What Happened to Getting Rid of the Taxes on the Education Award?

Institutions that Match the Ed AwardWhen the various bills that became the Edward M. Kennedy Serve America Act were in play, there was talk about eliminating the taxes from the Segal AmeriCorps Education Award.

In case you are new to national service, the education award is the post-service benefit received by AmeriCorps and VISTA members that can help them pay for educational expenses and/or student loans. It’s considered taxable income.

It was never the Kennedy bill but rather a separate bill introduced by Senator Dodd of Connecticut that would have ended the tax on the education award. Late in the process, elements of Dodd’s national service bills were incorporated into the Serve America Act. However, the elimination of the taxes on the education award was not one of those elements. The tax remains.

I called Senator’s Dodd office last week and asked a staffer if there were any plans to follow through with Continue reading

Low-Income, High-Debt Program for Student Borrowers Starts in July

When I first heard about the Public Service Loan Forgiveness (PSLF) program that cancels student loandebt after 10 years for nonprofit workers, I wasn’t that excited. My thinking was that many student loans are on a 10 or 15 year repayment schedule and the savings wouldn’t be that substantial.

Income Based Repayment Calculator

Income Based Repayment Calculator

I changed my tune big time when I learned about a second program called Income-Based Repayment (IBR) that works in tandem with public service loan forgiveness. Designed to assist low income/high debt student borrowers, IBR lets people making AmeriCorps/VISTA/grassroots nonprofit-level wages make student loan payments as small as 0-$5 per month (based on income) and those payments count toward the 10 years needed for borrowers to get their larger debt forgiven.

The reason I write this now is that the Income Based Repayment program begins next month. If you are interested, first learn more about it, then search for it on your lender’s website and apply for the program online.

Finaid. org offers a really great calculator that shows how much you might save (or not) using these programs versus a standard loan repayment program. Even if you’re income is higher than average for the nonprofit field, the program could offer substantial savings.

I also prepared a two-page draft document on the information most relevant to members serving in AmeriCorps or VISTA. Like I said, this is a draft document and I will be revising and simplifying it as my understanding of these programs evolves.

You can also take a look at this post about the College Cost Reduction and Access Act that offers some basic facts and resources.

New Podcast: Grad School Financial Aid for Professionals

Photo via the East SA blog

Photo via the East SA blog

The newest Idealist podcast features Regina Garner, Director of Student Financial Services for the Monterey Institute of International Studies.

Idealist.org’s Jung Fitzpatrick talks with Regina who dispels some common myths that working professionals have about qualifying for financial aid and to learn more about the ins and outs of financial aid for graduate education. Listen now!

Whether you’re thinking about graduate school–or are already on your way–this podcast helps answer many questions about the financial aid process. Topics include the basics of how financial aid is determined, the role of The College Cost Reduction and Access Act of 2007 in debt forgiveness and loan repayment as well as other issues for professionals transitioning to graduate school.

If you have more questions about grad school, check out our free Public Service Graduate Education Resource Center, which in addition to articles on financing your graduate education, includes information on preparing for, applying to and alternatives to graduate school. You can also post questions to our Graduate Education Forum! Follow Idealist’s GradResources on Twitter.

Also be sure to check out the upcoming Graduate Degree Fairs for the Public Good this summer in Washington D.C. and New York City and this fall in 16 cities in the United States and Canada.

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Corps Finances: The Problems of Unbanked and Underbanked

Barriers to banking are highlighted in results of an FDIC survey published earlier this year, with implications for corpsMixed Cash by Stopnlook, Flickr Creative Commons members and the communities they serve.

An important gateway to building financial assets is having a checking and savings account at a bank or credit union. People without an account at a mainstream financial institution are less likely to own a home or other significant assets, and more likely to pay higher transaction fees for cashing their paychecks, taking out small loans, and remitting money to family members in other countries. Also without an account to deposit money in, cash can be more easily stolen, lost (as in a house fire), and spent.

Meet the unbanked and underbanked members of the community. According to the FDIC, “unbanked” refers to people Continue reading

Career Tip: Timing Your Job Search and Supporting Yourself During the Transition

April To-DoIf you aim to move onto a salaried job after your service term ends, you may be facing some big logistical challenges — when do you start actively looking for your next job? If you don’t have something lined up when your term ends, how do you support yourself till you land that job?

When to Start Your Active Job Search

Regardless of your service corps, your term probably has a definite end date.  If that is the case, lining up a job can pose tricky questions, such as when do you start applying for jobs? And when, during the application process, do you let the hiring team know your availability limitations?

When to start your active job search—sending in applications—is a little fuzzy. The typical job search takes about six Continue reading