ROTC Scholarship no longer considered Financial Aid???

Paying for College
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<p>I'm looking for some confirmation of what was told to me today by the FA officer at the school where goaliegirl has accepted an Army ROTC scholarship for next year. Here is the situation.</p>

<p>As mentioned goaliegirl has been selected for an Army ROTC scholarship for the next 4 years. It pays full tuition, a $1200 book allowance, and $2500 in non-taxable ($250 x 10 months) stipend (paid directly to the cadet). It is payable upon the passing of the Army Physical Fitness Test APFT (each term) and the completion and signing of a contract after arriving on campus.</p>

<p>We also filed FAFSA (always nice to have the Stafford around if things go awry) and the school awarded goaliegirl some subsidized and unsubsidized Stafford loans, some work-study, and a partial tuition waiver (specific dollar amount). Of course, there is a requirement that all outside scholarships be reported. So I called the FA office and asked to be connected to the person who handles ROTC situations. </p>

<p>I called to ask which components of the award (including the stipend or not) should be reported and since the scholarship is only awarded after the APFT is passed (and contract signed) whether it is reported now or when that is completed. </p>

<p>The answer I received is quite interesting and I would like one of our regulars who work in FA offices (NikkiL?) to confirm what I was told and hopefully (if true) what the ramifications of this are:</p>

<p>I was told that effective this year as a part of the recent changes to Federal FA rules, the entirety of the ROTC scholarship (tuition, books, stipend) are no longer considered financial aid, but "military compensation" and thus it is not required to report it as outside financial aid as they don't have to report it (I guess to the Department of Education?). </p>

<p>So I came away from today's conversation with what would appear to be a very generous (didn't expect to come away with anything except un-sub Staffords) FA offer. :)</p>

<p>To those in the FA business:</p>

<p>1) Please confirm that yes, in fact that ROTC awards have changed this year to be not-reportable as FA (I guess to make sure you don't exceed COA on total FA award).</p>

<p>2) If this ROTC package is not FA, how will it be reflected in next year's FAFSA filing? It is my understanding that the stipend portion of the award has always been reported as "non-taxable income". Does the rest of the package now fall under this or is it considered a "fringe benefit" part of the "military compensation" (like medical insurance) and not reportable on FAFSA or does this end up on a 1099 someplace as non-taxable income, or what?</p>

<p>We are clearly trying to play by the rules, but the rules appear to have changed this year (to our benefit). I would appreciate the factual confirmation of the answers to this question from a qualified source. </p>

<p>And any other ROTC award recipients who filed FAFSA, if you could call your school and ask if the rule change above is correct to confirm this, it would make me (and you too) feel better.</p>

<p>Thanks in advance!</p>

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<p>

Why is the stipend not taxable?</p>

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<p>

Can’t tell you exactly why, but the federal government decided that this stipend is not considered taxable income. Has been that way for as long as I can find out.</p>

<p>Wasn’t necessarily looking to turn this into a “why” type thread but an inquiry as to the proper way to account for an award.</p>

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<p>OK, I’ve done some more internet research and I think I’ve found some IFAP (Department of Education) documentation to back up the change to the requirement to report EFA “Estimated Financial Assistance” (a category of outside assistance that includes outside scholarships) to specifically exclude ROTC scholarships.</p>

<p>Look at the answer to Q4 in the following document:</p>

<p>[IFAP</a> - Electronic Announcements](<a href=“http://ifap.ed.gov/eannouncements/081309GuidFedVeteransEdBenefits.html]IFAP”>http://ifap.ed.gov/eannouncements/081309GuidFedVeteransEdBenefits.html)</p>

<p>If your school’s FA officer is unsure about the answer to the ROTC scholarship reporting requirement, please send them this link and see if they have a better understanding of this rule change.</p>

<p>I think this is very good news for all students who have ROTC scholarships.</p>

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<p>Goaliedad: The Army actually pays a $300 per month stipend to freshman.
[GoArmy.com</a> > Army ROTC > Scholarships](<a href=“http://www.goarmy.com/rotc/scholarships.jsp]GoArmy.com”>ROTC Scholarships | goarmy.com)</p>

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<p>Why is the stipend not taxable? >></p>

<p>It is actually an allowance, and like all military allowances, not taxable. Housing and food allowances are not taxable either.</p>

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<p>

</p>

<p>My bad. I stand corrected (in goaligirl’s favor).</p>

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<p>^^^
Lots of good financial news for Goaliegirl & her parents in the last few days.
AFAIK- only the Navy & MC are at $250 per month. The Air Force and Army both start at $300, but the Army offers $300 per year more in book allowance than the AF.</p>

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<p>

Does that mean</p>

<p>Go Green = Mo Green?</p>

<p>LOL</p>

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<p>Has anyone had any issues with their admissions departments concerning this policy…yet?</p>

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<p>When goaliegirl and I went up for orientation last month, I stopped by the FA office and they were aware of the policy. Granted I talked to the person who handles the ROTC scholarships (I was asking the policy on waiting for Uncle Sam to pay), but I think you shouldn’t get too much grief about the stipends.</p>

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<p>Thanks for the information, I wrote to my son’s financial aid department and this was their response:</p>

<p>VA benefits, which are not ROTC awards, are not considered aid for federal purposes. I will double check to see if this is true for ROTC awards as well.</p>

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<p>I believe this say ROTC scholarships are not a VA benefit:</p>

<p>[FinAid</a> | Military Aid | Veterans Status for Student Aid Purposes](<a href=“Your Guide for College Financial Aid - Finaid”>Veterans Status for Student Aid Purposes - Finaid)</p>

