<p>What are the rules regarding use of refunds from Pell Grants, Supplemental Educational Opportunity Grants, and Perkins Loans? The student is a part-time community college student, has one or possibly all of these types of federal FA, and lives at home with a single parent whose only income is SSI (social security disability). The student has summer jobs but does not work during the school year. When she receives a refund, she turns it over to her parent. I don't know how much the refund is. In the past, SSI and child support covered their living expenses. But child support ended with high school graduation, so now there may be a shortfall. I'm sure it's okay to apply grant and loan funds to off-campus living expenses during the school year. How are you supposed to document these expenses? What if the refund is more than the expenses? I am concerned that something fishy is going on. (And for what it's worth, the parent is a family member who thinks the refund can be counted as income when applying for a mortgage. Aargh.) </p>
<p>I probably could have googled this, but CC is always quicker and clearer!</p>
<p>I am not sure I am understanding your question 100% but a refund can be spent on whatever the student wants. There is no need to document how it is used.</p>
<p>As far as I am aware, there are no rules or requirement to document how the funds are used. Financial aid is of course supposed to be used for education related expenses, but as a school’s COA (that aid is based on) includes room and board, travel, personal expenses etc., it is pretty hard to define what exactly would or would not qualify. </p>
<p>Is the student turning the refund over to the parents to pay for room and board? I’d like to see a bankers reaction to someone trying to pass their students FA refund off as their income for mortgage application purposes. I seem to recall having to provide prrof of income when we applied for mortgages in the past.</p>
<p>Technically the money is going for room and board at home, so it sounds like it’s okay. It just made me uneasy to hear them talk about discretionary stuff (e.g., jewelry) they were going to buy when the refund came in. But that’s bad budgeting, not misuse of FA funds.</p>
<p>swimscatmom, I just rolled my eyes at the mortgage thing. This is a parent who does not live in reality and has spent her adult life learning how to game various systems (pretty effectively). I just don’t want her child to end up that way, too. At least the D is in college and doing well. I’m going to cross this one off my list of things to worry about for now.</p>
<p>Isn’t the student eligible for work study? It seems that would make the money go farther and wouldn’t count against them for financial aid.</p>
<p>If they took out more money from an education loan than they needed, as long as it doesn’t exceed COA, they could spend it I suppose, but that doesn’t sound very smart as they still will be required to pay it back.</p>
<p>The student can spend the money for their living expenses, but I would certainly advise them NOT to take any loans. If they are living low income, how are they going to pay back the loans later?</p>
<p>Mortgages require tax returns, that money is not going to be part of the AGI, I cannot see how it could be helpful.</p>
<p>If the student works during the summer and is also getting refunds of grant money, she needs to be aware that any grant/scholarship money that exceeds qualified education expenses will be taxable income to her. It may or may not put her into a high enough income to owe taxes, but she needs to be aware of it and have money put aside for taxes if she does hit that threshold.</p>
<p>CTTC, she’s not gaming the SSI system. She has a physical disability and probably also a mental illness diagnosis. (We don’t know the exact details of the latter.) My problem is that many people with her disabilities lead productive lives, including working. For whatever reason, she has not done so (by my standards, anyway). emeraldkity, I’ll ask her D about work study. I’m not sure why that isn’t part of the package. She wants to work but wasn’t able to find something during freshman year. I think she might not have loans, or at least I hope that’s the case. And the mortgage thing is pure fantasy on the mom’s part.</p>
<p>Slightly off-topic: The parent is my SD. We are just grateful that GD is in school. SD is not always forthcoming with accurate information, and I just didn’t want any fancy footwork with FA to cause problems for GD. It’s SD’s life, but both H and I have internal warning systems when we sense that a request to the Bank of Dad is about to happen–even though the BoD closed quite a few years ago. Thanks for all the useful advice. I really appreciate it–you saved me a lot of Googling time!</p>