How exactly does a "full ride" work?

Paying for College
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<p>If a student gets a true full ride of tuition, fees, room and board and then it also has an allowance for books, supplies, travel and "other costs" how does it work? Do you buy your books and things and the school reimburses you? Do you turn in your air ticket receipts and they reimburse you for that, too? Or is everything a set amount and they give you that money to dole out yourself for the things you need and leave it up to your judgement. You need more money for travel so you spend less for supplies, for example? </p>

<p>If the basic allowance of room and board is for the least expensive choice of each, could the student pay the difference if he wanted a better room, like a double instead of a triple, or more meals on the dining plan?</p>

<p>Also, more importantly, what part of the scholarship would be taxable to the student and at what rate if the student has no other income? </p>

<p>Thanks in advance for your reply.</p>

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<p>I have a ‘full-ride’ at a school in that all of my tuition/course fees are covered. Beyond that, I receive a living stipend that is pegged to a standard double on campus and the second-tier dining plan. If I choose to say, live in a ‘co-op’ on campus or get the cheapest dining plan, the difference is mine to do with as I wish (spending money, books, etc.). (This works nicely for students who get RA positions). If I choose to live off-campus another year, I get the entirety of the stipend. If I choose the max dining plan or live in a ‘newer’ dorm, the difference, again, is mine to pay. It doesn’t strictly cover books/personal expenses, but I’m planning on getting a job for that.</p>

<p>There are some full-rides that offer, as a part of their award, a set number of plane tickets home each year. I would assume that there is a travel agent that would do that booking.</p>

<p>And as far as tax issues are concerned, I believe that the portion of my scholarship that is taxable is my living stipend minus any required books for courses, whatever that works out to be. That will work out to be more than the personal exemption, but only by three or so thousand, and I’m not sure what rate that’ll be taxed at.</p>

3

<p>Thank you purpleacorn, that was so helpful! I appreciate you taking the time to answer. Does your school just credit the full amount to your student account and then charge away the tuition and fees and other set expenses and give you a refund of the portion for your personal expenses like the books?</p>

<p>I just went and calculated what changing to the next better dining plan or the next higher room rate and it’s a surprisingly small amount. I’m sure some savy finaid experts could tell me exactly how to best use the funds. Does anyone else know about the taxes? I did some searching and see that the the living expense part and travel portions are what are taxed, not the tuition, books, fees, etc.</p>

<p>Thanks again!</p>

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<p>Gah-- I should have been more specific; the tense in my previous post is all wrong-- I <em>will</em> have a full-ride, should I take it, next year. From what I’ve been able to gather on my banner acct, I will (have) receive a scholarship for the tuition/fees portion. The living stipend bit is fixed, and I’ve been told it’ll be like a refund.</p>

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<p>Thanks again. Good luck deciding. I hope you have lots of options once all the decisions are out!</p>

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<p>There are some full-rides that offer, as a part of their award, a set number of plane tickets home each year. I would assume that there is a travel agent that would do that booking.</p>

<p>I’ve never heard of that. That would be quite rare. Usually full ride offers (for undergrad) do not include things like travel or personal expenses. Usually full rides cover tuition, room, board. Some might give a small stipend - like $1000 per year - which often ends up going towards books. </p>

<p>So, to answer the OPs question: NO, you don’t usually send a bill to the school for plane tix or books. </p>

<p>Fido…are you asking about full ride merit scholarships? or are you talking about getting “need based” aid that meets need? </p>

<p>Schools that give lots of need based aid usually require the students to contribute a “student contribution” from summer earnings. so, you’d spend those dollars on your books and travel costs. Then you might be given work-study. Those earnings would go towards “personal expenses.” </p>

<p>But again, you don’t bill the school for your travel costs.</p>

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<p>Thanks mom2collegekids. DS was offered a merit scholarship, not need based.
It says it includes:
Tuition and Fees
$13,400
Housing and Meals
$11,978
Books and Supplies
$1,489
Transportation
$875
Other Education Costs
$2,934
$30,676 / yr Full cost of attendance (“Gift” Aid; no repayment needed)
There is no student or family contribution and no work study.</p>

