IS a student able to “double dip/receive” both Athletic Scholarship $$ and need based federal $$ for an equivalency sport at a Dl or ll college. I was told you can choose one or the other but not BOTH
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Is that true? Even if the fed money is a Pell Grant???
What is your EFC??? Is it low enough to get a Pell Grant???
Fed money isn’t much so likely the athletic money is MORE.
Are you low income? Fed money from FAFSA app is for low income families.
Your EFC is $7000…that is too high for fed grants.
What “federal need based $$$” are you hoping to get?
Your student can take the unsubsidized Dorect Loan, if that is not already included in their financial aid package.
At many schools, your student’s athletic scholarship would reduce the financial need. Some schools do allow stacking of awards, but you would have to discuss this with the college directly.
I have always been curious as to how fed loans or fed Pell are used when there are athletic awards.
Can someone with a full ride athletic scholarship but has a 0 EFC get a full Pell? Normally pell is an entitlement, but I don’t know if there are special rules for athletic money.
The Pell is an entitlement. If you have a complete full ride, you will still get the Pell on top of that.
Correct, Pell is the one award that can be stacked on top of an athletic full ride.
If a student takes athletic money, he cannot take institutional need based aid without it being considered an athletic scholarship and counted against the team maximum amount of scholarships. He can take all federal aid, even if it is awarded at the discretion of the school (SEOG, work study, Perkins). He can take Stafford loans and Pell grants. He can take state need based aid. He can take any merit aid as long as it is available to all students on an even basis, even merit based scholarships one has to interview for.
A scholarship, internal or outside, that is granted based on any sport will be counted against the team limit, so if the high school football boosters award a scholarship to the best football player, that will count against the team total, and that same football player would have to report a golf award or scholarship from his old t-ball team (awarded for athletic performance).
At a few schools (Stanford being one) it is sometimes better to take the school need based aid rather than the athletic scholarship. There are still limits on some teams of the number of walk ons that can be on the team. It’s a balancing act.
The only real exclusion is institutional granted need based aid.
Since Pell is an entitlement and getting a full ride athletic award doesn’t stop that award, then I wonder why some univs complain that low income full ride athletes don’t have any spending money?? they get $5700 for spending money.
Most athletes aren’t on full scholarship, and even those who are have expenses that can’t be covered by the scholarships, including travel, personal clothing, dorm supplies, school supplies other than books. Until last year, food was restricted and I think a lot of athletes spent a lot of money on extra food. And of course not all get a full pell grant.
The power 5 conferences are now, as of Sept., allowed to give a stipend up to the COA, which had some coaches bitching just yesterday about how unfair that will be because some schools will give $4000 a year while others in the same conference can only offer $2000. It might not matter to Snoop Dog’s son, but to a lot of 17 year olds, that $2000 is a lot of money.
Of course, they also should be paying taxes on the full scholarship, pell grant money, and any other money, so maybe are using the pell grant to pay taxes?
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Yes, I meant those on full athletic scholarships, and I believe they are given travel allowances as well.
I know that football players (many low income) are on full scholarships, they get BIG meals, their health plans are paid for as well …and yet there has been controversy that the low income ones don’t have any spending money…but the low income ones would have $5700 a year.
@twoinanddone Those on full ride athletic scholarships don’t pay taxes …at least they didn’t use to…has something changed???
Besides the big-name highly recruited football players, aren’t the majority of ‘athletic’ scholarships more of a token (eg low $$)? They may get need based help also, but very few full rides or even close based on athletics alone. Can anyone with a award winning athlete in something besides the sports that make schools money (football, baseball…?) comment?
From the IRS…
An athletic scholarship is tax free only if and to the extent it meets the requirements discussed below.
Worksheet 1-1. You can use Worksheet 1-1. Taxable Scholarship and Fellowship Grant Income to figure the tax-free and taxable parts of your athletic scholarship.
Worksheet 1-1.Taxable Scholarship and Fellowship Grant Income
- Enter the total amount of any scholarship or fellowship grant for 2014. See Amount of scholarship or fellowship grant, earlier. 1.
If you are a degree candidate at an eligible educational institution, go to line 2.
- Enter the amount from line 1 that was for teaching, research, or any other services required as a condition for receiving the scholarship. Do not include amounts received for these items under the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance Program. 2.
- Subtract line 2 from line 1 3.
- Enter the amount from line 3 that your scholarship or fellowship grant required you to use for other than qualified education expenses 4.
- Subtract line 4 from line 3 5.
- Enter the amount of your qualified education expenses 6.
- Enter the smaller of line 5 or line 6. This amount is the most you can exclude from your gross income (the tax-free part of the scholarship or fellowship grant) 7.
- Subtract line 7 from line 5 8.
- Taxable part. Add lines 2, 4, and 8. See Reporting Scholarships and Fellowship Grants , earlier, for how to report this amount on your tax return
It looks like only a tiny portion of an athletic scholarship would be subject to tax…too low to actually be taxed unless the person has other income. Since full ride athletes are required to have the meal plan and live on campus, that portion is not taxed like it is for everyone else.
