Frequently Asked Questions: IDEA Scholarships and Service Obligation
For Students Receiving Financial Assistance From IDEA Training Grants For Master’s Level Training
1. I want to work full-time after I complete my program. What if I can only get a part-time job?
The U.S. Department of Education recognizes that some students may not be able to arrange for full-time employment, or may choose for their own reasons to work part-time after completing their program. Part time employment may be used to accrue the hours necessary to fulfill the Service Obligation. If your Service Obligation is two years of full time employment, and you work half time, then it will take you four years to complete the Service Obligation. This is not a problem as long as the total time period within which the Service Obligation must be completed is met. Students with a Service Obligation under IDEA have three years, plus the number of years they owe in which to complete their Service Obligation. Thus, a person with a 2 year Service Obligation must fulfill that Service Obligation within 5 years of completing their program (the sum of the number of years of the Service Obligation plus 3 years).
2. I decided to study special education because I want to work with children who are at-risk of failing in school. If I get a job teaching at-risk children, will this count towards fulfilling my Service Obligation?
The purpose of the IDEA training grant program is to increase the number of qualified personnel to provide special education, related services and early intervention services to children with disabilities. If you will be working with ‘at-risk’ children who are ages 3-21 who have disabilities as defined under IDEA, or who are infants and toddlers with disabilities or who are at-risk of developing disabilities, your employment will almost certainly count towards satisfying your Service Obligation. However, if you will not be providing special education, related services or early intervention services to children with disabilities as defined by IDEA, you will not be fulfilling your Service Obligation nor acting consistent with the intent of the law. For early intervention providers, a special rule applies: providing early intervention services (EI) to at-risk children who do not have disabilities will satisfy your Service Obligation as long as these children and families are eligible for IDEA’s EI services in the state in which you work.
3. Can I work for a community nonprofit organization or private school, or must I work in the public schools in order to have my job count towards the Service Obligation?
There are no restrictions on the former student’s place of employment. The key points are: a) that you must be providing special education, related services or early intervention services to children with disabilities as defined under IDEA; and b) a majority of the children you serve must be children with disabilities, or the majority of time you spend in your job must be in the provision of services to children with disabilities. In other words, the children you work with must have IEPs or IFSPs and be considered in your state to be children served under IDEA and applicable state law as children with disabilities.
Many infants and toddlers with disabilities, as defined by IDEA, are served by community agencies rather than by the public schools. Further, some school age children are educated in private schools on behalf of the public schools. While most special educators are employed by the public schools, some are not. As long as the work you perform is largely with children with disabilities as defined by IDEA, your job will count towards satisfying your Service Obligation. When the time comes for you to search for a job, CUA Department of Education faculty and prospective employers can help you get the information you need to be sure your employment will count towards your Service Obligation.
4. After I finish my program, I plan to go overseas for two years to work as a volunteer for my church. Can I postpone my Service Obligation to do my volunteer work?
The answer to your question is “Probably yes, depending on the length of time spent in volunteer work..” After completing your training program you need to plan your time carefully. You are not required to start the employment that will count towards satisfying your Service Obligation immediately after completing your training. You are, however, required to completely fulfill your Service Obligation within a specific period of time. You have 3 years plus the number of years you ‘owe’ in work to fulfill your Service Obligation. Thus, if you received scholarship assistance for two academic years you will need to work full-time for the equivalent of four years to satisfy your Service Obligation; you must finish satisfying your Service Obligation within 7 years (4 + 3 years). In the extra three years, you would have time to carry out a two-year volunteer activity with your church. The key here is that you must complete your Service Obligation within the period that applies to your particular Service Obligation. As long as you meet the timeline, no special request or formal deferral is necessary.
· If you need more time to satisfy your Service Obligation and have a permissible reason, you may be able to get a deferral or extension of your payback deadline. There are a limited number of activities that may qualify you for such an extension, thus permitting you additional time in which to fulfill your Service Obligation (in the case above, to be granted more than a 7-year payback period). The CUA Department of Education is following the federal regulations in granting deferrals. These regulations list ‘allowable’ circumstances students might face that would authorize the CUA Department of Education to grant such a deferral. However, under current regulations, church work is not one of these circumstances. Upon request, deferrals may be granted by the CUA Department of Education if a student meets any of the following conditions:
· is engaging in full-time study at an institution of higher education
· is serving on active duty as a member of the US armed services (up to three years)
· is a volunteer under the Peace Corps Act
· is a full-time volunteer under Title I of the Domestic Volunteer Service Act
· has a disability that prevents him/her from working (up to three years)
· cannot work because he/she is caring for a disabled family member (up to one year)
5. I am receiving IDEA scholarship support for my Master’s training program. I plan to enter a doctoral training program immediately after completing requirements for the master’s degree. Will I be able to postpone my Service Obligation until after I finish my doctoral training program?
