I contacted the Federal Student Aid Information Center twice, but received conflicting answers regarding a question I have about FAFSA and scholarships. Since the upcoming FAFSA uses 2015 tax information, do I list excess financial aid I received on this FAFSA or next year’s FAFSA?
The first person I talked to said I would list it on this FAFSA. The second person I talked to said they never list their excess financial aid on FAFSA. Basically, I’m not sure which person is correct (assuming either of them are correct, that is).
Tell us which specific FAFSA question(s) you are concerned about, and we will be much better able to help you.
If you have scholarships and grants that exceed qualified education expenses such as tuition, fees and books, and you then file a tax return reporting the amount of taxable scholarships as part of your AGI, you would report it on the FAFSA that uses the tax return info from the year you need to report the taxable scholarship.
For example, my D received taxable scholarships of $4000 in 2015. She also had $3000 in work income. So she needed to file a 2015 tax return and report the taxable scholarship and work income. She then reported the amount of taxable scholarships she listed on her 2015 tax return as part of her AGI on her 2016/17 FAFSA, question 44d. And since the 201718 FAFSA will use 2015 tax return info again, she will report the same on that FAFSA.
The taxable scholarships she receives in 2016 she will report on her 2016 tax return and list on the 2018/19 FAFSA.
OP, do you mean unspent financial aid that’s an asset sitting in your bank account?
Your question is unclear.
So my D had an AGI of $7,000 on her 2015 tax return. When she uses the IRS retrieval tool for the 2017/18 FAFSA it will bring over the AGI, income from working, and tax paid from her 2015 tax return right into the FAFSA. She then lists in question 44d that she reported $4,000 of taxable scholarships as part of her AGI, and the FAFSA formula will subtract it from her income.
So basically mommdc is correct, you report it in 2 places and they cancel out, not affecting your financial aid.
This can be seen when using my spreadsheets
see
http://talk.collegeconfidential.com/discussion/comment/19864471/#Comment_19864471
@BelknapPoint @Madison85
Sorry for not being more clear. To put things in perspective, I am currently a freshman in college so this is my first time receiving financial aid. I did not receive financial aid for the 2015/2016 school year since I was a senior in high school at that time. As a result, I am not sure if I list excess scholarships/grants on this FAFSA, or if I report excess scholarships/grants on the next FAFSA. As of October when FAFSA opens, I will have about $1,000 unspent financial aid in my bank account. Hopefully that is a little more clear now.
@mommdc Thank you for your input, your example helps me see what I will need to do once I file taxes in 2017.
Assets are reported as of the day you submit your FAFSA.
Unspent financial aid is not an asset.
Pick the best day for you to submit your FAFSA online (not necessarily October 1). For example it could be, the day before your parents get paid, and/or the day after your parents pay mortgage, credit card bills, and your tuition/housing so that cash in the checking account (“assets”) is lower.
You do not report FA that is still in your account as an asset. You should make sure you can show that it is the same $1000 (i.e., that your account has never gone below that $1000 balance). If the balance did drop below the $1000 and you then replaced the funds so that the balance is now $1000 again, that amount is no longer excluded and is now just a regular asset.
On Oct 1, you’ll file FAFSA. You’ll use your 2015 tax returns which will not show any excess scholarships as income. You’ll report your assets as of the date of filing, but you may exclude any funds in your accounts that are from FA (scholarships, loans). From what you’ve posted, you will not report the excess this year. The amount may be in your 2016 taxes as @mommdc described, and then you’ll net it out as also described.
Did you receive free money (not loans) in excess of tuition?
You don’t have to file ON October 1st.
@Madison85 Thank you for the tip!
@twoinanddone Thank you as well, your comment helped clear things up considerably.
As I’ve gathered from what’s been posted, I will not be reporting excess scholarships/grants on the upcoming FAFSA. Instead, that information will be taken into account when I file taxes next year, and excess scholarships/grants from this year will subsequently be reported on next year’s FAFSA.
My D had a financial aid refund this year from her subsidized loan. We put that $1700 in a separate account.
She will report as part of her assets the savings from her summer job, but not the loan refund.
No. If you have any excess scholarships or grants in your possession at the time you file FAFSA, that excess amount is reported on FAFSA (question 41).
FAFSA for the 207-2018 academic year will become available on October 1, but there’s no obligation to actually file on that date. In fact, for many students, wailting until a later date may be the best thing to do (depending on individual circumstances, of course).
@Madison85 Yes, they were not loans. The excess I have is from scholarships/grants.
@BelknapPoint Will reporting that count against me?
It seems as if some people report the refund and others don’t, so I’m not too sure which option to go with.
I believe you report the refund amount but it does NOT count against you in terms of how need based aid is calculated for the following year.
There is no “option.” There’s only a right way and a wrong way. The right way is to report excess scholarships and grants that you are holding as of the date that FAFSA is filed. Reporting the excess is a good thing, as it lowers the amount of assets that are considered in determining need-based aid.
“…as it lowers the amount of assets that are considered in determining need-based aid.”
???
I don’t think there is a way to report in the student asset section separately savings that are from work income and savings from financial aid. The understanding I have is that financial aid is not counted as part of student asset.
You’re right, there isn’t a separate field that asks for that portion of assets that represent a refund of grants and/or scholarships. But any such refund needs to be deducted before the student asset amount is reported in question 41, thereby lowering the amount of assets that are considered in determining need-based aid.
(That last part is for you, Courtney Thurston.)