Travel (from home to school, not on official trips) is not part of an NCAA scholarships. Until next year in the Power 5 conferences, the athletes got room and board, tuition and fees, books. Not COA. Now in the Power 5, they can get stipends up to COA. The teams could provide meals according to the general school cafeteria rules, so if the meal card was unlimited, fine. If it was a la carte, that’s what the players got. The team couldn’t provide meals at 3 pm or snacks if they didn’t comply with the rules (a bagel was a snack, a bagel with cream cheese was a meal).
Only 6 sports are headcount, meaning full ride, and only in Div 1, and only if the school wants to fully fund. There are some other sports where most of the team does get a full scholarship (hockey, women’s rowing). Not everyone is poor. The pell grant would be taxable to any athlete who otherwise has a full scholarship covering the QEE.
My daughter’s athletic scholarship is not full, and is taxed (because she exceeds QEE in scholarship money).
My DD was on more than a token scholarship, non -revenue sport. Roster was about 25 with 8 full scholarships per team. The top 5-6 received the lions share, with smaller amounts given to the less recruited players. Private, top university.
To contrast her experience, there were athletes on large roster sports (non-revenue) who barely got book money despite being highly recruited. Depends on the sport and how many scholarships are alloted.
TerryB15, it doesn’t matter if the team or school makes money. The number of scholarships per sport is regulated by the NCAA. At Hopkins, lacrosse probably is a money maker (although the good will would be hard to measure), but it gets the same number of NCAA scholarships per team as a school that ranks 90th. Same with football, except there are levels within Div 1 whether the teams are top level.
How much the athlete gets in a non-headcount sport depends on the school (whether the team is fully funded), the number on the team, and the coach. Some coaches with 10 scholarships to give out will give 2-3 full scholarships and divide the rest among 20 other players. Some sports, swimming and track, have a lot of people on the team and only a few scholarships, so everyone might get $1000, or a few get full and everyone else gets book money.
mom2collegekids, I wasn’t sure from what you posted that athletic money was treated any different than other full scholarships. They are not, so therefore all the room and board money is taxable, the Pell, and now any stipends. If it’s not within the QEE, it’s taxable. No free lunch from the government, whether the bagel comes with cream cheese or not.
Tax-Free Expenses
Scholarships for tuition and fees required to attend the school qualify as tax-free treatment for athletes. Athletes can also exclude money for school-related books and supplies. However, these only count if it applies to every student in the class. For example, if everyone has to buy a copy of a certain textbook, and the athlete uses scholarship money to buy it, it’s tax-free. However, if the athlete goes out and buys some extra study guides with that money, that portion of the scholarship is taxable.
Taxable Expenses
In short, if the scholarship isn’t used for tax-free expenses, it’s taxable. Common taxable expenses include room and board, personal travel and other living costs. Say an athlete gets a scholarship that covers tuition, room and board. Even if the student lives on campus and has a meal plan, and never gets a paper check, his room and board portion is still taxable income.
Designated Scholarships
If the scholarship has to be spent on a particular expense, the tax treatment for the athlete is determined by that designation. For example, say an athlete gets a scholarship to cover half of tuition and half of room and board. Only the tuition portion is tax-free. If the scholarship doesn’t designate a specific expense, it’s taxed or not taxed based on what the athlete does with the money. If the athlete uses all of a $15,000 scholarship for tuition, it’s all tax-free. However, if she used 5,000 for room and board, all $5,000 is taxable.
@twoinanddone You are more familiar with partial scholarships. When sports like football award full head scholarships, which typically require particular housing and particular meal plans in order to play, then that is not taxed.
If the scholarship requires the student athlete to live on campus and use the university meal plan, the value of the room and board would then be excludable from gross income under § 119
Section 119 is about EMPLOYEE meals and lodging. Athletes are NOT employees. I would love to be wrong on this and I’d take the meals and lodging as tax free in a second (my daughter was required to live in the dorm and have a full meal plan). Everything I’ve found says athletic scholarships are treated just like academic scholarships for tax purposes. The following is from a piece responding to the Northwestern suit allowing a union to be formed by the football players, that unions are for employees, but that the football players will not be considered employees by the IRS.
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If this requirement isn’t met, the scholarship is fully taxable.
What types of education expenses qualify for tax-free treatment? The IRS says the exclusion applies to:
Tuition and fees required to enroll at or attend an eligible educational institution.
Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in the course of instruction.
Conversely, qualified education expenses do not include the cost of:
Room and board.
Travel.
Research.
Clerical help.
Equipment and other expenses not required for enrollment in or attendance at an eligible educational institution.
This leads back to the perception that scholarships—in particular those handed out to college athletes—are completely exempt from tax. Frequently, they are only partially tax-free.
Example: Suppose a football player gets a free ride at State University. The annual tuition and fees are $10,000 while room and board is $2,500. In this case, the student owes tax on $2,500 a year.
Taxable scholarship income is reported on the student’s 1040 (or 1040A or 1040EZ). Keep your clients informed so they aren’t blindsided come tax return time. More information is available in Publication 970, Tax Benefits for Education.
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Please prove me wrong. I would love for her scholarship to be tax free.
They are using the idea that athletes are in a pay for play situation with an employer/employee relationship. I don’t know if it applies to those with partial awards or those who aren’t required to have certain housing or certain meal plans.