<p>I am just trying to figure out how it works and what it will really cost in taxes. If DS has no other income, can you tell from the above figures what he would owe in taxes on this scholarship?</p>

<p>I didn’t think I just sent the school the plane ticket to reimburse us for travel but I did think that maybe he could use some of the book and supplies money and put it to travel so he could fly home a couple of times. I can’t even seem to match up the room and board figure with the costs on the school website. At first, I thought the cost was for a triple and the lowest meal plan but then I saw the room cost included the basic meal plan so the almost $12K looks as though it would pay for a single room with food included but that seems too good to be true and very unlikely, right? Do they deposit the full amount into his student account and he pays the bills or how does it generally work?</p>

<p>You know this is all so new to me and everyone here including you has helped me every step of the way so thanks in advance! We’re in the home stretch of the senior year…</p>

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<p>To determine the taxable amount, you add the totals for room & board, travel and extras which, according to your figures, comes to $15,787. You subtract the standard deduction for 2013 which is $6,100 and the remaining is taxable at the student’s rate. Assuming that the student is a dependent on your return. If the student is not, then she would also get her personal exemption. </p>

<p>I figure the taxable amount would be $9,687 which would result in a tax of $969. It would also most likely be taxable for the state. This also assumed the student has no other income. But the lowest tax rate applies to about the first $17,000 so she would still be in a low tax bracket.</p>

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<p>My D is on a full ride, and it includes everything, including travel and even spending money, in addition to the normal tuition, housing, books, computer, fees, and even a special stipend. I guess it depends on the school, but in her case, they deposit a set amount in her bank account each semester. It more than covers any expenses and is an extremely generous scholarship.</p>

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<p>Is the scholarship for $30,676? From you list, you simply stated the cost of attendance. Does the school give a particular name scholarship that states it covers, tuition/room/board/books and stipend?</p>

<p>What is the actual breakdown of the package
Gift aid-</p>

<p>Is the scholarship automatically renewable for all 4 years?
Is there a minimum GPA required to keep the scholarship?
Is there a phase in to the GPA?
Is there a grace period regarding the gpa? is it calculated at the end of each semester or is it cumulative at the end of each year/each subsequent term/year?
Is there an appeal process should something happen and your D does not meet the gpa requirement
Is the scholarship attached to a particular major?
What percentage of students lose their scholarship?</p>

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<p>Allowable expenses are not taxed. These are tuition, fees and books. Anything beyond that is taxable income to the STUDENT. </p>

<p>Colleges do not run travel agencies to book tickets home for students. Heck, most people do not use travel agents to book travel home for students. For travel, colleges set a fixed amount in their cost of attendance.</p>

<p>Keep in mind that even “full rides” require a student contribution and this can start off as a couple thousand dollars freshman year but very often increases. At some schools, very low income students can earn their student contribution through work study.</p>

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<p>mom2ck-- I’m thinking of the McDermott Program at UTDallas in this case, which does a set number of flights home/yr for students outside the DFW metroplex. It probably is rare, but it exists. </p>

<p>OP-- I don’t think (though it might be worth it to check with the school) that they will dictate how much each portion of the COA will be; in that case, the taxable portion may be higher or lower depending on how much books actually cost. $1500 is a high number for books/required supplies alone, and any of that money that’s not used on books becomes taxable.</p>

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<p>Fido…the scholarship amount that exceeds “Direct Costs” will possibly be returned to the student a couple of weeks after school starts (split between semesters). So, be prepared to pay for your travel and books before you get to school. And, then a couple of weeks after school starts you’d get a check.</p>

<p>That full ride is unusually generous…congrats. :)</p>

<p>BTW…check to see if the Tuition and Fees, Room and Board merit amounts increase each year as those rates increase. If they don’t increase, then that will cost you more money each year.</p>

