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Effective: July 1, 2010 |
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20.25.55ar4 - Student Financial Aid (Archive) |
Archived: June 1, 2011 |
Student financial aid includes loans, grants, scholarships, fellowships, internships, some training expenses, and work study funds. Student financial aid may be earned or unearned income. It may be counted or excluded.
Title IV of the Higher Education Act of 1965.
Non-Title IV of HEA and Non-BIA Loans.
Non-Title IV of HEA and Non-BIA Grants and Other Non-Loan Financial Aid.
Training Expenses Paid by the Trade Adjustment Reform Act of 2002.
Gifts of Cash for Tuition or Education.
Coverdell Educational Savings Accounts.
Verify and deduct these allowable student expenses from any counted unearned student financial aid income:
l Tuition.
l Mandatory fees.
l Course and lab fees.
l Books.
l Supplies and equipment required for course work.
l Child care costs incurred while at school and in transit.
l Transportation to and from school.
Note: Use the same transportation expense rate as allowed for self-employment transportation.
Also consider impairment-related expenses necessary to attend school or perform schoolwork to be allowable student expenses for MA Method B, GAMC, Medicare Savings Programs and MA-EPD.
Exception: MA-EPD clients may choose not to deduct these allowable student expenses if they will bring their earned income below $65.
Title IV of the Higher Education Act of 1965
Title IV of the Higher Education Act of 1965 (HEA) is a federal law that authorizes programs that provide student financial aid. These programs include, but are not limited to:
l Pell grants (formerly Basic Educational Opportunity Grant (BEOG)).
l Academic Competitiveness Grants (also known as AC Grants and ACG).
l National Science and Mathematics Access to Retain Talent (SMART) Grants.
l Federal Family Education Loan (FFEL) Program. (Also known as FFEL Program and FFEL loans.) FFEL includes four components:
n Stafford Loans (formerly Guaranteed Student Loan),
n Unsubsidized Stafford Loans,
n Federal PLUS Loans, and
n Federal Consolidation Loans.
l Federal Perkins Loan Program (formerly National Defense Student Loan and National Direct Student Loan).
l Federal Supplemental Educational Opportunity Grant (FSEOG) Program.
l Supplemental Education Opportunity Grants (SEOG) Program.
l Federal Work-Study (FWS) Program (also known as FWS awards, FWS employment. Formerly College Work-Study Program).
l Teacher Education Assistance for College and Higher Education (TEACH) Grants (also known as TEACH Grant Program, TEACH Grants).
l William D. Ford Federal Direct Loan Program (also known as Direct Loan program and Direct Loans). Direct Loans includes four components:
n Direct Subsidized Loans,
n Direct Unsubsidized Loans,
n Direct PLUS Loans and
n Direct Consolidation Loans.
l Leveraging Educational Assistance Partnership (LEAP) Program (also known as LEAP Program). Formerly State Student Incentive Grants (SSIG).
l Special Leveraging Educational Assistance Partnership (SLEAP) Program.
l Robert C. Byrd Honors Scholarship Program (also known as Byrd Honors Scholarships).
l Student Support Services (also known as SSS and TRIO). Student Support Services is one of several TRIO programs.
l Academic Achievement Incentive Scholarships.
l Federal Supplemental Loans for Students (SLS) (formerly Auxiliary Loans to Assist Students (ALAS)).
l Upward Bound (also known as TRIO). Upward Bound is one of several TRIO programs.
l Gear Up (Gaining Early Awareness and Readiness for Undergraduate Programs).
l High School Equivalency Program (HEP).
l College Assistance Migrant Program (CAMP).
l Robert E. McNair Post-Baccalaureate Achievement (also known as McNair and TRIO).
l State Student Incentive Grant Program.
l Presidential Access Scholarships.
Treat all student financial aid provided under Title IV of the HEA as follows for all programs:
l Undergraduate Students: Exclude from income.
l Graduate Students: Exclude from income.
Exception: MA-EPD counts Federal Work Study as earned income if the following conditions are met:
n Average gross monthly earnings for the six-month certification period or for an individual month, whichever is more beneficial to the client, are over $65 (at least $65.01).
n Social Security and Medicare taxes are withheld. State and federal income taxes need only be paid or withheld if the person earns enough to be required to pay those taxes.
Bureau of Indian Affairs (BIA) provides student financial aid to eligible individuals. Treat all student financial aid provided by the BIA as follows for all programs:
l Undergraduate Students: Exclude from income.
l Graduate Students: Exclude from income.
Exception: MA-EPD counts Federal Work Study as earned income if the following conditions are met:
n Average gross monthly earnings for the six-month certification period or for an individual month, whichever is more beneficial to the client, are over $65 (at least $65.01).
n Social Security and Medicare taxes are withheld. State and federal income taxes need only be paid or withheld if the person earns enough to be required to pay those taxes.
Non-Title IV of HEA and Non-BIA Loans
Treat non-Title IV of HEA and non-BIA student financial aid in the form of loans as follows:
l MinnesotaCare and MA Method A:
n Undergraduate students: Exclude from income.
n Graduate students: Count after deducting allowable student expenses.
l MA-Method B, GAMC, Medicare Savings Programs and MA-EPD:
n Undergraduate students: Exclude from income.
n Graduate students: Exclude from income.
