<p>Hello,
Due to the recent government shutdown, I have finally received my Pell grant from financial aid. With so, I got refunded with around $1,000 and I was wondering what can I use the refund for?
I have already bought my text books so spending on books are unnecessary...
Though this may sound stupid of me, I wasn't interested on driving so I don't have my license yet and so I am planning to enroll to driving school with the refunded money. Will this get me into trouble for using the refunded on non educational purpose?
Also, am I allowed to use the money to buy myself some meals on the school campus?
Thank you for taking your time to read this question.</p>
<p>As far as I know, once they refund that to you, it’s your money. In theory you’ll use it towards school expenses, but how can they honestly keep track of all of it? Once you have it and if you cash it, how COULD they? </p>
<p>Personally, my refund is just sitting in my bank account. Will I use it towards school down the road? Maybe. Will I continue to get refunds, graduate with no debt and still have that money? Maybe. It’s all really dependent on what happens down the road.</p>
<p>It is taxable income, though, so be aware of that.</p>
<p>@harvestmoon
What do you mean by taxable income? ;o
Do I need to pay it back…? I thought loans were the aids that I need to pay back in the future, but grants were the things that I keep for myself for educational purpose…
so I’m not allowed to use it for my driving lessons huh…?</p>
<p>Scholarships and grants that exceed the cost of tuition, mandatory fees and required books and supplies are taxable income to the student. Chapter 1:</p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>Pell grants are included. If your income from work, interest from any savings and taxable scholarships/grants are less than $6100 for 2013 you won’t need to file a tax return or owe any tax. The $6100 is if you can be claimed as a dependent on your parents’ return. You would want to file a return if you had any withholding at a job.</p>
<p>No,you do not need to pay grants back. But grants and scholarships in excess of qualified educational expenses are taxable income to the student. Qualified educational expenses are basically tuition, required fees, and required books. Things like room and board and travel expenses are not qualified education expenses.</p>
<p>So yes you get to keep the refund, but it may be taxable income when you do your tax return. (if your total income including the taxable part of the grants is high enough to require you to pay taxes). (If you have loans, those are not taxable income of course)</p>
<p>@annoyingdad
I’m sorry to bother you, but I’m really new to this financial stuffs…
so,what exactly are taxable income and when do I file it? (I’m assuming that I need to file it for my next fafsa application?) as for “If your income from work… less than $6100 for 2013”, does this include my parents’ income too? I don’t have any job so… I’m understanding this as that I don’t need to file tax return and doesn’t owe any tax since i don’t have any job… am I correct?
Once again, thank you and sorry to ask so many questions.</p>
<p>How much were your total grants/scholarships - tuition, mandatory fees and required books and supplies? We don’t know if you are a community college student with only the Pell and that exceeded your tuition/fees/books or whether you go to a more expensive school and got lots of scholarships/grants in addition to Pell. Your parent’s income has nothing to do with this.</p>
<p>Nothing to do with your parents, this is your taxable income. However, if you have no other income and the rest of your grants/scholarships all went to qualified expenses, the $1000 refund is well below the threshold where you would be required to file a tax return.</p>
<p>Put that $1000 in the bank and save it for use for expenses related to college.</p>
<p>I have total charges of $3,247.86 and Federal Pell Grant has paid $1,732.00, Federal SEOG Grant paying $33.00, and State Need Grant paying $2,560.00 which totals up to $4,575. My account balance is -$1,327.14 which is the refund. I am student at Western Washington University and I only worked as a summer custodian (for three month) in a university earning around $3,000 this past summer and that was the only job I ever had in my life… and I don’t plan to work until I graduate because I want to focus on my studies.</p>
<p>Did you have a typo somewhere, maybe on the SEOG? I don’t get $4575 adding up the numbers you gave. If the total charges were all tuition/mandatory fees then you are at about $4300 taxable income for the year. And you can subtract the cost of required books and supplies that you bought on your own from that. You should keep receipts for those purchases. So you shouldn’t have to file a tax return this coming spring or owe taxes but would want to file if you had any tax withheld from your custodian pay to get back the withheld amount as a refund.</p>
<p>For 2014 though you may need to file and owe a little tax because there will be two semesters of taxable grants. Do you plan to get a summer job next summer?</p>
<p>ah, yes, there was a typo. I received $4,325 total for this quarter from financial aid, but there is something called “Enroll Confirmation Fee-Fall” which paid me(?)$250… the total charges included: enrollment fee, student building fee, health service fee, green energy fee, student recreation fee, student service & activity fee, alternative transportation fee, student technology fee,and resident undergraduate tuition fee.</p>
<p>Is “taxable income” something that I pay or something that i file tax return? you said that I’m about $4300 taxable income for the year, and I don’t understand what you mean by that since I don’t know what taxable income means…</p>
<p>and no, I’m not planning to get a summer job next summer. Instead, I’m hoping to do volunteer works.</p>
<p>On a tax return you would enter your gross income, income from work plus the amount of taxable scholarships/grants. Let’s say you had $3000 from work and $5100 of taxable grants. You would enter $8100 of gross income on your tax return. The standard deduction for a single person for 2013 is $6100. So on the tax return the $6100 is subtracted from the $8100 leaving $2000 of taxable income. You would pay 10% of the $2000 or $200 as tax to the IRS. This is for someone who can be claimed as a dependent on their parents’ tax return. Can your parents help you understand how taxes work?</p>
<p>But since your gross income is less than $6100 you don’t have taxable income and don’t need to file a return. But did you have taxes withheld from your custodian job? If so you would want to file a return, owe no tax, and get the withheld amount back as a refund.</p>
<p>I did use the term taxable income imprecisely in my previous post. I should have said income subject to taxation or just gross income.</p>
<p>I took a personal finance class in college. It was really useful and might help you out with some of these issues.</p>
<p>thank you so, very much annoyingdad, I have fully understood now.</p>
<p>Back to your original question. I think the best thing to do would be to save the refund for future semesters. Costs go up every year but your aid may not.</p>
<p>You are allowed to use the money as you please. Given your income info, you are fine for federal taxes. If you save this money, make sure you keep track of it when you deposit it. You do not have to list it as an asset if it’s sitting there when you fill out the next year’s financial aid forms. as long as you don’t have it in an account that dips below that amount between now and the time you put it in there, because once that happens, it counts as having used some of it. That can be important because 20% of your assets on the day you complete FAFSA go directly onto your EFC and reduce your award accordingly.</p>