AmeriCorps Education Award is a benefit offered to individuals who have completed a term of service in one of the three AmeriCorps programs. The award is a monetary amount that can be used to pay for current educational expenses, such as tuition, fees, and other related costs. The amount of the award is equivalent to the maximum value of the Pell Grant for the fiscal year in which the national service period was approved. Individuals are not eligible to receive more than the added value of two full-time education awards, regardless of which program they served in.
This means that if a person has already received the value of two full-time education awards in the past, they are not eligible to receive another award. However, they can still serve additional terms in VISTA up to the limit of five one-year terms and receive cash stipends upon successful completion of each additional period. The Segal AmeriCorps Education Award can be used to pay for all or part of the cost of attending a qualified higher education institution. It can also be used to pay for the portion of the cost that is not covered by other sources of financial aid, such as scholarships, loans, grants, and exemptions from tuition or fees.
The award can affect the process of receiving additional financial aid through the FAFSA. Additionally, all payments made with the Segal AmeriCorps Education Award are subject to federal and potential state taxes in the year in which each payment is made. Interest payments, as well as educational scholarship payments, are considered taxable income and are reported to the IRS. The Serve America Act allows for the transfer of educational awards earned by a member who successfully completes a term of service in state and national AmeriCorps programs, under specific conditions.
Individuals have seven years from the date they complete their term of service to use their education scholarship funds. Although individuals are responsible for paying taxes on their education grant and other AmeriCorps benefits, they may be entitled to other tax breaks under the Taxpayer Assistance Act of 1997. IRS Publication 970, Tax Benefits for Education, explains the tax benefits that may be available to taxpayers who pay the highest educational costs or repay student loans.