<p>Hello. Everyone is so helpful in this forum, so i decided to ask a question thats been bothering me for a while.
I have been given a great FA award at my college. ($8500 in federal loans, some work study, small scholarship, and rest covered by grants.) I will be living off campus in a rented guest room of a friend. The school has calculated my housing to be $12,000 a year, which is much higher than the amount that I will be paying (I only need to pay them about $250 a month). My FA is enough that I will also be receiving a $3000 refund. The FA office said that it is fine that I am paying less than calculated and that I can use the money for personal stuff. However, I still feel like I am lying and that I might get caught. I am not signing any lease agreement since the house belongs to a friend. My friend even offered to allow me to stay for free (as long as there is no one else staying there), so I might not even need to pay for housing. I still need to pay for food and gas, though. Additionally, I might be going home often since I do not live too far from campus. </p>
<p>Do you consider this lying on the FAFSA/CSS and to the school? Is it ethical?
What if the school asks me to prove that I am not living with my parents?
Also, would it be okay to use some of the refund money to pay back the $2000 unsubsidized loans I was awarded?</p>
<p>The college has a computed cost of attendance for students living off campus. You are very fortunate that your housing costs less than what they are using for the computation. </p>
<p>As long as your aid doesn’t exceed their cost of attendance, it is fine for you to receive it. Remember that your personal expenses are included in the cost of attendance and could easily eat up $3000…think BOOKS, school supplies, and any travel expenses you might have (will you be walking everywhere or do you have a car?)…and it includes food too…hopefully you are paying your friend something for the food you eat too!</p>
<p>Also, please dont forget that living arrangements dont always work out. Many people here have stories of kids not getting along with roommates, landlords selling building, etc. You name it. At my D’s school, one year, some rentals (cheaper, wooden ones) burnt down. Fortunately no one hurt, but the kids had to move into dorms. </p>
<p>But it is possible at many schools to economize. One of my Ds friends livied in cheap off campus housing and got a job waitressing where she got free food. As the friend said, other than on her work days it was noodles, noodles and more noodles.</p>
<p>I would suggest putting the grant money into the bank today - as thumper1 and kayf have pointed out, things may not work out with the friend, and you living on your own costs more than you think it will. </p>
<p>After graduation, any money left in the bank could go towards paying down your loans. With the economy going nowhere, getting a job right out of college, or one that can pay off the loans, is not guaranteed.</p>
<p>You can also just take out less in loans than what you’ve been offered. Take the subsidized ones, don’t take any more in unsubsidized than you have to.</p>
<p>You should save at least $1,000 for your taxes. You will have to pay federal taxes (and state taxes depending on your state) on any grant money that does not go for tuition. And if you are going to school out of state, you will probably have to file two state returns and may owe taxes on both of them.</p>
<p>But to answer your question: Is this ethical? I don’t see anything unethical about it. You have been upfront with the college, they are going to give you the money for your personal expenses, it’s up to you what you do with it.</p>
<p>@thumper, I will be buying and cooking my own food.</p>
<p>@meremom, If I put the money in the bank, wont it reduce my aid for next year? Cant I just use it to pay the loans now and not worry about them when I graduate? </p>
<p>@rentof2, Will it reduce my aid for next year if the school see’s that I do not need the $2000 unsubsidized loans or pay if I it back right away?</p>
<p>@photoop, $1000 of $3000 will be taken off for taxes?!?!?! Im going to school in my home state.</p>
<p>Only scholarship/grant money in excess of tuition/fees/required books is taxable income. How much tax you will actually owe will depend on your total income (including the taxable part of scholarships/grants). You have a standard deduction that is tax free (around $5700 ish - don’t remember exactly off hand) income before you start incurrring taxes.</p>
<p>jayjay - the point is to save some for your taxes. If only $3000 of it is above and beyond your tuition expense, your tax liability will be low as Swimcatmom said. If more than that, it will be higher. And depending on your state you may also have state income taxes.</p>
<p>OP, Only <em>grants and scholarships</em> over tuition can be taxable. Loans are not taxable. </p>
<p>You’re not getting a gift of a refund. This is a loan. It is your own money since you will have to pay it back. So if you are able to lower expenses, it would probably behoove you not to take out as much in loans. And yes, it’s always ethical to save your own $.</p>