Ed Award Chat Transcript

Edited Transcript of the eCommunity Chats on August 12 and 14, 2003

How long do I have before my Education award expires?

Your education award is valid for 7 years, effective the date you end service.

How do I access my Education award if my maiden name has changed?

You must call the hotline at (888) 507-5962 or email to edawardvoucher@cns.gov to request an update of your name in the National Trust records.

How do I request another copy of my Education award if it has been lost?

If you have questions about the status of your education award or need another copy, contact the National Service Trust at 888-507-5962. Operators are available Monday through Friday from 8:00 a.m. to 6:00 p.m. Eastern Time. You can also send a request via email to edawardvoucher@cns.gov

How long do I have to wait to receive my Education award voucher?

If the 'End of Term' paperwork information is all correct (mailing address) you should receive your voucher 2 weeks after you complete your term of service.

Does the Education award come to me or does it go directly to the Financial Aid office of my school?

The Edward Award Voucher is mailed to you.  It is your responsibility to take the voucher to your University's Financial Aid office for completion.  The Financial Aid officer will then mail the voucher back to the Trust.  Payment(s) will be made to your University, and any amount over $1500 will be issued in two equal installments to your University.   

Does the trust send me a new Education award voucher after each use?

Yes, you will receive a new voucher with your remaining balance each time a payment is made from your Education award account.

Do I have to complete a FASFA form in order to use my Education award?

No, completing a FASFA form is not required, however in order to receive additional financial aid that you qualify for it is a good idea to complete the FASFA form.

Does the National Trust pay the interest amount accrued during my term of service?

Yes, but only for Federal Student loans. You need to complete the interest form 2-3 weeks before ending your service and send it to the lender.  If you need a copy of the form visit: www.americorps.org/members/resource/forms.html

How many Education awards can I earn?

You can earn a maximum of two Education awards, regardless of the type of AmeriCorps program/combination you are enrolled in.  (VISTA, NCCC, State, National, part- or full-time, etc.)

I recently consolidated my loan.  Can I use my award to pay the principle on one of my smaller loans instead of dividing the award to pay my monthly amount on the loan?

It depends.  Typically, lenders will apply the Education award to the interest and payments, rather than principle.  You will need to contact your lender to verify whether your Education award can be applied to the principle.

There are some benefits, however, to applying it to the interest. For instance, when I finished my          service, I chose to use it this way since it meant I would not have another payment for almost 3 years. This helped, since I wasn't making a lot of money right after AmeriCorps.

Are there disadvantages to consolidating my student loans before the end of my year of service?

There can be some disadvantages to consolidating your loans before the end of your service year. 

1. Consolidation Lenders won't necessarily accept the interest accrual form, thus making you responsible for payment of accrued interest. 

2. Some consolidation lenders do not offer forbearance to members of national service

We suggest, in order to decrease complications, that you postpone consolidation until after you've completed your term of service. Wait until after the interest is paid, then consolidate. 

If I am using the award to pay for loans, is it better to A) use it all at once or B) use it monthly when my loan payments are due?

It depends.  Remember that the Education Award is taxable.  This means if you use it all at once, you will be taxed all at once.  To help distribute the tax burden, you can chose to use your  Education Award over a period of 2 or more years. 

Also, if you are planning on going back to school, it is sometimes better to keep a little bit in case you need it for costs at a Title IV school.

Should I figure out my taxes before I use my Education Award to ensure that I don't get bumped into a higher tax bracket?

You won't be able to reduce the total taxes you pay when using your Education Award, but you can reduce the large tax bill by redeeming your Education Award in multiple disbursements.

This is done by making a copy of the Education Award, requesting part of it before the end of the calendar year (which correspondences to the tax year), and requesting the other part(s) after January of the subsequent year.

If you still have questions on how the Education Award will affect an individual member's taxes you should consult a CPA.

Is there a way to receive a tax break?

There are certain tax breaks you can now get for education expenses. This is a great benefit. There is information on our website in the Education award section under taxes. www.americorps.org/members/resource/education/taxcredits

Are taxes taken directly from the award or is it the users' responsible for making the payment at tax time?

The tax is not automatically deducted from the Education award. The user is responsible for covering this cost.  By law, the Education award funds can only be used for Cost of Attendance at a Title IV school or repayment of prior loans. You must use other income sources to pay any tax burden.

