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

When 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

Do volunteers make a difference in kids’ lives?

The impact of service on the person who serves may be immediate, but a volunteer might never see the impact he had on the community. I found a story in the NY Daily News about a VISTA from the late 60s named Michael Gaines who has returned to the site where he served to see if he can learn anything about the lives of the children he served. The story has no closure yet, but I will keep my eyes peeled for developments.

AmeriCorps*VISTAs Blog on Grad School for Idealist.org

A former AmeriCorps*VISTA Leader and a current AmeriCorps*VISTA participate in Idealist.org’s Grad School Blog Project

Officially launched this week, a network of 12 bloggers — students, seekers, and admissions staff — are blogging about grad school. The project is a part of Idealist’s Public Service Graduate Education Resource Center.

Vanessa Mason is a prospective public health student and is a current AmeriCorps*VISTA member serving with a refugee-focused nonprofit in Houston. She blogged about the relationship between refugees and public health this week as part of the refugee-themed Bloggers United day:

…Since I have started working as an AmeriCorps VISTA for the Partnership for the Advancement and Immersion of Refugees, this has taken on a newfound importance for me to raise awareness about the challenges that refugees face. This cause is particularly personal after meeting some of the children that have been directly affected by the escalating crisis in the Democratic Republic of Congo. Violence in recent weeks has escalated to an untenable level. While violence is an obvious contributor to the high mortality rates, the majority of deaths are caused by preventable and treatable diseases. (Read more…)

Vanessa blogs at Subject to Change. You can also follow her on Twitter.

Eileen Gallagher is a Masters candidate at Brandeis Heller School for Social Policy and Management. After graduating from college, she served as a VISTA on campus, “working with students to plan service events, running a tutoring program in local elementary schools and functioning as part of the college’s student affairs staff.”

Originally interested in higher ed administration, her experience in VISTA shifted her career goals.

She says, “I knew that I loved the community that I had built in small-town Meadville and the way that I saw people banding together to create change. I wanted to study ways to use the resources that a community has to create change.”

So, she says:

“I narrowed my interests to the fields of community development, nonprofit management or business. I decided that a business degree would allow me to gain the management and technical skills that I was interested in, as well as experience in leadership and organizational behavior. I looked specifically for programs that had coursework or a concentration in community development or socially responsible business.  I also examined the list of schools that match the AmeriCorps education award.

This list is precisely how I found Brandeis’ Heller School, where I am currently enrolled in the Master of Business Administration program.  When I looked at the website for this program, I saw that Heller’s motto is ‘Managing for a Social Mission.’  I was hooked!  This seemed like the perfect fit for my interests and ambitions.”

Eileen blogs for Social Impact MBA.

Read more about the Grad School Blog Project. Find more grad school bloggers and check out Idealist’s Public Service Graduate Education Resource Center. Apply to be part of the project—we are especially looking for bloggers in the fields of journalism, public interest law, public policy and administration, international affairs, and theology. The Project would also love to hear from more men!

Michelle Obama talks about AmeriCorps

In a post-election interview with Newsweek, Michelle Obama talks about potential expansion to AmeriCorps and national service, as well as her association with Public Allies. Again, with the economy such an issue, it’s great to see that national service isn’t getting placed on the back burner!

(See also this post about Public Allies press coverage since the election.)

Change.gov

I checked out the presidential transition Change.gov website today to see if I could find much about national service. Yikes, it’s a high enough priority that it even gets its own tab (“America Serves”) across the top of the page! There isn’t that much content yet (but that might change by the time you click your way there. I am hopeful that national service will be less of a White House pet project than one of the primary solutions to the many problems affecting the country.

To read more about Obama’s service initiatives, check out his pre-election stance. To read more about service programs currently available, including teaching corps, conservation corps, etc., check out our side bar — “corps and coalition,” categories, and tag cloud.

Eli Segal Fellowship

If you served with AmeriCorps or VISTA within the last three years and are looking for an opportunity to further explore and promote national service, learn more about the Eli Segal Fellowship. The position is located in Washington DC, it’s a 10-12 month term, and comes with pay and benefits. The deadline is October 6, 2008.

Those pesky student loans

Amy is off to New York to see Obama, McCain, and maybe President Clinton at the Service Nation Summit, while I’m stuck in Portland contemplating the nuances of financial aid. At the least the weather is as close to perfect as can be.

I learned more about the Public Service Loan Forgiveness program. That’s the new law that allows people working at nonprofits to have their student loans forgiven after 10 years of steady payments, starting from October 2007. (One of the catches is that you need to have Direct Loans, but if you don’t, you can consolidate.)