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<p>Post #8 explains the tax aspect well except for when the marginal rate bracket increases. For 2013 for a single taxpayer the first $8925 of taxable income will be taxed at a marginal rate of 10%. Taxable income is after the $6100 standard deduction has been subtracted from AGI. So based on the numbers in post 8, the last $762 would be taxed at a marginal rate of 15%. So the tax would be about $1007. </p>

<p>Depending on whether the school bills expenses and credits scholarships in December or January for spring semester, for tax year 2013 the tax could be less than 1/2 that.</p>

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<p>Oh, such great responses! Thanks to all of you. It’s for UCSD. My son applied there as a safety and it wasn’t high on his list but since it’s now FREE, he will go back and look again. He just interviewed for Regents at Berkeley but we won’t know if he gets it until the 28th and UCLA will tell him if he gets Regents there next Friday. If he gets regents at either of those schools, we would still have to pay our EFC and then they meet our need for the remainder. If any of you have been following our saga, the one time lump sum payment my husband got from his employer for 3 years of back pay for overtime really messed up our EFC and it’s higher than we can really afford so this scholarship is really a blessing. We would really have to struggle to meet the EFC in the first year but then it would go back to “normal” for the next year. </p>

<p>purpleacorn, thanks again for your reply. I am getting a better understanding of how it all works. I see that they calculate a set figure for expenses to draw from and I guess you are right that if he doesn’t use all the book money, he can use it for something else. I wonder if that book/supplies amount can buy his sheets, computer or refrigerator-lol?! Is UTD the school you are considering? That’s really nice to have a set number of trips included and yes, very unusual from what I’ve read.</p>

<p>3bm103, Thank you so much for calculating what the tax would be. I had NO idea and it’s so much lower than I was imagining and that’s a relief so I really appreciate it. What does this part mean: “Assuming that the student is a dependent on your return. If the student is not, then she would also get her personal exemption.” So far, DS has always been listed on our return but wouldn’t he now have to do his own tax return? If we are not paying anything toward his school, I thought he would have to do his own but then we would lose him as an exemption. Hmm, not sure how the tax return part works?</p>

<p>sybbie719, Those are such good questions! Thank YOU!
You are right, that was the breakdown of the cost of attendance and then it had this:
Total Grants and Scholarships (“Gift” Aid; no repayment needed)
$30,676 / yr
Jacobs Engineering Scholarship
$28,676
Regents Scholarship
$2,000
Outside Aid
$0
It said total due from DS=0 and listed work study as 0 and loans as 0.
I know only some of the answers to your other questions:
Is the scholarship automatically renewable for all 4 years? YES
Is there a minimum GPA required to keep the scholarship? YES, 3.0
What do these two following questions mean? Don’t know the answers:
Is there a phase in to the GPA?
Is there a grace period regarding the gpa? is it calculated at the end of each semester or is it cumulative at the end of each year/each subsequent term/year?
Is there an appeal process should something happen and your D does not meet the gpa requirement? Don’t know this either.
Is the scholarship attached to a particular major? Yes, engineering
What percentage of students lose their scholarship? Don’t know this either!</p>

<p>I will be sure to find out all the answers and I’m thankful that you’ve told me what to ask! I do know that if for some reason he switches out of Engineering, then the Regents part would fill in up to our EFC and that was listed in the “other options” portion and said “as determined by Fafsa.” I’m pretty sure that if tuition or expenses increase the scholarship amount does, too, but that’s another thing I’ll be sure to confirm.</p>

<p>dumbo11, thank you for your post. It’s very exciting. Was the school your DD goes to her first choice or did the money sway her to go there? How do you do the tax return-does she do her own or do you still list her as a dependant? DS is not going to make up his mind until all the acceptances come in but he is thrilled that he was offered this scholarship and excited to go back and take a second look.</p>

<p>thumper1, thanks, too, for your reply. Yes, I was so surprised there was no student contribution because all of the UCs usually have a very high, set amount, close to $10K on top of the EFC but there’s no work study or loans or any contribution at all! I had bookmarked an old post that had a link about how exactly to compare finaid packages once they started coming in and kept looking for the “catch” but there doesn’t seem to be one except to find out all of the answers to sybbie’s questions.</p>