Yes. As mentioned in the answer to question # 4 above, the CUA Department of Education is authorized by the IDEA final regulations to grant deferrals or extensions of the deadline for completing the Service Obligation for students who are engaged in full-time study at an institution of higher education. When you complete the doctoral training program the Service Obligation ‘clock’ will start up. That is, if you owe four years of service for two years of IDEA financial assistance that you received for your Master’s degree studies, you will have seven years after you finish your doctorate in which to satisfy your earlier Service Obligation.
6. My wife and I are planning to move to Central America right after graduation. We want to teach special education there for 3 or 4 years and want to know if that employment will count towards our Service Obligation.
Probably not. If you will be teaching US citizens or residents who are being served under IDEA, your work might count, as long as it conforms to all the other employment requirements established for this scholarship program (e.g., work is full-time or can be accumulated to a full-time equivalent; you work for a majority of time with children served under IDEA; etc.). For example, your work might well qualify if are teaching in a US Department of Defense overseas school. On the other hand, if you will be teaching children with disabilities most of whom are not US citizens, you won’t be able to count that employment towards satisfying your Service Obligation. The IDEA training grant scholarships are intended to prepare people who will work in the special education field serving US children in order to help decrease personnel shortages in special education and improve quality here. By granting you a scholarship, you are expected to work in the special education field serving children with disabilities who are US citizens and residents until you meet your Service Obligation. Once you’ve satisfied your Service Obligation, you can be employed in any job you like, anywhere in the world.
If your overseas work will not count towards satisfying your Service Obligation, but lasts only three years, you may still be able to fulfill your Service Obligation on time by subsequently working in the US (or in a US dependent school) as long as the other employment conditions are met. Finally, if you find that your career path takes you in another direction and you choose not to satisfy your Service Obligation through work, you may arrange with the US Department of Education to satisfy the Service Obligation by paying back the government the amount of money your received in the form of the IDEA scholarship. Interest and collection fees may be added, at the discretion of the federal government.
7. I’ve heard I have to work only with children with disabilities. I expect to get a high school teaching job where students with disabilities and non-disabled students attend the same classes. If I teach in this kind of class, will the work count towards my Service Obligation?
The law requires that in order for your work to count towards meeting your Service Obligation you must be providing special education or related services to children with disabilities, or early intervention services to children with disabilities or their families. In order for the CUA Department of Education to count your employment towards meeting your Service Obligation, you must be in a job in which you are working with children with disabilities as defined by IDEA. The kind of job you describe may qualify as employment that counts toward paying off your Service Obligation. In your job, you must either provide special education (or related services or intervention services) to a majority of students who have disabilities or spend a majority of your work time providing special education (or related services or early intervention services) to students with disabilities. If the primary purpose of your being in the general education setting is to provide IDEA services, then your job should count toward the Service Obligation. Since the goal of the IDEA training grant scholarship support you receive is to increase the number of qualified special educators, the law and regulations require that a significant amount of your work time be spent in the education of children with disabilities.
8. I want to be a school psychologist (or special education teacher or early intervention provider), but wonder what happens if I change my mind while I’m still in school. If I accept a scholarship for a year, then change my mind and switch to another program or drop out, do I still have a Service Obligation?
We recommend you be as certain as possible that you want to complete the training program you are entering before you accept an IDEA training grant scholarship. If you don’t complete the program you will still have a Service Obligation to the federal government for the amount of the scholarship assistance you received prior to leaving the training program. However, if you do not have the necessary credential to work as a special education teacher, related services provider or early intervention provider in your state, you will not be able to perform work that will enable you to satisfy your Service Obligation through service. And, if you cannot fulfill this Service Obligation by providing special education, related services or early intervention services, as defined by IDEA, you will be asked to reimburse the government for an amount of money equivalent to the value of your IDEA training grant scholarship, plus interest and collection fees. The CUA Department of Education is also obligated to report to the federal government when it becomes clear that you will not be able to complete your Service Obligation within the allotted amount of time.
9. Is there any way of avoiding the Service Obligation? Can exceptions be made under any circumstances?
Exceptions to the Service Obligation are allowed under very limited circumstances. An exception, in whole or in part, may be granted by the CUA Department of Education if a student:
§ Is unable to continue the course of study or perform the Service Obligation because of a disability that is expected to continue indefinitely; or
§ Has died.
Students who are unable to repay the scholarship assistance through work, or prefer not to, can repay it by reimbursing the federal government, as described above under question #6.
10. What will happen if I don’t keep the CUA Department of Education informed about my employment and/or about how to contact me?