How will the award affect reporting on income tax return?

You will get a 1099 at the end of the year for any amount of your award that you use.

Where can I find a listing of schools that match the award?

Visit www.lifetimeofservice.org and click on the education section.

How do I ask a school to match or supplement the Education Award?

Several of us have started matching awards by using creative approaches.  In fact, the AmeriCorps alumni web site www.lifetimeofservice.org has a tool kit to help people get started in increasing the number of schools that match the award.

The trick is to meet with the director of admissions, or dean of enrollment or someone to whom you can explain the benefits.  While at Evergreen, I was able to show that by providing just a few such awards, on a competitive basis, we were able to increase our prospective students from national service by more than 30 percent. Enrollment managers will often listen to this kind of sage advice

Is there an overseas equivalent to title IV schools?

No. Since the Title IV is United States Federal Code there is not an overseas equivalent.  However, there are many foreign schools (over 500) that are eligible to receive Title IV funds such as Stafford Loan and Pell grants. Search for the complete list by following the link at www.onechildleftbehind.com/edaward.html

I want to use my award to enroll in an intensive Spanish program in Central or South America. How do I go about doing this?

If you are currently enrolled at a college in the United States you can enroll in a study abroad program. Especially if your school has a consortium agreement with an intensive language program in South America, but make sure the school abroad is Title IV. 

You can also enter into an internship agreement with a current school. If the school is title IV, then typically you can use your Education award there. For a list of foreign schools that accept Title IV funding visit:  www.fafsa.ed.gov/fotw0304/fslookup.htm  Select the search option, and then select 'foreign country' when prompted to enter a state.

Can the institution include travel in its cost and reimburse me if I study overseas?

Travel is normally a cost of attendance expense if you are enrolled at least half time or greater status.  So yes, travel can be included.

Can I use my Education award to take non-conventional courses such as Silversmithing/Jewelry, Yoga Classes, Rock-Climbing and/or Kaplan etc.

You can use your Education award to enroll in 'non-conventional' courses so long as the courses are offered through a Title IV institution.     

How do I know if I can use my Education award for taking continuing education certificate program courses online at a particular institution of higher education?

You have to check with the school and verify that the class you take is a regular class, and not what they call a 'recreation education' course.  Also, make sure the school has a Title IV status.

May I tap into the Education award prior to beginning school and, if not, can I rely on the award to help me ASAP or as soon as I'm through with my service?

You can not 'tap into' the Education Award, however some schools are willing to offer students a credit if they have proof of the Education award voucher. BE ABSOLUTELY SURE that if you do this, you have shown them the most recent amount of funds left in your ed award and that you fully intend to take the classes you sign up for.

If you allow the school to offer you a credit and then drop out of school before the voucher arrives (or even after, for that matter), you will owe those funds back to the school.

Is the Education Award similar to a Pell Grant?  Can I use my Education Award for living expenses?

The Education Award is very similar to the Pell Grant in that it can be used for anything defined in the financial aid profession as cost of attendance.  Cost of attendance typically includes not only tuition, but also room and board, books and miscellaneous expenses. However, to be eligible for \costs other than tuition, you generally have to be enrolled at least half time or greater.

My handbook says I can use my award for transportation expenses-does that mean I can make my car payment with it? 

No.  In financial aid, when we calculate transportation expenses as part of the Cost of Attendance, we are referring to things like gas, bus tickets, and other minor monthly expenses used to get around.

However, if you have another job or income, you may certainly use that income to pay for your car, and if you are a 1/2 time student or more, then the Education award can be used for other Cost of Attendance expenses such as rent, food, etc.

Can I use the award to pay for books? How exactly do you use ED award to pay for books?

Yes, you can.  When you receive your award in the mail take it to your Financial Aid Officer and he/she will fill out the Financial Aid office section of the voucher and mail it in to the Trust.

If I am taking a Computer Courses is the purchase of a computer covered by the Education Award?

In order to get that computer, you generally need to be taking 1/2 time classes or more and request from the financial aid officer (FAO) an increase in expenses based on the one time purchase of a computer.

Once you've paid your tuition, if your Education award exceeds the tuition costs, then you will receive an overage check for the balance of what you requested. If the computer has been authorized as a Cost of Attendance expense, then you may use those overage funds (up to $1,500) to purchase a computer.

I'm still confused.  What is an overage check and what does it have to do with my Education award?

