student loans?
You can use the Segal AmeriCorps Education Award to pay off qualified student loans. A qualified loan is defined as any loan made, insured, or guaranteed pursuant to Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), except for a loan made to a parent of a student under section 428B of the Act. It also includes any loan made under Title VII or VIII of the Public Service Act (42 U.S.C. 292a et seq.) and any loan made directly to a student by a state agency or institution of higher education to cover the student's attendance costs.
You can use the award to pay off defaulted student loans, as long as they meet the definition of a qualified loan. You can also use the award to pay the interest accrued on your qualified loan during your service. To do this, go to your Home Page in MyAmeriCorps and electronically request to have a payment made for the interest accrued.
The award can also be used to pay current educational expenses at eligible schools and certain GI Bill-approved educational programs for veterans. Eligible schools are higher educational institutions, both domestic and foreign, that participate in the Department of Education's Title IV student aid programs. This includes most post-secondary colleges, universities, and technical schools.
The amount of the award is equivalent to the maximum value of the Pell Grant for the fiscal year in which the term of national service is approved. The amount of the Pell Grant can vary each year, so the amount of a full-time award can change. Once an individual earns an award, the dollar amount remains fixed.
Additionally, certain schools will provide scholarships or matches for AmeriCorps alumni with the Education Award. Also, under the Public Student Loan Forgiveness program, the US Department of Education forgives any outstanding balance and accrued interest on a borrower's direct loan or direct consolidation loan if you work for 10 years full-time at a nonprofit or government agency. Your AmeriCorps service year counts towards those 10 years if you make payments towards your loan during your service.
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What is a qualified loan?
AmeriCorps is committed to ensuring the safety and well-being of its members and volunteers, as well as providing benefits such as the Segal AmeriCorps Education Award. This award can be used to repay qualified student loans or to pay for current educational expenses at eligible institutions of higher education and training programs.
A qualified loan is any loan made, insured, or guaranteed under Title IV of the Higher Education Act of 1965. This includes federal student loans such as Subsidized and Unsubsidized Stafford Loans, Supplemental Loans to Students (SLS), Federal Consolidated Loans, and many others. It is important to note that loans made to parents of students under section 428B of the Act and loans made under Titles VII or VIII of the Public Service Act are not considered qualified loans.
In addition to federal student loans, qualified loans also include those made directly to students by state institutions of higher education or state agencies to cover the cost of attendance. These could be short-term loans or other types of financial assistance provided by the state to ensure students can cover their educational expenses.
If you are unsure whether your loans qualify for repayment using the Segal AmeriCorps Education Award, it is recommended to contact your loan holder or the National Service Trust Office for clarification. It is important to understand the specifics of your loan terms and how they align with the criteria for qualified loans as defined by AmeriCorps.
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How do I know if my loan is qualified?
If you're unsure whether your loan is qualified, you should ask your loan holder. If your loan holder is unsure, ask them to contact the National Service Trust Office.
According to legislation, a qualified loan is any loan made, insured, or guaranteed pursuant to Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), other than a loan made to a parent of a student pursuant to section 428B of the Act, and any loan made pursuant to Title VII or VIII of the Public Service Act (42 U.S.C. 292a et seq.); any loan determined by an institution of higher education to be necessary to cover a student's cost of attendance at such institution and made directly to a student by a State agency.
For purposes of the Education Award, the term state agency includes state institutions of higher education. For example, any loan, including short-term loans, made directly to you by a state institution of higher education to cover all or part of the Cost of your Attendance is a qualified loan.
Loans that are not qualified include:
- PLUS Loans to parents of students
- Loans made to a parent of a student pursuant to section 428B of the Higher Education Act
You can use your Segal AmeriCorps Education Award to pay qualified student loans you currently owe or may acquire during your term of service. You can also use it to pay current educational expenses at eligible institutions of higher education and training programs.
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Can I use the award to pay my educational expenses?
The Segal AmeriCorps Education Award can be used to pay current educational expenses at eligible institutions of higher education and training programs. These include most post-secondary colleges, universities, and technical schools, both domestic and foreign, that participate in the Department of Education's Title IV student aid programs. Such schools are referred to as "Title IV schools" and offer federal student aid such as Stafford Loans, William D. Ford Federal Direct Loans, Federal Perkins Loans, and Public Health Service Loans.
The award can also be used for educational expenses associated with enrollment in programs of education, apprenticeships, or job training approved for educational benefits under the Montgomery G.I. Bill and the Post 9/11 G.I. Bill. A US Department of Veterans Affairs-approved Certifying Official can determine the covered costs.
It is important to note that the award can only be used to pay for "current educational expenses," which are expenses incurred after the start of your AmeriCorps service. Expenses that pre-date your AmeriCorps service are not considered "current." However, if you have a qualified student loan to pay for expenses incurred prior to your AmeriCorps service, you can use your award to repay that loan.
Additionally, the award can be used to pay the interest that accrued on your qualified loan during your service. You can submit a request for this through your My AmeriCorps Home Page. The National Service Trust will pay all or a portion of the qualified loan's interest that accrued during your service.
The Segal AmeriCorps Education Award cannot be used to repay any other type of loan, even if it was obtained for educational purposes at eligible schools or programs.
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Frequently asked questions
The Segal AmeriCorps Education Award is a monetary award that can be used to pay for current educational expenses at eligible schools and certain GI Bill-approved educational programs for veterans. It can also be used to repay qualified student loans.
A qualified loan is any loan made, insured, or guaranteed pursuant to Title IV of the Higher Education Act of 1965, other than a loan made to a parent of a student pursuant to section 428B of the Act. It also includes any loan made pursuant to Titles VII or VIII of the Public Service Act and any loan determined by an institution of higher education to be necessary to cover a student's attendance costs.
You can check with your loan holder to see if your loan is a qualified loan. If they are unsure, they can contact the National Service Trust Office.
It is more beneficial to make a lump-sum payment. However, you should call and follow up with your loan servicer to ensure that the payments are processed correctly.
Yes, your AmeriCorps service year counts towards the 10 years if you make payments toward your loan during your service. You need to submit your PSLF form to the AmeriCorps Hotline for completion.
