<p>Do private college grants pay for room and board or just for tuition? I was told that they don't pay for room and board as room and board is not considered a qualified educational expense and that if the grant did cover room and board it would be considered full taxable income by the IRS.</p>
<p>Is this true?</p>
<p>Thanks in advance,</p>
<p>Peter</p>
<p>If you are fortunate enough to receive grants that are in excess of your tuition costs, yes, they can cover room/board, even books. BUT since room/board are NOT qualified expenses, any financial aid you receive that covers them IS considered taxable income for IRS purposes. The taxes you MIGHT pay would be far less than the cost of room/board each year. Remember that you have a standard deduction that will mean that some of this is not taxed anyway.</p>