<p>I read and I read and I read. Everything pertaining to EFC, stipend, outside and departmental scholarships and stuff. I truly thank all the awesome people (like kelsmom and sk8rmom) that helped me regarding my efc and financial aid. This time I received yet another scholarship for the amount of $2000 payable to me. In the letter, it said that the funds are to be used solely for tuition and/or books. And that I am to returned any unused funds by a certain date next year. It also stated that I should consult my tax adviser regarding income tax consequences. </p>
<p>Firstly, do I have to report this to my school? The fa that the school offered me has gone down substantially to about 5255 and half of it is state need grant. And the rest is stafford loan. If I report this, does it affect my state need grant or my loan? </p>
<p>I was hoping that I can eliminate my loan and use the 2000 to pay for books and supplies. The coa for my school is approximately 21000. I was a need based student but the scholarships that I have received so far practically takes away that status, which I don't really care actually but I really really, reaaaallly do not want to get a stafford loan. Do I really have to report it? Cuz if I recall from my previous thread, someone said that I do not have to report it but then this site FinAid</a> | Scholarships | Outside Scholarship Policies stated that I have to. Now I am confused.</p>
<p>Sleepycat, what outside sources say doesn’t really matter. Your college’s policies are what you need to be concerned with. Most schools require reporting of all outside scholarships. Some do not ask for “awards” which typically come directly to the student and are a smaller amount. If this is your summer stipend for research, it may be in another category altogether.</p>
<p>Call your FA dept again and speak with an advisor, if you haven’t already, and ask them what another $2K award would have on your loans (my guess is the loans are offered to cover your EFC, not your need, so that’s why you haven’t seen a reduction). They are the only ones who can answer this. Since the check is payable to you alone, which is unusual for a scholarship of this size, you will retain the money and use it to offset your tuition/book charges.</p>
<p>You MUST report all scholarships to your school. You need to talk to them about how they will apply it, most will not reduce EFC but apply it to first to loans.</p>
<p>Thank you sk8rmom and gcnorth for your input.</p>
<p>sk8rmom, your guess is correct. The loan that was offered to me is to cover my EFC and not my need. I have to also correct the mistake I made. I sincerely apologize. The $2000 was made payable to me AND the school. I gave them the check today and the fa officer told me that I am over awarded even though in my judgment/sense I am under award since my parents are not contributing their part of the efc (can’t even get a plus loan).</p>
<p>After a lot of calculation I took out $2400 in stafford loan cuz I figured that that will cover the difference for room and board. I don’t really need the extra $2500++ that the school figure out for personal expenses and transportation. </p>
<p>My problem is this: </p>
<p>1) The newest scholarship check that I just received for $1000 is written out in my name only. </p>
<p>2) I was informed in the letter to consult with a tax advisor regarding income tax consequences. </p>
<p>3) Also I AM TO RETURN ANY UNUSED FUNDS back to the organization. </p>
<p>If I were to cash and use the funds for books and supplies, I would be responsible to pay income tax on this award so why must I report it to the school since they will not be paying tax on it? Plus since I have to return any unused funds, how does that help me by reporting it to the school? I have a feeling that I will have to return at least a couple hundred back to the foundation. So, I am totally confuse with this check. I feel that I should just return it since my income for this year is reaching $7000 and I am worried about my EFC for next school year.</p>
<p>You might want to look into the Education Deductions/Credits in IRS Pub 970. And/or send a PM to swimcatsmom - she is very familiar with the rules. I believe that tuition, fees, and required books, supplies/equipment all qualify for a deduction from scholarship income. There are some reference charts on this page (the bottom one is particularly useful in determining which source of funds has which qualified expenses):
[FinAid</a> | Saving for College | Education Tax Benefit Coordination](<a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid)</p>
<p>I think the foundation is telling you to return any overawarded funds - ie. if you already had scholarhsips/grants that equalled or exceeded your COA. Since that is not the case, I don’t think it applies to you at all and would not return funds since, even if it were to affect your EFC, it would not do so on a dollar for dollar basis. Your contribution to EFC, using FAFSA, is based on the amount over your income protection allowance ($3,750) after income and Social Security taxes paid. Right now only 50% of the excess income is added to your EFC.</p>
<p>For example, the calculation might look something like this:</p>
<p>Income $7,000
Less:
Taxes 500
Allowance 3,750</p>
<p>Avail Inc 2,750
Assessment .50</p>
<p>Contribution 1,375 (added to EFC for next year)</p>
<p>Thank you sk8rmom. I send a message to swimcatsmom as you suggested. Looking at the efc that will be added to my parents efc for next year doesn’t look too good. I am starting to realize that the government don’t really help people that want to help themselves. I have met people with 0 EFC who managed to spend their summer vacationing and sun tanning (yes I am envious) and even though they were offered work study plus sub/unsub loans, they seem to manage to bring it down and 1 now have 0 loans. Although I don’t mind about working and stuff, sometimes I feel like my youth is passing me by… Where did my summer go??</p>
<p>Well, I think it’s better to have the $7K and potentially lose $1375 in aid next year than to refuse the scholarships and gamble that the school will give more grant money next year to make up for it! Hopefully your parents can use any tax savings from the deductions/credits to help pay the EFC next year. Anyway, the above was just an example and you should not view it as an absolute. </p>
<p>The kid with the 0 EFC and no loans or work study must be going to a very inexpensive school, living at home, or have a very generous scholarship. This is not the usual scenario for low income college students as they generally end up with more than the average amount of debt. Anyway, I commend you for all your efforts - I’m sure you’ll be a standout student in college as well!</p>