Obsolete 1121 - 403-7 Educational Assistance

Effective Date: October 1, 2015 - October 31, 2021

Previous Policy

A. MAGI Based Programs

1. Do not count educational assistance that is used for tuition, fees, books and supplies. Count funds used for living expenses and non-education expenses. See 450-1.

2. Do not count educational loans, regardless of their source, are not considered income and should not be counted under the MAGI programs.

3. Count work-study income that would be reported as wages on a tax return.

B. Family Medically Needy Programs

1. Veteran's Educational Assistance

a. If a client receives VA educational assistance see 403-2 to decide what portion is counted as income.

b. Any amounts intended for family members is NOT exempt

2. Title IV of the Higher Education Act of 1965 or Bureau of Indian Affairs (BIA)

a. Do not count any type of educational assistance or college work-study.

b. Do not count student financial assistance received under Title IV of the Higher Education Act of 1965, or under BIA student assistance programs regardless of use.

c. Do not count interest earned on retained funds from these sources.

d. Examples of Title IV programs include, and are not limited to:

i. Pell Grants (Formerly BEOG)

ii. Federal Supplemental Educational Opportunity Grants (FSEOG)

iii. State Student Incentives (SSIG)

iv. Academic Achievement Incentive Scholarships

v. Byrd Scholars

vi. Upward Bound

vii. Gear Up (Gaining Early Awareness and Readiness for Undergraduate Programs)

viii. Federal Educational Loans (Federal PLUS Loans, Perkins Loans, Stafford Loans, Ford Loans, etc.)

ix. LEAP (Leveraging Educational Assistance Partnerships)

x. LEAP (Special Leveraging Educational Assistance Partnerships)

xi. Work-Study programs

xii. Academic Competitiveness Grant

xiii. National SMART Grant

Note: State educational assistance programs, including work-study, funded by LEAP or SLEAP are programs under Title IV of the Higher Education Act.

3. Loans Other than Title IV Federal Educational Loans

a. Do not count cash received from non-Title IV Federal Educational loans because a bona fide loan that must be repaid is not income. (Sec. 402)

b. However, amounts retained beyond the month of receipt are countable resources. (Sec. Family 521-10)

4. Grants, Scholarships and Fellowships Received

o ANY type of grant, scholarship or fellowship is exempt. The funding source does not matter. For example, Title IV, non-Title IV, BIA or non-BIA grants, scholarships and fellowships are all exempt.

5. Gifts Received

o Cash gifts received for educational purposes from any person is the same as a cash contribution. (see 403-1)

6. Work-Study, general information

a. There are two types of work-study: Federal Work-Study (FWS) and non-Federal Work-Study (non-FWS).

b. Both types of work-study are taxable.

c. Both types of work-study are exempt income.

C. ABD and Long-term Care Programs

1. Veteran's Educational Assistance

o If a client receives VA educational assistance see 403-2 to decide what portion is counted as income.

o Any amounts intended for family members is NOT exempt.

2. Title IV of the Higher Education Act of 1965 or Bureau of Indian Affairs (BIA)

a. Do not count student financial assistance received under Title IV of the Higher Education Act of 1965, or under BIA student assistance programs regardless of use.

b. Do not count interest earned on retained funds from these sources. These funds are also excluded from resources regardless of how long the funds are held. (See 521-10)

c. Examples of Title IV programs include, and are not limited to:

i. Pell Grants (Formerly BEOG)

ii. Federal Supplemental Educational Opportunity Grants (FSEOG)

iii. State Student Incentives (SSIG)

iv. Academic Achievement Incentive Scholarships

v. Byrd Scholars

vi. Upward Bound

vii. Gear Up (Gaining Early Awareness and Readiness for Undergraduate Programs)

viii. Federal Educational Loans (Federal PLUS Loans, Perkins Loans, Stafford Loans, Ford Loans, etc.)

ix. LEAP (Leveraging Educational Assistance Partnerships)

x. SLEAP (Special Leveraging Educational Assistance Partnerships)

xi. Work-Study programs

xii. Academic Competitiveness Grant

xiii. National SMART Grant

Note: State educational assistance programs, including work-study, funded by LEAP or SLEAP are programs under Title IV of the Higher Education Act.

3. Loans Other than Title IV Federal Educational Loans

a. Do not count cash received from non-Title IV Federal Educational loans because a bona fide loan that must be repaid is not income. (Sec. 402)

b. However, amounts retained beyond the month of receipt are countable resources. (Sec. 521-10)

4. Grants, Scholarships, Fellowships and Gifts Received

a. If Title IV or BIA is not involved, do not count as income any portion of grants, scholarships, fellowships or gifts received that are used to pay tuition, fees, books, or other necessary educational expenses.

b. Retained Amounts. When amounts are retained for future educational costs, estimate the expected expenses. Do not count as income that amount the individual retains for future educational costs. (See Sec. 521-10 for special resource exclusion.)

c. Any portion that is neither used for current educational expenses nor retained for future educational expenses counts as income in the month received. This includes any portion of such funds actually used, or set aside to use for food, clothing or shelter. Funds retained for any purpose other than educational expenses also counts as a resource beginning the month after receipt. (See Sec. 521-10) Interest earned on these countable retained funds is excluded from income (See 403-8)

d. Allowable Educational Expenses. Allowable educational expenses include tuition, laboratory fees, student activity fees, books, stationary supplies, travel to and from classes, special clothing or protective equipment that the student is expected to supply, impairment-related expenses necessary to attend school or perform schoolwork, and child-care necessary for school attendance. Reimburse travel to and from school at 21¢ per mile unless the grant allows a larger figure. The student does not have to pay all expenses in the month the funds are received. Verify the expense and assume that the student will pay it. Income remaining after deducting the allowable expenses and after deducting amounts retained for future educational expenses counts as income in the month received. (Also, see #c. above.)

i. Verify the expenses with copies of receipts, cancelled checks, contact with the school or other documents showing the expected expenses.

ii. A signed statement from the student may be enough to verify small expenses such as daily bus-fare, mileage, small expendable items. (Do not accept a signed statement for major expenses such as tuition, fees and books.)

iii. Decide if the expense is a necessary part of getting an education. For example, some child-care costs may not be for school attendance particularly if the person also works.

e. If any retained funds are excluded because the individual intends to use them for future educational expenses, those funds are countable income at the earliest of the following dates.

i. The date they are used for something other than necessary education expenses, or

ii. The date the individual no longer intends to use them for educational expenses.

If this results in an overpayment or understated liability, see section 825.

f. Interest. Except for Title IV and BIA funds, interest earned on excluded retained educational funds is not excluded income under this policy (See 403-8)

5. Exclude from assets, gifts for educational expenses that the client retains and intends to use for educational expenses until the end of the month that is nine months after the month the client first received the gift. (521-10)