<p>HR 1777 applies to Senior ROTC program ( academic rank of professor)</p>

<p>Am I understanding it correctly?</p>

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<p>The way I read it:</p>

<p>ROTC scholarships are not a VA benefit, they are DOD Education Benefit.</p>

<p>So ROTC Benefits are To Be Excluded From Estimated Financial Assistance.</p>

<p>Yes, HR 1777 applies to SENIOR RESERVE OFFICERS’ TRAINING CORPS
This is commonly called ROTC, (Senior as opposed to Junior e.g. 8-12 grades)
[United</a> States Code: Title 10,CHAPTER 103—SENIOR RESERVE OFFICERS’ TRAINING CORPS | LII / Legal Information Institute](<a href=“http://www.law.cornell.edu/uscode/10/usc_sup_01_10_10_A_20_III_30_103.html]United”>http://www.law.cornell.edu/uscode/10/usc_sup_01_10_10_A_20_III_30_103.html)</p>

<p>So:“VA and DOD Education Benefits To Be Excluded From Estimated Financial Assistance As Included in Section 480(c) of the Higher Education Act”
(A) Chapter 103 of title 10, United States Code (Senior Reserve Officers’ Training Corps).
(L) The provisions of chapter 3 of title 37, United States Code, related to subsistence allowances for members of the Reserve Officers Training Corps.</p>

<p><a href=“http://ifap.ed.gov/eannouncements/attachments/081309GuidFedVeteransEdBenefits.pdf[/url]”>http://ifap.ed.gov/eannouncements/attachments/081309GuidFedVeteransEdBenefits.pdf&lt;/a&gt;&lt;/p&gt;

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<p>I found this post in a search under “ROTC”.</p>

<p>I know zero about financial aid, but obviously I need to learn about it quickly. </p>

<p>If ROTC awards full scholarship + a book allowance + monthly stipend, that really leaves mostly room and board (about $12,500) and travel expenses as out of pocket expense for the family, correct?</p>

<p>If a family applies for Financial Aid, and is awarded, say $15,000, in what form does this award come? Is it applyable to the Room and Board cost? Is it a lump sum to be used as the student sees fit? Is it some combination of direct aid, loan, and work study? What happens if it is purely a tuition reimbursement, but the tuition is already being paid for by the Army?</p>

<p>I guess I cannot get my head around the fact that a student with a full ROTC scholarship plus $15,000 financial aid might actually attend school free plus have a few thousand left over for spending money…</p>

<p>that can’t be correct, right?</p>

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<p>You’d be better off posting this in the Financial Aid Forum.
That said, I will try to answer your questions.

Depends on the type of financial aid. Loans can generally be used for tuition, room & board or say a computer for the student. How you use grants and scholarships may be restricted by the university. I believe most can be used for room and board but you will want to check with the FA office of the college you are considering. Keep in mind that “need” based grants and “merit” based grants are looked upon very differently by colleges.

You cannot “make a profit” off of financial aid. Other than loans (which is actually your money that you WILL repay) it is unlikely that you will be allowed to keep a few additional “left over” thousand dollars for spending money. I think the most you can expect is for ROTC to cover tuition + a book allowance + monthly stipend, and to receive grants or scholarships for the room and board costs. Failing that you may have loans for the room and board costs. Good luck.</p>

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<p>does this change also apply to the NROTC scholarships too as well?!?!</p>

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<p>^^^
Yes - all ROTC scholarships.</p>

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<p>aw guys, just spoke to the department of education on this policy, looks like it won’t work for ucla :frowning: or other uc’s that i atleast know of:</p>

<p>"Hi Terry: Your question concerning the treatment of the Reserve Officers Training Corps (ROTC) programs for purposes of financial aid has been given to me for a response. Under section 480(j)(1) of the Higher Education Act of 1965, as amended (HEA), an institution is required to exclude certain Federal veterans education benefits as estimated financial assistance (EFA) for purposes of the Title IV student assistance programs. The Federal veterans education benefits to be excluded as EFA are defined in section 480(c) of the HEA and includes, among other programs, the two ROTC programs that are administered by the Department of Defense. These are the scholarship benefits provided under the Senior ROTC in chapter 103 of title 10 of the United States Code and the subsistence allowance benefits provided under the ROTC in chapter 3 of title 37 of the United States Code. </p>

<p>Beginning with the 2009-2010 award year, an institution is required to exclude the benefits received under those two ROTC programs as EFA when awarding Title IV student assistance. Although you did not indicate whether your ROTC program is one of the two listed in section 480(c) of the HEA, you did indicate below that the financial aid that UCLA is awarding to you is a University Grant and not Title IV student assistance. Unfortunately, an institution in awarding its own financial aid funds is not required to exclude as EFA the Federal veterans education benefits listed in section 480(c) of the HEA."</p>

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<p>^to dingdongit’sterry’s message regarding UC’s and their treatment of ROTC scholarships as being or not being considered financial aid:</p>

<p>Does this mean that If I go to a UC and am thinking of joing the ROTC that the UC WILL COUNT it as financial aid? (meaning this would NOT be in my favor)</p>

<p>I am getting only 7500 in unsubsidized stafford loans, and 20k in parent plus loans. </p>

<p>So, would it be in my favor financially given the way UC treats ROTC scholarhsips (still a little bit confused on what dingdonterry posted about UC’s odd policy on ROTC and financial aid) to NOT do ROTC?</p>