<p>This year I'm receiving about 25k in institutional merit aid, state merit aid (Florida Bright Futures), private scholarships, and Pell Grants. The direct costs to my school of room, board, and tuition are about 14k, meaning I will be getting the difference paid back to me in the form of a check at the beginning of the year.</p>
<p>I was wondering how the 25k in scholarships and the ~10k I will be getting paid back are reported on my taxes and on my FAFSA? Will I have to pay taxes on my scholarships?</p>
<p>For the 2010-11 year, I'm receiving the maximum Pell Grant of $5550; my EFC was 0. Will my scholarships and/or the money I'm getting paid back affect my EFC next year? Is there any way for me to avoid reducing my Pell Grant when I receive money back as a check?</p>
<p>Thank you for your help! I feel like these are very basic questions, but as a first-generation college student, I don't know what to do, so any little bit helps!</p>
<p>You’ll have to pay taxes on the scholarship money that exceeds qualified expenses at your school. Tuition and fees are qualifed expenses, but room & board are not. States vary, but some (most?) will also tax that money.</p>
<p>As for the excess, you will list that on your FAFSA as income, but then the FAFSA has another line where it will allow to subtract that portion of your income that was in scholarships.</p>
<p>In short, it will affect your taxes, but should probably not affect your Pell grant.</p>
<p>You’ll have to pay taxes on the scholarship money that exceeds qualified expenses at your school. Tuition and fees are qualifed expenses, but room & board are not. States vary, but some (most?) will also tax that money.</p>
<p>Since state tuition in Florida is rather low, it looks like you’ll have to declare about $18k as income…so when you get that check in January, you better hold onto it because you may need it to pay taxes or to compensate for the following school year if your other scholarships end and your Pell Grant goes away (which might happen since your income will highish for a student.)</p>
<p>Hopefully, Swimcat, Kelsmom, or others who know more about this can “weigh in”. </p>
<p>'rentif2…why do you think the Pell grant won’t go away? Maybe you didn’t realize how little of that $25k is going towards tuition/fees.</p>
<p>As I said, scholarship money that is counted as income for tax purposes is subtracted on the FAFSA. On this year’s FAFSA it was line 44d: “students grant and scholarship aid reported in AGI”</p>
<p>It is deducted from the student’s gross income for FAFSA calculations, and consequently should not affect the Pell grant.</p>
<p>It may affect other aid provided by the college, but not the Pell grant.</p>
<p>Im pretty sure Bright Futures doesn’t extend into your sophomore year so don’t get used to it.</p>
<p>^^^</p>
<p>Where did you get that idea? Bright Futures is for the undergraduate years.</p>
<p>(Why not look it up before claiming to be “pretty sure” about something like that?)</p>
<p>I had this dilemma in undergrad. I had to pay taxes on the portion of my scholarship that covered my room and board and the excess that I got in the form of a refund. It kind of sucked because my refund was never that large ($2-3K at the most) and I had to pay taxes on “money” that I never actually saw because it was paid to the school in the for my lodging and food, but it was a small price to pay for what was basically a gift worth $120,000.</p>
<p>As I said, scholarship money that is counted as income for tax purposes is subtracted on the FAFSA. On this year’s FAFSA it was line 44d: “students grant and scholarship aid reported in AGI”</p>
<p>does that include scholarships that exceed COA? I’m not saying it doesn’t; I’m just asking cuz that seems odd.</p>
<p>As far as I know there are no special instructions for scholarships that exceed the COA. The FAFSA asks questions, you answer them. It asks for your AGI, it asks for the amount in scholarships you received that are included in that AGI, and then it subtracts that amount from the AGI. If there’s something trickier to it than that, I don’t know what it is and I have never read a reference to it. They ask the questions, I answer them.</p>