No idea what to do with my Pell Grant, plus other questions

Paying for College
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<p>So, my Pell Grant award is $5,645.00. I go to a California community college, and qualify for the BOG waiver, which means I don't pay tuition. The 15 credits I'm taking cost me less than $10, and I'm dead serious about that. My books will, of course, cost a fair amount, but I'd be freakin' blown away if it came anywhere near the Pell grant amount.
So what do I do? I've looked into declining and/or giving back some of it. There seem to be some very large upsides to declining, but I can't find any for giving back a partial amount. I'm sure there are some, but could someone tell me what they are? </p>

<p>Here's what my situation is:
- I plan to transfer in two years, probably to Humboldt State, and the yearly cost there is around 22k.
- I fully intend on getting a masters, and it's very likely I'll go on to a doctorate.
- I work part time, and get about $350 a month, though it's usually more (but not usually over $425).
- I live at home, though I would love to not need to. I love my mother, but it's just time for me to go. However, I only have the time to work my current amount of hours what with school and everything, and there's no way I could live on what I make, even with a ton of roommates. </p>

<p>Here's what I may do with the grant:
- Get a car. I need a car desperately, but again, on my salary I couldn't afford a payment, insurance, gas, and maintenance all in the same month. I'd have to eat and clothe myself with the upholstery.
- Move out. I'd have to really research this.<br>
- Save it, I guess? </p>

<p>Here are my worries:
- My last FAFSA, both my mother and I were unemployed. Now she gets $9,800 a year, and I get probably around $5000. (Don't worry, we aren't in poverty. We live with my grandmother, who owns the home and has had the mortgage paid off for thirty years and pays utilities. We just pay for our own food and such.) I also have nearly $1,000 in savings, and it is my habit to put 30% of every paycheck into savings. I'm concerned about getting too many assets in my name and getting a higher EFC number. I need financial aid to go to school.
- I don't need this money now; I need it later, while at the four-year and in grad school. My CC is dirt cheap to begin with, and with the waiver I only pay for books. I need food on the table, yes, but I'm doing okay (not great though, if I'm honest) as is. </p>

<p>So what do I do? Give it back? Decline it? Save it? Use it on living expenses/transportation?
Any help would be appreciated. Thank you so much in advance.</p>

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<p>Save it. you may need it for jr and sr years.</p>

<p>Give it to your mom as “payment” for you living with her. Have her put it in the bank under HER name and save it for your later college years…then it won’t hurt you on FAFSA.</p>

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<p>Thanks for the reply!</p>

<p>If she saved it for me, wouldn’t she have to pay taxes on it?
I understand what you’re saying, and that is quite clever. I may do that.</p>

<p>And to be clear, I do pay my fair share. She doesn’t pay for me, for anything. Thankfully my needs are low enough that I can fully support myself. (I know you didn’t imply otherwise, I just wanted to get that established in case someone else misunderstood.) However, I do live under my grandmother’s roof for free. Paying rent to her would be the right thing to do. Without the grant, I couldn’t afford it. With it, maybe. I’ll have to add that to my list of considerations.</p>

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<p>

Contact your school. See [IFAP</a> - Dear Colleague Letters](<a href=“http://ifap.ed.gov/dpcletters/GEN1218.html]IFAP”>http://ifap.ed.gov/dpcletters/GEN1218.html)
If you decide to keep it, you may have to pay taxes.</p>

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<p>Save it! That’s what I’m doing right now. I have the Pell Grant and California State University Grant, combined both completely cover tuition with $2800 in excess - per semester. Plus I have two private scholarships one its $850 and the other is $500. The way I see it they’re paying me to earn a degree. Right now I’m trying to save everything I can and plan to eventually put that money towards graduate school. </p>

<p>Also I’m pretty sure they don’t check what you actually spend the money on. I’ve had friends who purchased brand new cars and used the money to make the payments. I also once had a professor tell me that when he was in college all his buddies save the money and went on a cruise to Hawaii during winter break :slight_smile: I guess if you feel bad about taking it just find someway to spend the money. For example I just spent 5 weeks abroad and earned 6 units towards my degree in the process. Travel cost me $2500 and tuition was another $2100. It was like a really awesome vacation, I earned 6 units of credit and got something to list on my CV.</p>

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<p>Thank you for the replies! Meow, it’s great to hear from someone in a similar situation. </p>

<p>I guess my real question is if it would be better to decline/give it back now and accept it later. You only get the grant so any times, right? Maybe I should only accept it later, when my tuition is higher?</p>

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<p>If she saved it for me, wouldn’t she have to pay taxes on it?
I understand what you’re saying, and that is quite clever. I may do that.</p>

<p>No…your mom doesn’t pay taxes on savings.</p>

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<p>If you decline it now, you aren’t going to get it back unless you think it’s going to take you 13 total semesters or more to get your bachelors. And there are other Satisfactory Academic Progress(SAP) criteria that will kick in before that if you are going to school full-time.</p>

<p>Also, since you aren’t paying anything for tuition, see this thread about the taxability of grants and scholarships:</p>

<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1532177-my-refund-taxable.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1532177-my-refund-taxable.html&lt;/a&gt;&lt;/p&gt;

<p>It will depend on the amount you are paying in fees and for books/supplies and if you have other income.</p>

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<p>Since Pell is an entitlement, is it ever taxable?</p>

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<p>

Yes See [Publication</a> 970 (2012), Tax Benefits for Education](<a href=“http://www.irs.gov/publications/p970/ch01.html#en_US_2012_publink1000178022]Publication”>http://www.irs.gov/publications/p970/ch01.html#en_US_2012_publink1000178022)

</p>

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<p>ok…but the student is taxed, not the parent. And only the amount that exceeds what? (about $6k of earnings and scholarships) would be taxed. He’d still come out way ahead, even if he had to pay a tiny bit of it for taxes.</p>

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<p>I am so glad I no longer live in California and pay taxes to that state.</p>

<p>That said, keep the free money, bank it, and thank the taxpayers who gifted it to you. Take that money and get your degree in four years, get a real job with a great income, and at an income that will lead you to have to pay taxes back into system, both the feds and the state of California. You will then be, in effect, paying back the system for financing your education. If you want even more points with a taxpayer like me, who pays tens of thousands in income taxes (again, thankfully not to California) and who will also be paying the remainder of what my kids’ merit scholarships won’t cover, then please don’t go around like some do, talking about buying new cars or traveling to Europe with their federal and state grant money. A little more discretion, and more gratitude, from some of those free money recipients would be appreciated.</p>

<p>Best of luck to you. Make yourself, your family, and the taxpayers proud and use this opportunity to turn yourself into a productive, taxpaying member of society.</p>

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<p>You don’t get Pell Grants for graduate school, if you were unclear on that.</p>

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<p>Wow, our tax dollars at work, paying for European “vacations”.</p>