Under IDEA institutions receiving grants under the program have an obligation to verify that students who receive financial assistance from an IDEA training grant satisfy their Service Obligation. If we lose contact with you, we will attempt to re-establish contact with you using information in your University records. In order for us to meet our responsibility to the federal government, the CUA Department of Education will inform the federal government when students have not supplied CUA with employment information needed to track progress in meeting the Service Obligation and/or when contact with students cannot be re-established. We fully expect the federal government will make efforts to locate students once we’ve reported that CUA is unable to track those students’ progress in satisfying their Service Obligation.
11. What will happen if my work does not meet the Service Obligation but I do not plan to pay back the money I owe?
Once it becomes clear that you cannot satisfy your Service Obligation within the period of time designated for you at the completion of your program, or if you inform us that you will not repay your Service Obligation through work and will not pay back what you owe to the federal government, the CUA Department of Education will provide that information to the federal government. We fully anticipate that the federal government will then proceed with efforts to collect the outstanding portion of the financial assistance you received for your training.
12. I am attending a part time masters program, which takes 18 months to complete one full time academic year. What is my Service Obligation upon graduation?
The regulations define “academic year” for part time students as the equivalent of a full time academic year based on the accumulation of part-time periods of study. Thus, your Service Obligation would be to work in the required setting for a period of two years.
13. Is the grant I receive taxable?
Under Internal Revenue Code § 117 (a ) any amounts received in excess of qualified tuition and related expenses must be reported as taxable income. The difficult question here is whether or not the payment made for tuition and related expenses is for the primary purpose of assisting in the individual’s educational studies or whether it represents a payment for past, present or future services rendered. As noted by a college and university tax expert, this “is an issue that has confounded the IRS, taxpayers, and the courts since the enactment of section 117 in 1954. ”
Given the uncertainty in this area of the law, the answer to this question cannot be taken as individual tax advice, and if necessary, you should consult a tax attorney who can help you answer this question. IRS determinations are very fact intensive and they have taken the position that , “although scholarships that represent payment for services are not excludable under current law, not all grants that are subject to conditions or limitations represent payment for services. Determining whether a particular awards program makes compensatory payments within the contemplation of section 117(c ) of the Code is an inherently factual matter, requiring a consideration of the nature and extent of the impositions, and of all other relevant facts and circumstances of the program.”
Subject to the qualification that this is not to be construed as advice of legal counsel for your particular situation, what follows is some guidance that might be useful.
The relevant portion of the income tax regulations are contained at 26 CFR§ 1.117-2.
§ 1.117.2(a) provides in part as follows:
Individuals who are candidates for degrees--(1) In general. Under the limitations provided by section 117(b)(1) in the case of an individual who is a candidate for a degree at an educational institution, the exclusion from gross income shall not apply (except as otherwise provided in subparagraph (2) of this paragraph) to that portion of any amount received as payment for teaching, research, or other services in the nature of part time employment required as a condition to receiving the scholarship or fellowship grant. Payments for such part-time employment shall be included in the gross income of the recipient in an amount determined by reference to the rate of compensation ordinarily paid for similar services performed by an individual who is not the recipient of a scholarship or a fellowship grant. A typical example of employment under this subparagraph is the case of an individual who is required, as a condition to receiving the scholarship or the fellowship grant, to perform part-time teaching services. A requirement that the individual shall furnish periodic reports to the grantor of the scholarship or the fellowship grant for the purpose of keeping the grantor informed as to the general progress of the individual shall not be deemed to constitute the performance of services in the nature of part-time employment.
(c) Amounts paid as compensation for services or primarily for the benefit of the grantor. (1) Except as provided in paragraph (a) of §§ 1.117-2 and 1.117-5, any amount paid or allowed to, or on behalf of, an individual to enable him to pursue studies or research, if such amount represents either compensation for past, present, or future employment services or represents payment for services which are subject to the direction or supervision of the grantor.
(2) Any amount paid or allowed to, or on behalf of, an individual to enable him to pursue studies or research primarily for the benefit of the grantor.
However, amounts paid or allowed to, or on behalf of, an individual to enable him to pursue studies or research are considered to be amounts received as a scholarship or fellowship grant for the purpose of section 117 if the primary purpose of the studies or research is to further the education and training of the recipient in his individual capacity and the amount provided by the grantor for such purpose does not represent compensation or payment for the services described in subparagraph (1) of this paragraph. Neither the fact that the recipient is required to furnish reports of his progress to the grantor, nor the fact that the results of his studies or research may be of some incidental benefits to the grantor shall, of itself, be considered to destroy the essential character of such amount as a scholarship or fellowship grant.
The general rule then, is that a scholarship or fellowship represents payment for services when the grantor requires the recipient to perform services in return for granting of the scholarship or fellowship.
Please contact the Project Director of the training grant you are funded under if you have other questions or would like clarification of anything you’ve read here. Your questions will help us improve this FAQ resource for other students.
Last Revised 14-May-04 02:30 PM.
