Financial Aid – What to Count and When

Written by Lois Churchill, Spectrum Enterprises

We still see some confusion as to when to include financial aid as income and what to count so I thought I’d go back over it.

On July 24, 2012 HUD published in the Federal Register an updated list of income inclusions/exclusions. On December 14, 2012 HUD published an amended updated list of income inclusions and exclusions. One of the amendments concerned financial aid.

Exclusions:

(viii) Amounts of scholarships funded under title IV of the Higher Education Act of 1965, including awards under federal work-study programs or under the Bureau of Indian Affairs student assistance programs. For section 8 programs only, any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965, from private sources, or an institution of higher education (as defined under the Higher Education Act of 1965, shall not be considered income to that individual if that individual is over the age of 23 with dependent children (italics and underlining added for emphasis).

So, for your tax credit property you would not count as income any awarded grants or scholarships if the applicant/tenant does not have subsidy. If the applicant/tenant family does have subsidy and the individual receiving the financial aid is a child of one of the adult household members you don’t count the grants or scholarships. Otherwise, unless the applicant/tenant is 24 or older (over 23) with a dependent child, verify the amount of grants/scholarships received and also verify the amount of tuition and all other required fees the school charges (books don’t count, room and board doesn’t count, meals don’t count) and determine if there’s any countable income.

Let’s look at an example. The University of Maine charges in-state undergraduate students $253 per credit hour for tuition. On top of that they charge all students attending classes in Portland or Gorham a $28 per credit hour “Unified fee”, a “Student Activity” fee that varies based on the number of credit hours taken ($55 for full time students), a “Transportation Fee” which is again based on the number of credit hours taken ($110 for full time students), and a “Student Health Fee” of $80. This additional $273 would be added to the calculation for cost of tuition per semester.

The web site also references Course Fees – these are mandatory fees only if the student takes specific courses so don’t include in your calculations unless you specifically see them on the student invoice. For example if the college charges a $250 lab fee for Biology students but the applicant/tenant you are processing isn’t taking Biology it’s not a fee for that applicant/tenant.

We have updated our Financial Aid for Students form to ask about mandatory fees. You may find this form on our web site.

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