You will receive an overage check if your award exceeds the tuition cost for the semester. If you request your entire Education award, and the Education award is greater than your tuition amount, then you will receive an overage check from your University.

Remember that the Education award will come in two disbursements, so you may not get the overage at the beginning of the semester. If your tuition is for the entire year, and it is less than the Education award (in addition to any fees the school charges to your student account) the answer can also be yes, but again, remember the two disbursement rule. The overage may not come right away. Some schools, such as Evergreen, where I was a FAO, would front the money, but not all schools do this.

What if I have no 'prior costs' and receive a merit-based scholarship, how should I apply my Education award?

While you may have no prior costs, it's likely that your cost of attendance is still rather high due to room, board etc.  However, if you have a huge scholarship, using your Education award may wind up reducing your other aid.  Always apply for all the financial aid that you can, and be sure to            apply early and on time (before Feb. in most cases.)

Once you receive your award letter, make sure that your Education Award does not reduce your other aid by talking with the financial aid officer at your school and verifying that your Education award will not place you into an Over-Award status.  (Over-Award: When your total financial aid exceeds your Cost of attendance.)

Remember that you have 7 years to use your Education award.  You may choose not to use it now if it will result in loss of aid.  To find out how to maximize the value of your Education award visit: http://www.onechildleftbehind.com/edaward.html and open the A copy of a handout I frequently use at Education award presentations link.

I am funding my own Graduation school education.  Is it better to use the Education award to pay off college loans or finance grad school?

This situation is specific to each individual and is a little more complicated than the either/or solution.  I've generally seen some wise decisions made by alumni who do both: use part of the ward for current costs, and part for prior loans.

If I already have a degree, (thus I no longer qualify for federal grants) should I apply for Federal loans INSTEAD of using the Education award to pay for my tuition? Is it better to pay the loan, rather than pay the tuition directly?

This depends, it's true that you won't receive grants such as the Pell or SEOG, but there are other               forms of federal aid for grad students (go to www.finaid.org for more research) such as assistantships, fellowships and other awards that don't' need to repaid such as work-study.

You're correct in the sense that most grad students aren't faced with losing other aid by using the Education award. You should consider using the award strategically, by using part of it for current expenses, and perhaps part for prior loans, but every case is a little different.

You can certainly use the Education award to repay eligible student loans, such as Stafford and Perkins, so it is an option.  Don't' forget to apply for deferment while you are a grad student, though and in this way, the department of education will pay for your interest accrued on your Stafford and Perkins loans.

What about using a loan to get in school and receiving a refund for the overage b/c the Education Award did no come in on time? I start my courses in 2 weeks and my loan was processed last week, but I want to be able to use my Education award this semester.

Many students do select to take out loans, rather than pay tuition, however remember that your Education award can only be used to repay eligible student loans such as Stafford, Perkins or Consolidation loans.

As a financial aid counselor at Evergreen, I do know that schools sometimes process an emergency loan, which isn't really a loan per se as much as a student account credit.  However, if the award does register on your student account, the financial aid office will process the award for current educational expenses.

What about the stipend, how does the partial Perkins loan cancellation work?

Partial Perkins cancellation is only an option for AmeriCorps*VISTA members who accepted the $1,200 stipend instead of the Education award. Once you have completed your term of service, contact your lender (which will be your school since Perkins is called a Campus Based program) and inform them that you are applying for partial cancellation based on VISTA service. I believe the maximum amount is 15%.

How do I know that the Trust has paid the interest on my loan during the deferment period?

You can call the Hotline at (888) 507-5962 and talk with one of the operators to check the status.

If I don't plan on going back to school, and I don't have any student loans to pay back, can my Education Award be refunded to me as cash?

No, you cannot have the Education Award refunded to you as cash.

Is legislation being considered that would enable the Education award to be used for the start-up business costs?

No.

Is there legislation being passed to make the Education award tax exempt?

No, there is no legislation to make the Education award exempt from taxes.  Congress decided this was an issue for the IRS and the congressional committee that oversees taxes.

What are some other useful links regarding effective use of my Education award?

http://www.onechildleftbehind.com/edaward.html

http://www.americorps.org/members/resource/education/benefits.html

http://www.lifetimeofservice.org/Content.cfm?content_id=26

http://www.nationalserviceresources.org/filemanager/download/447/rogers.pdf