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Excess Financial Aid money???

paragon24paragon24 Registered User Posts: 62 Junior Member
Hi, is it usual to have a lot of excess financial aid money? Basically, my pell grants will total about $5000+ for 2010-2011 and I'm needing only to spend about $2000 or so of that on books that I buy online very cheap, food, some clothes, rent to my parents, and that's about it. That's leaves approximately about over a half of the money left over. You'd think after all your necessary spending there wouldn't be a whole lot left over. I'm worried that I'm getting too much money but to this is what my school felt was justified so I don't know.

Also, is excess pell grant money taxable and can I spend it on basically whatever I what (I know it would be wise to save it)?

Thx very much to however responds.
Post edited by paragon24 on

Replies to: Excess Financial Aid money???

  • thumper1thumper1 Registered User Posts: 63,896 Senior Member
    Did you receive a full cost scholarship to college in addition to your Pell? Just wondering how you have this surplus. If so, congratulations.
  • paragon24paragon24 Registered User Posts: 62 Junior Member
    No scholarship, just pell grant. I'm attending a CC right now, if that matters. Getting my transferable done first.
  • plumazulplumazul Registered User Posts: 1,743 Senior Member
    ^ OP, ? what about tuition, fees??
  • swimcatsmomswimcatsmom Registered User Posts: 15,699 Senior Member
    What about tuition and fees? You do not mention those.

    But, yes, it is not uncommon to have excess aid, especially at a CC. Your financial aid is based on the COA at the school. The COA generally includes estimated average expenses for tuition and fees, books, room an board, travel, and miscellaneous expenses, Any excess you have once direct costs to the school are covered are for those other indirect expenses. For instance my daughter lives in an off campus apartment and uses her FA to pay for rent, bills, food etc.

    And yes. Any grant money in excess of tuition and fees and required books is taxable income to you. Whether you will actually owe any taxes will depend on your other income and whether your total income is enough to incur taxes.

    Do keep in mind that once you transfer to a 4 year school it is likely your FA will not cover your full COA (the current max Pell is $5550 and is the same whether your school costs $5000 or $25,000).
  • paragon24paragon24 Registered User Posts: 62 Junior Member
    $26/unit... but I have a fee waiver that takes care of that. Health fee is $17. I live with my parents and give them about $100 per month. Am I missing anything?
  • paragon24paragon24 Registered User Posts: 62 Junior Member
    Thanks for the reply swimcatsmom. That explains a bit. I'll have to go to my school's financial aid office and ask them about whether the excess is taxable or not in my particular case.
  • kelsmomkelsmom Super Moderator Posts: 14,557 Super Moderator
    Pell is an entitlement, so you will receive it even if you have a fee waiver. It is prorated on the basis of enrollment, so taking less than 12 credits will result in a reduced Pell payment in that term. If you have extra money that is refunded to you, it is yours. That is a nice problem to have.

    As far as taxes go ... at the end of the year, you will receive a 1098-T from the college. It will list your tuition and fees. It will also list your grants and scholarships. If total grants & scholarships exceed tuition & fees, the excess is taxable. Of course, if your income is low enough you won't actually owe taxes on that amount.
  • paragon24paragon24 Registered User Posts: 62 Junior Member
    Do you know how that might apply to my school... because what they're doing is they give you the option of either using their specific debit card they send you, or having the financial aid transferred to your bank account of choice (I chose the latter) in four separate increments. Half during fall, the other sometime in spring. Hope that made sense.
  • swimcatsmomswimcatsmom Registered User Posts: 15,699 Senior Member
    The school will send you a 1098T, as kelsmom said. It will list the grants paid to you during the year (calender, not school) and also direct tuition and fees charges. You will have to determine how much is nontaxable and how much is taxable. Broadly speaking, grant money used to pay tuition and fees and required books is not taxable. Grant money used for any other expenses is taxable.

    It is not the responsibility of the school to determine your taxes. You will need to determine that yourself. You can have a certain amount of income before you are required to file a tax return. (The standard deduction for a single dependent in 2009 was $5700 so generally you would not have to file taxes if your income was lower than that, but there are exceptions and the # will change for 2010, so be sure to run your numbers through some tax software).
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