Hello, so I was looking at my current financial aid status and I was awarded a total of $7,483. The BOGG B alone was enough to pay for fall//spring classes but not winter/summer and books. Since I was granted $6,095 for the 2018-2019 year (3k for fall and 3k for spring), I figured I would have at least $5,000 after books and fees not covered by the BOGG B. I was just wondering what do I do with this excessive amount of money? Do I save it in my banking account? Or do I just cash it out and keep it home? Would I need to report it later on my next FASFA? Sorry, this is quite new to me as my parents have no idea as well. Thanks!
Edit: Would the money be mine for personal use? Or would it only be used for school-related supplies?
It’s financial aid money…so I do not believe it counts as an asset…
I would suggest you place it in a separate bank account and use if for school expenses either now…or on the future.
I can’t imagine why you would keep that money at home.
So…does your aid cover the full school year (not including summer…really…in the summer you should get a job!). It also sounds like you need money for books…and those can be costly depending on your courses.
If half the money is awarded for the spring, you won’t get it until the spring. You’ll get half the Pell in the fall and half in the spring.
Keep in the bank! Not at home! It could easily go missing!
Don’t give/lend it to anyone (that often happens when family members know that a student has “extra money”. If anyone asks, simply say that the money is already dedicated to your education.
You will not count it as an asset on FAFSA since it’s from FA.
VERY LIKELY, you will NEED that money when you transfer to a 4 year university since typically students are GAPPED!!!
Hey, thanks for the reply. If you don’t mind, I have one more quick question. I heard I may need to file taxes for this pell grant return? I do not have an income of my own this year, so I was just wondering if I need to pay taxes for this $5,000 refund? Also, what would happen if I just left it in my bank account? Would the IRS ask any questions or would they never know I had it? Thanks!
Is your financial aid being used to pay for tuition, fees, and books? If so, it is not considered taxable income because those are qualified educational expenses.
If you are using the money for room/board/spending money, then it’s considered taxable income.
You might have to file an income tax form, but with the standard deduction increase, you likely won’t owe any taxes.
As noted by others…you aren’t going to get all $5000 Pell refund at once. If your school is on semesters, you will get 1/2 of that this fall…and the rest as a refund during the spring semester.
The IRS doesn’t ask for bank account balances on income tax filing form. All they ask for is interest earned…max on the amount of 1/2 of Pell for a few months, that isn’t going to amount to much.
@BelknapPoint ?
Thanks for the reply! Just wondering what happens if I don’t report the excess funds on an income tax file? Sorry, all of this is new to me as I never filed one before.
Most likely you won’t owe any taxes and if you don’t file and nothing is owed, that’s fine. However, it is sometimes easier to file even if you don’t owe anything or have a refund. When you complete the FAFSA next time, if you have filed taxes the prior year (so for the FAFSA that opens this Oct., 2017 taxes), you can use the DRT and then you may not have to send tax forms in.