Sen. Christopher Dodd, Democrat of Connecticut, plans to introduce legislation on Friday to increase the value of the educational awards earned by participants in AmeriCorps, the federal national-service program, and make them tax-exempt.

The senator, a former Peace Corps volunteer, plans to introduce the AmeriCorps:Together Improving Our Nation (ACTION) Act of 2008, according to a statement from his office.

People who complete a year of full-time service in AmeriCorps, often at nonprofit groups, now receive $4,725 in money they can use to take college courses. The new legislation would raise that amount “to reflect the rising cost of college,” the statement said.

Senator Dodd has scheduled a news conference on Friday to provide further details of the legislation, which would also make the chief executive of the Corporation for National and Community Service—the federal agency that operates AmeriCorps—a member of the president’s cabinet.