AmeriCorps members who are earning a Segal AmeriCorps Education Award are uniquely eligible for one type of postponement of the repayment of their qualified student loan called forbearance. During this forbearance based on national service, interest continues to accrue. If you successfully complete your term of service and earn an education award, the National Service Trust will pay all or a portion of the interest that has accrued on your qualified student loans during this period. This accrued interest paid by the Trust, like the Segal AmeriCorps Education Award itself, is subject to income taxes.

Eligibility for Postponement

AmeriCorps members enrolled in an AmeriCorps project are eligible for forbearance for most federally-backed student loans. For other types of student loans, ask your loan holder if your AmeriCorps service qualifies you for a deferment or forbearance.

AmeriCorps VISTA members have some additional benefits. Whether they have elected the education award or the stipend, AmeriCorps VISTA members may be eligible for other types of loan postponements. Those who choose the stipend are also uniquely eligible for partial cancellation of Perkins loans.

AmeriCorps VISTA members can find more information on the postponement and cancellation of student loans in the AmeriCorps VISTA Member Handbook.

To have repayment of your federal qualified student loans postponed, you must first officially enroll in an AmeriCorps project, which electronically sends enrollment information to the Trust. Then you must request a "forbearance" from your loan holder, by completing the Forbearance Request for National Service Form and any additional information or forms that your loan holder may require. Members can obtain the Forbearance Request Form through their program’s staff. Complete one form for each of your loan holders. Since there are several types of forbearances and deferments, tell your loan holders that you are requesting loan forbearance based on your AmeriCorps service.

Submit your Forbearance Request for National Service Form (available through your program's staff) and any other information required by your loan holder to the National Service Trust, which we will process and return to your loan holder. We can certify your AmeriCorps status, but only the loan holder can determine your eligibility for forbearance. Contact your loan holder if you have not heard from them within four weeks of submitting your information to the Trust.

Interest Accrual Payments

AmeriCorps members who have earned a Segal AmeriCorps Education Award are eligible to have the Trust pay up to 100% of the interest that accrued on their qualified student loan during their service. To have the Trust pay all or a portion of the interest accrued on your qualified student loans, the Trust must receive verification from your project that you have completed your service and are eligible for an award. You and your lender also must complete the Interest Accrued During National Service Form, which indicates the amount of interest accrued during your service period. Your loan holder sends this completed form to the Trust for payment.

The Trust WILL NOT pay interest on qualified student loans if you fail to complete your term of service. Exceptions will be made only if you fail to complete your term of service for compelling personal circumstances and you have earned a pro-rated award. It is up to your individual program to determine compelling personal circumstances. Examples that might be considered are a serious illness or injury, death of your immediate family member, or early closing of your project.

The Trust will only pay interest on qualified student loans, as described earlier. Ask your loan holder if your student loan qualifies for other kinds of forbearance.

Defaulted Loans

Most student loans that are in default are not eligible for forbearance. If you have loans that have gone into default before you begin your AmeriCorps service, you can attempt to negotiate an arrangement with the loan holder (or collection agency) to bring the loan out of default so forbearance can be granted and interest paid.

You must correctly complete and submit to the National Service Trust the (1) Forbearance Request for National Service Form (available through your program's staff) at the start of your service term; and submit to your lender the (2) Interest Accrued During National Service Form at the end of your service term. Your project director may also make these available to you.

Financial Aid

The Segal AmeriCorps Education Award, the interest the Trust may pay on your deferred qualified student loans, and the living allowance can affect your eligibility for other student financial aid in the following ways:

• Under certain circumstances, your education award, living allowance, and Trust payments on accrued student loans can be excluded from calculations determining your eligibility for student aid based on financial need. This could increase the amount of "need-based" aid for which you are eligible.
• Under different circumstances, using the education award can reduce the amount of other need-based student aid for which you are eligible.
• Institutions of higher education may offer special benefits to AmeriCorps alumni, thereby increasing the benefit of the education award.

Under certain circumstances, you may be able to exclude from the calculation of financial need the amount of the education award you used, the living allowance you earned, and Trust payments on qualified student loans that were made in a given year. Excluding these amounts from the calculation used to determine your financial need could increase the amount of need-based aid you can receive. This is a unique benefit to AmeriCorps alumni. Note, for example, that your living allowance, while subject to income taxes, is not considered as income in this calculation. Below, we tell you where this information should appear on the Free Application for Federal Student Aid (FAFSA).

Financial aid offices must consider the Segal AmeriCorps Education Award as a resource, or funds that you have available toward your cost of attendance, when considering your eligibility for campus-based aid. This includes the Federal Supplemental Educational Opportunity Grant (SEOG), the Federal Work-Study Program, and Perkins Loans. (See 34 C.F.R. § 673.5(c).) Campus-based aid is distributed to schools in limited amounts, and is not considered an entitlement. A school will assist individuals to the extent resources are available. When you use your education award as a resource, it may reduce your eligibility for campus-based aid.

Be sure to consider all of your options early in your enrollment process.

In addition, it is very important that you complete the FAFSA correctly, and complete it early. The FAFSA "is used to apply for federal student financial aid, including grants, loans, and work-study. In addition, it is used by most states and schools to award non-federal student financial aid" (OMB# 1845-0001). FAFSA can be accessed online and comes with detailed instructions. In the income exclusion worksheet portion of the FAFSA, you are asked to write down the amount of any "AmeriCorps awards" that were reported to the IRS in your adjusted gross income.

A Message to Financial Aid Counselors

Dear Financial Aid Counselor:

We are providing this information to assist you in understanding the relationships between AmeriCorps and FAFSA. An AmeriCorps member receives three types of benefits that are relevant to completing the FAFSA:

Living Allowance: AmeriCorps members may receive a living allowance to cover living expenses during their term of service.

Segal AmeriCorps Education Award: After successfully completing a term of service, AmeriCorps members who are enrolled in the National Service Trust are eligible to receive an education award. The education award can be used to pay education costs at qualified institutions of higher education or training, or to repay qualified student loans. The award currently is $4,725 for a year of full-time service, with correspondingly lesser awards for part-time and reduced part-time service. A member has up to seven years after his or her term of service has ended to claim the award.

Payment of interest on loans: The Corporation for National and Community Service pays interest on postponed qualified student loans for AmeriCorps members who successfully complete their term of service.

The member may also be earning Federal Work-Study wages for serving in an AmeriCorps project. All of these benefits should be included on the "income exclusion worksheet" of the FAFSA.

With respect to the education award and interest payment, the IRS has determined that these payments are subject to income taxes in the calendar year in which they are paid by the trust. That taxable amount is reported on a 1099 form. When the student files a FAFSA for the following year, the amount of the Segal AmeriCorps Education Award paid in the base year and included in that year's AGI, is to be excluded from the need analysis calculation. In most cases, the entire education award amount that was paid is taxable, so the entire amount that was paid is included in the AGI. Thus the filer is to report all of the award that was paid, not just the amount in excess of tuition, fees, books, and supplies.