Hi! I have a couple of questions about the disbursement process when it comes to scholarships and such. I’m attending the University of Florida next year and I have enough scholarships and grants that covers my entire COA. I was wondering how the money is disbursed?
This is the COA breakdown:
Tuition / Fees $6,310
Books and Supplies $1,300
Computer/Cell Phone $1,260
Housing $5,420
Food $4,230
Transportation $1,100
Clothing Maintenance $700
Personal $270
Total: $20,590
My financial aid consists of:
Federal Pell Grant $5,775
FL Assistance Grant $2,210
Federal Supplemental Grant $200
Machen Florida Opportunity Scholarship $10,095
FL Medallion Scholar (Bright Futures) $2,310
Total: $20,590
The MFOS covered all my unmet need which was the point of the scholarship. Once the school takes out the funds for tuition and housing, where does the rest of the money go for my books and supplies, computer/cell phone, food, transportation, clothing maintenance, and person costs that is part of the COA? Can anybody explain how this works? I’m a first generations student and my parents only speak Spanish and don’t know anything about how this works either.
Also, when I log into the financial aid package for my school it asks if I want the school to use my Federal Title IV financial aid (grants and loans) to pay charges other than tuition, on-campus housing, and books that appear on your account. These charges may include meal plans, laser prints, health care services, and parking decals or tickets. When my financial aid is disbursed, it will be applied to these charges. Should I allow the school to do this? I have always just clicked continue to see my package, but I was wondering if I should do this.
Thank you in advance for any information!
Most of the money won’t be disbursed until after school starts. The BF money won’t ‘clear’ until after the drop/add date because it is based on the number of credits you take. Often schools allow you to charge books and things at the bookstore and then that is paid from your funds too. Check with the FA office to see when the check is sent to you or when it is put onto a debit card. My DD had 3 options for a refund - check (took the longest), credited to a debit card issued by the school (but there was a service charge to get the money from an ATM) or direct deposited into a bank account (this worked best for us)
Yes, I think you should allow your other charges to be taken from your aid package, otherwise you’ll have to pay up front.
All bills will be posted in your student account while the scholarships and grants should be deposited into your student account too. @twoinandone is right that the disbursement of grants/scholarships may be a little bit late. Check if you would be late for any dues. There are usually payment plans and you may need to pay in advance out of your pocket and then get the money back later to avoid late charges.
Know that you will need to pay taxes on the amount over qualified educational expenses -tuition, fees and books and maybe computer. The taxes owed will be at your parents income rate. Taxes will be around 10%-15% of everything over the QEE, and will be payable in April of 2016.
^That doesn’t sound right…what about the standard deduction?
No, it won’t be paying taxes on everything over QEE. The student will get their $6300 standard deduction to subtract from all income including the taxable scholarship/grant amount. Only if the school or program requires a computer would it be QEE. Few actually require a computer.
OP, you should read chapter 1 of IRS Pub 970:
http://www.irs.gov/pub/irs-pdf/p970.pdf
Do your parents have someone do their taxes? You should make your parents aware of this so it doesn’t come as a surprise next January.
Right. I forgot about the standard deduction. My point still holds that the student should save some for taxes. He has $12000 of non-qualified scholarship money that will be taxed. My daughter has a little more and her tax bills have been $800 -1100 depending on job withholding. I prefer that student know this beforehand. That is a difficult amount of money for a low income family to have to come up with if they weren’t aware.
@annoyingdad @Yankee Belle I don’t understand. I’m going to have to file taxes next year (2016) because of my scholarship money? Or pay taxes? I’m not sure what you guys mean. 
my mom has someone that does her taxes because she doesn’t speak English or understand any of that. My mom only makes $16000 a year so i don’t know what the tax will be based on her income level.
Yes, you will have to file and pay income tax on the scholarship money you receive that pays housing, board, personal, transportation and other non-educational expenses. Prepare in advance by setting some aside.
Did you read Chapter 1 of IRS Pub 970 as mentioned? Yes, the amount of scholarships and grants that exceeds the cost of tuition, mandatory fees and required books and supplies is taxable income to the student. With your mom having a low income it may not make a difference if her tax rate is used but form 8615 may have to be filed. Can your mom talk to the person who does her taxes about this?
ETA: If UF bills the amounts for spring 2016 and credits spring 2016 scholarships/grants in January, then for 2015 you may not have enough to be required to file or pay any tax for 2015. Part of that will depend on how much other income you have during 2015.