<p>As the parent, I’m very excited and so happy that all of you know SO much, especially what questions to ask. I have to be careful now not to pressure DS to go there just because of the money. I do think he will be able to maintain a 3.0 there and am not so sure that would be true if he chose Berkeley instead if he gets Regents there. I think that school is so much more competitive and I read somewhere that the average GPA for Cal Engineering was a 2. 4 or something-yikes! Others have told us we are crazy to consider UCSD over Cal for engineering and he should pick Cal no matter what the cost but hey, they aren’t paying the bill. We will just have to wait and see until all the options are in but it’s going to be tough to beat free!</p>

<p>Thanks again for all of your help!</p>

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<p>*It’s for UCSD. My son applied there as a safety and it wasn’t high on his list but since it’s now FREE, he will go back and look again. He just interviewed for Regents at Berkeley but we won’t know if he gets it until the 28th and UCLA will tell him if he gets Regents there next Friday. </p>

<p>If he gets regents at either of those schools, we would still have to pay our EFC and then they meet our need for the remainder. If any of you have been following our saga, the one time lump sum payment my husband got from his employer for 3 years of back pay for overtime really messed up our EFC and it’s higher than we can really afford so this scholarship is really a blessing. We would really have to struggle to meet the EFC in the first year but then it would go back to “normal” for the next year. *</p>

<p>Gosh, if paying your high EFC this year would “eat up” a chunk of your H’s back pay, then I would choose UCSD. It’s not like going to Cal or UCLA over UCSD is going to be a life-changing experience. All 3 are excellent schools. What is your son’s major?</p>

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<p>Yes, the taxable scholarships would be taxable to your son and he will have to file his own return. However, scholarships/grants are not considered support the student provided themselves, so if you provide medical coverage and other support, you can still claim him as your dependent on your taxes. Generally parents get the best advantage by doing this. You can claim his exemption but then he can’t. It’s best to figure both of your taxes each way and do what’s best for the family as a whole. Generally it will be best for you to still claim him as a dependent.</p>

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<p>OP, congrats! Great scholarship to a great school. In my D’s case, it was not her clear first choice, although she did love the campus. She is at U of Miami, and at first, I think it was a little hard to put prestige aside (plus her sister is at an Ivy). Ultimately though, after attending several accepted students weekends at some of her top choices, she decided that she could not pass up the opportunity. At Miami, the top scholarship is sponsored by the Stamps Scholars Foundation, and it has incredible opportunities. She was lucky, as she also had 2 other full ride options to choose from (well , one was full tuition but she had on any outside scholarships which would offset the rest). One year later, she is so happy with her decision and could not picture herself anywhere else. One side benefit your son should consider is these schools really want their top scholarship recipients to attend, and they provide many special extras to them. I can’t really answer your tax question, as my husband takes care of all that, sorry. I will tell you that I would think long and hard before passing up such a great offer. Unless your son just can’t picture himself there, I hope he gives it good consideration. And again, congrats! What an exciting time for you all.</p>

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<p>

Not necessarily true. I personally know students awarded academic full rides and there is no student contribution. It even included a computer and study abroad costs.</p>

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<p>Full rides can vary greatly. Lehman College offers a truly wonderful full ride award that even includes study abroad , a lap top, just about everything. There are also full rides that are so called but specifically cover tution, fees, room, board and books. There are also awards that meet full need that can cover up to everything under total COA, but some may still require the student contribuiton. </p>

<p>Even travel reimbursements can vary. My one son’s school did offer travel under certain situations, but the travel all got charged on a school account. It was a awkward doing it that way. My son and DH were given a free trip to the school to visit after acceptance, and they did not want us to book and pay for and get reimbursed. It had to go through them, and my son said that some kids who had travel expenses in their award had to go that route all four years in using it.</p>

<p>So anything called a “full ride” has to be examined in detail to determine exactly what it covers and how. </p>

<p>Congrats to all who got such offers.</p>