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Where does excess (credit) from scholarships/FA go?


distancia
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A rare thing, indeed--our DD's FA and scholarships exceed the cost of college attendance this semester. She's showing a credit balance of over $1,000 on her account. Is this refunded to the student at the end of the semester (would be nice, as we advanced money for one of dd's off-campus bud educationally-related activities, and she needs to reimburse us), or does the money just go back to the college 'coffers" if unused? Because if so, we'll make darn sure the money gets spent at the college bookstore on a new laptop, as dd's present unit is on the blink.

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Back in the day, I got a check for excess scholarship funds. I was told that I could only use it for school related expenses, including travel home on the weekends, etc. Knowing what I do now, they probably should have reported it on some kind of tax form, but since it was my only income then, it would not have created a taxable situation for me.

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Typically awards cannot be given in excess of cost of attendance. The confusing thing though is that the cost of attendance is calculated by the college and it may for some students be in excess of what they typically spend. So, for example, the budgeted amount for books may be $500 but the student is a saavy online shopper and they spend much less than the budgeted amount. In this case, then yes, the remaining portion may go directly to the student. My student who has a full scholarship receives money each semester by direct deposit from the university.

 

As far as taxes, it is not just the amount that exceeds cost of attendance that is taxable but any funds that are not for tuition, fees, or required materials. So, many students who have scholarships that cover room and board will find that some of that scholarship is taxable and they will need to file a tax return. This IRS publication explains. http://www.irs.gov/pub/irs-pdf/p970.pdf

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Talk to the financial aid office or the bursar's office.

 

Excess financial aid CAN go the student under certain circumstances. But that depends not only on the college but also on the individual awards. I had two students at the same school, and due to differing merit aid awards, one could receive moneys above total cost and one could not.

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It depends on the scholarship. My son actually ended up making money on attending college this past year because he won so many scholarships. Some specified for tuition only, others included living expenses. He will have to declare the excess as income and may be taxed on it. Some scholarship checks went directly to the school and others were sent to him to use as needed for college expenses.

 

I have no idea how financial aid works but you should probably find out if the excess is from scholarships or financial aid. That will probably make a difference in how it is handled.

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OP here:

 

We put money into a "pre-paid" 529 Plan when dd was just a toddler, and now she is in school the money for tuition is coming from her pre-paid plan. What remains are 3 merit scholarships: one from the state, two from the school. Fees are taken from those 3 scholarships, as are books, but there is still a lot left over.

 

I did call the FA office and the rep there told me merit scholarships cannot be taken away. So, the excess is just sitting in dd's account at the college business office. I guess dd just goes into the business office and requests a disbursement? Ironic: all the bills comes to us, but the credits are in dd's name.

 

BTW, there is a school here in our state that was offering full tuition and housing as well as a brand new laptop to Natl Merit Scholars, regardless of need. Add to that any other merit scholarships and a paid for 529 plan and the student could be doing quite well! When they say it "pays" to do well in high school, they mean it.

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