For me the downside of the program is that if you don’t have huge loans, at the end of ten years of steady payments there won’t be much of a balance to be forgiven. Still, getting any student loan balance off the books is a wonderful thing and should be taken advantage of.

But then I learned about another program called Income-Based Repayment, with huge implications for AmeriCorps and VISTA members, as well as others earning low pay while working in the nonprofit sector.

It comes online in July 2009.

In a nutshell, the Income-Based Repayment program sets your loan repayment amount at a rate of 15 percent of your discretionary income. Without getting too much into the math, if you are below the poverty line, your payments could be $0 per month. Sure interest will accrue, but the idea is if you serve in AmeriCorps or VISTA for a year or two and hold a low-paying nonprofit job for the next nine or ten years, you could get your entire loan debt erased without making a single payment in that time. (You should check the list of qualifying loans. If you don’t have them, consider consolidating.)

The trick with either one of these programs is to start planning now if you think you might be taking advantage of these programs.

I will write more later about the pros and cons of the Income-Based Repayment program vs. the forbearance CNCS offers to AmeriCorps and VISTA members.

Update 11/07, from Put Barber, Senior Researcher at Idealist.org:

The Department of Education has published final regulations for the College Cost Reduction and Access Act of 2007 (CCRAA). This Act provides for loan forgiveness for full time employees of “public service organizations.” Nonprofit full-time employees (at least 30 hours a week) who are making monthly college loan repayments can count each month of nonprofit employment towards the 120 months of payments needed to qualify for forgiveness of the remaining loan balance, beginning with payments after October 1, 2007. Current nonprofit employees with outstanding student loans of more than nine years future duration can look forward to an end to the loan payments in after about nine more years of work for nonprofits.

The National Council of Nonprofit Organizations (NCNA), along with other national groups, worked throughout the rule-drafting process to extend this provision to employees of all 501(c)(3) organizations. For more information, see a Q & A on the NCNA website.

The Byrds, Temptations, Lovin’ Spoonful and VISTA

A VISTA Campus web site has been launched to serve as a learning resource for VISTAs and supervisors. One of my favorite sections is an alumni page that includes audio files from many of the “Voices of VISTA” radio programs that aired during the 1960s. Musical performers who perform VISTA public service announcements include Otis Redding, Simon and Garfunkel, and Peggy Lee. Leonard Nimoy also did a Voices of VISTA spot, but for whatever reason it’s not included here.

When you click the link, log on as a guest to check out these sound files. You can also check out other sections of the campus.

A VISTA perk

Not only is VISTA service a great way to serve a year (or two or three) and get an award to help pay for school or repay student loans, it can also give alumni an advantage when applying for federal jobs.

Upon the completion of service, VISTAs receive a year of non-competitive eligibility for federal jobs. What this means is you can apply for federal jobs that are not open to the general public. (NOTE: This benefit only applies to VISTA and Peace Corps.)

This benefit doesn’t guarantee you a federal job, but as long as your qualified and there is an opening, you have a better shot at getting hired than someone who never served.

Here’s some additional info from cns.gov:

To establish your non-competitive status, you will need proof of eligibility. Once you have completed service, log onto the My AmeriCorps portal to print an AmeriCorps*VISTA certification letter. Visit http://my.americorps.gov to register at the My AmeriCorps portal. Click the “My Service Letter” link to create and print your letter. If your letter is incorrect or the portal cannot locate your record, please contact the VISTA Member Support Unit at VISTAMemberSupportUnit@cns.gov.

Submit copies of this statement with your federal job applications. Information on federal positions can be obtained from USAJOBS, the federal government’s one-stop source for federal jobs and employment information. USAJOBS is accessible at http://www.usajobs.opm.gov/.

Congressional action on AmeriCorps

Since Congress is in recess, here’s an update on two pieces of legislation relevant to the AmeriCorps world. H.R. 6407 is a bill in the House of Representatives that would eliminate federal taxation on the education award. You can track the progress of the bill through this website. There’s no way of knowing when there will be further action on the bill, or whether or not it will cover former VISTAs and AmeriCorps participants who graduated from the program already but who have not yet redeemed their awards. The bill still has a long way to go before passage, but it’s also the most movement I have seen on the ed award taxation issue I’ve seen since 2002.

On the Senate side, Evan Bayh of Indiana co-sponsored the AmeriCorps Act of 2008 in May. Passage of this bill would adjust the AmeriCorps/VISTA education award to $6,185 (from the current $4,725) and also get rid of the taxation on the award.