What is the Californians For All College Corps, and is it worth it?
As parents, we constantly struggle to strike a balance between providing for our children and not over-doing it, which can hinder their own growth to become an engaging member of society. For California families with college age children, the Californians For All College Corps is an opportunity to teach financial responsibility and civic obligation to young adult children. This blog discusses what the College Corps program is, and if California families should consider getting their children involved.
What is the Californians For All College Corps program?
Over the next two years, if your child attends one of the 45 schools (including UC and some CSUs) for undergraduate degrees, your child may be eligible to apply to the Californians For All College Corps. This would involve 450 hours of community service within one academic year to earn a $7,000 stipend (living allowance) plus a $3,000 Education Award. The community service aspect of the College Corps program will focus on three key areas: K-12 Education, Climate Action, and Food Insecurity.
If you are interested in having your college age child participate in the Californians For All College Corps, you’ll need to keep a look out for the application coming up in March of 2022.
Is the College Corps program worth it for California families?
It’s possible that $10,000 may be an insignificant sum given the overall cost of college, but the intangible benefit of having young adults engage in the community and earn toward their education is invaluable.
Coming from Asian culture, I grew up in an environment in which most parents who could shoulder the cost of college would tell their children: Don’t do anything else! Just focus on your schoolwork and do well! This is a very traditional Asian value which places academic achievement over everything else.
Not all education comes from textbooks. Frankly speaking, this type of emphasis on academic achievement does not always benefit our next generations given the competitiveness in today’s job market. The skill sets and aptitude learned outside of classrooms can really set kids apart from the competition and prepare them for the “real world.” More importantly, we are seeing a dire need to train our next generation to be more engaged in the community around them and to build commonality and a sense of belonging.
Is participating in the Californians For All College Corps program worth it? It’s a personal decision for every family to make. However for the right person, getting the chance to do community service and earn money towards their education is a wonderful opportunity.
How will it impact my family’s finances?
Awards received in the Californians For All College Corps program have financial implications that families should be aware of, and need to factor into their planning.
The $7,000 portion of the award is a living allowance stipend, and it may be treated as taxable income for the student. Therefore, at the end of the year, your participating child may or may not receive a 1099-MISC for the award. You will need to check with your tax professional on the taxability of the award.
One note to make here is that recently the IRS amended Publication 590-A stating that a taxable stipend can be treated as earned income for IRA contribution purposes, but only if the student is in pursuit of graduate or postdoctoral study. This stipend from the Californians For All College Corps is meant for undergraduate students. It therefore cannot be used as earned income for IRA contribution purposes, even though it is treated as taxable income.
We recommend that you check with your tax professional about the potential tax ramifications if your child participates in this program. You should also check to see if the stipend and award may impact other financial aid your child is receiving.
Concluding thoughts
The Californians For All College Corps is a tremendous opportunity for the right family, but it also has to make sense financially. We are a wealth management firm in La Jolla serving families across California and the country. If you would like to consult with us on this decision, please reach out.
Contributor
Ellen Li is a partner at Financial Alternatives and a lead advisor for many of the firm’s clients and has a special focus on financial planning. Ellen has an MSBA degree in Financial and Tax Planning from San Diego State University and she holds the CERTIFIED FINANCIAL PLANNER™ designation. She is a member of the Financial Planning Association (FPA).