Non-Title IV of HEA and Non-BIA Grants and Other Non-Loan Financial Aid
Treat non-Title IV of HEA and non-BIA grants, scholarships, fellowships and other non-loan financial aid as follows:
l MinnesotaCare and MA Method A:
n If the financial aid does not require teaching, research, or other work in order to receive the aid, then
m Undergraduate students: Exclude from income.
m Graduate students: Count as unearned income, after deducting allowable student expenses.
n If the financial aid requires teaching, research, or other work in order to receive the aid, then
m Undergraduate students: Exclude from income.
m Graduate students: Count as earned income. Do not deduct allowable student expenses.
Note: Sometimes a child’s earned income may be excluded. Earned income deductions may apply.
Examples of financial aid that could require work include:
n Teaching assistantships.
n Paid internships.
n Stipends.
n Work-study.
l MA-Method B, GAMC, Medicare Savings Programs and MA-EPD:
n If the financial aid was used or set aside to pay educational expenses, then
m Undergraduate students: Exclude from income.
m Graduate students: Exclude from income.
n If the financial aid was neither used nor set aside for paying educational expenses then
m Undergraduate students: Count after deducting allowable student expenses.
m Graduate students: Count after deducting allowable student expenses.
Note: Any portion of grants, scholarships, or fellowships that is excluded because it is set aside to pay for tuition, fees or other necessary educational expenses and is then used for some other purpose is income in the month it is spent, or in the month the person no longer intends to use the funds to pay tuition, fees, or other necessary educational expenses, whichever is earliest. Excluded funds that are not spent by the end of the ninth month after receipt are countable resources as of the tenth month.
n If the financial aid results in earned income, then
m Undergraduate students: Count as earned income. Earned income deductions may apply. See Types of Disregards and Deductions.
m Graduate students: Count as earned income. Earned income deductions may apply. See Types of Disregards and Deductions.
Exception: MA-EPD counts the earned income if the following conditions are met:
r Average gross monthly earnings for the six-month certification period or for an individual month, whichever is more beneficial to the client, are over $65 (at least $65.01).
r Social Security and Medicare taxes are withheld. State and federal income taxes need only be paid or withheld if the person earns enough to be required to pay those taxes.
For all programs, treat the portion of Veterans' Affairs (VA) benefits designated as educational assistance (tuition, books, fees, tutorial services, or any other necessary educational expenses) as follows:
Note: Payments made as part of a VA program of vocational rehabilitation are excluded. See Excluded Income, Vocational Rehabilitation payments. The portion of the VA educational payment designated as a stipend for shelter is not excluded.
l Undergraduate Students: Exclude from income.
l Graduate Students: Exclude from income.
Training Expenses Paid by the Trade Adjustment Reform Act of 2002
The Trade Adjustment Reform Act of 2002 provides, among other things, training to workers who lost their jobs due to competition from imports from another country or a shift in production to another country. Training can include academic, vocational, technical or employer based (on-the-job) training. For all programs, treat training expenses paid under this act as follows:
l Undergraduate Students: Exclude from income.
l Graduate Students: Exclude from income.
Treat financial aid used to fulfill an approved Plan to Achieve Self Support (PASS) for disabled or blind people as follows:
l MinnesotaCare and MA Method A:
n Undergraduate students: Determine the type of financial aid used to fulfill the PASS. Follow MinnesotaCare and MA Method A policy for that type of financial aid.
n Graduate students: Determine the type of financial aid used to fulfill the PASS. Follow MinnesotaCare and MA Method A policy for that type of financial aid.
l MA-Method B, GAMC, Medicare Savings Programs and MA-EPD:
n Undergraduate students: Exclude from income.
n Graduate students: Exclude from income.
Budgeting Financial Aid Income
Budget counted financial aid income as follows:
l MinnesotaCare and MA Method A: To arrive at a monthly amount to budget follow these steps:
1. Determine the net counted unearned financial aid by subtracting allowable student expenses for a given period of time (semester, quarter, or year) from a graduate student’s counted unearned financial aid over the same period of time.
2. Divide the result from Step 1 by the remaining number of months in the time period.
3. Budget the monthly amount.
m If the client receives the aid before the school year begins, do not budget the income until the period it is intended to cover.
m If the client received the financial aid prior to the application, do not budget it for that period.
l MA-Method B, GAMC, Medicare Savings Programs and MA-EPD: Count financial aid as income in the month received. Consider student financial aid available to the client when the client or client's representative actually receives it.
See Gift Income for information on gifts of cash for tuition or education.
A Coverdell Education Savings Account (ESA), referred to as a Section 530 Plan and formerly known as an Educational Individual Retirement Account, is an account(s) established to pay the educational expenses (i.e., elementary, secondary, and postsecondary school) of an individual who is the designated beneficiary and is under age 18 or a special needs beneficiary.
Note: Assume an individual who is age 18 or older and eligible for Supplemental Security Income (SSI) due to blindness or disability is a ”special needs beneficiary.”
Any distributions from the Coverdell ESA to the designated beneficiary are excluded as income in the month received as long as the funds are used for educational expenses.
If the beneficiary uses any distribution of funds from the Coverdell ESA for expenses other than educational expenses, that portion of the funds becomes unearned income at the earlier of two points:
l in the month the funds are spent; or
l in the month the individual no longer intends to use the fund for educational expenses.
Any dividends or interest earned on Coverdell ESA funds are excluded income.