EDUCATIONAL INCOME (MAM)

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Educational income is any financial aid made available to a postsecondary student.

The treatment of educational income varies depending on the type of financial aid, whether the individual is an undergraduate or postgraduate student, and the program of assistance.

Descriptions and treatment of educational income are separated into the following sections:

. U.S. Secretary of Education

. Educational Loans

. Programs not administered by U.S. Secretary of Education

U.S. Secretary of Education

Scholarships, grants, and work-study made available to undergraduates from a program funded or administered by the U.S. Secretary of Education. Examples include:

. College Work-Study

. Grants under the Carl D. Perkins Vocational and Applied Technology Education Act

. Pell Grant - formerly Basic Educational Opportunity Grant (BEOG)

. Robert C. Byrd Scholarship

. Special Programs for Students from Disadvantaged Backgrounds

. Special Programs for Students Whose Families are Migrant or Seasonal Farm Workers

. State Student Incentive Grants

. Supplemental Educational Opportunity Grant (SEOG)

. Teacher Training Grants

Treatment: Excluded Income

Exclude educational income funded or administered by the U.S. Secretary of Education for undergraduates only.

For postgraduates with educational income of this nature, treat the educational income the same as non-U.S. Secretary of Education income.

Educational Loans

Examples of educational loans made available to undergraduates or postgraduates, regardless of the funding source include:

Income Contingent Loan Program

. Parent Loans for Students (PLUS)

. Perkins Loan (formerly National Direct Student Loans)

. Stafford Loans (formerly Guaranteed Student Loans)

. Supplemental Loans for Students (SLS)

. Trio Loans

Treatment: Excluded Income

Exclude educational loans for both undergraduates and postgraduates.

Programs not administered by the U.S. Secretary of Education

Educational income made available to undergraduates or postgraduates from a program that is not funded or administered by the U.S. Secretary of Education include:

. scholarships and grants provided by state, local, and private sources, or

. scholarships and grants provided by the Veterans Administration (VA).

Treatment: Unearned Income for the non-MAGI categories of medical assistance. Excluded if used for educational purposes and not living expenses for the MAGI categories of assistance.

Treat educational income not funded by the U.S. Secretary of Education the same for both undergraduates and postgraduates. This treatment also applies to postgraduates who have educational income funded or administered by the U.S. Secretary of Education.

1. Prorate educational income over the period of time it is expected to cover to determine a gross monthly educational income amount.

2, Using the same method, determine the average monthly educational expenses.

3. Subtract expenses from income; the difference is unearned income. If the amount is zero or a negative figure there is no countable unearned income.

Educational Expenses:

An educational expense is allowed if the expense is directly related and necessary for school attendance, and the individual is responsible for the payment of the expense.

Examples of allowable expenses include:

. books - actual costs

. tuition - actual tuition charged

. fees - actual costs

. equipment - actual costs

. special clothing - actual costs

. child care - actual costs

. student loan interest for the MAGI categories only - actual interest paid

. transportation to and from school

- If individuals use their own vehicle, or if they ride in another individual's privately owned vehicle, the allowable expense is $.21 per mile.

- If public transportation (taxi, bus) is used, the allowable expense is the actual amount charged the individual.

Examples of non-allowable expenses include:

. repayment of a student loan,

. expenses covered in the adult financial assistance grant (e.g., shelter),

. an expense that is fully reimbursed by another source,

. portion of an expense that is partially reimbursed by another source.

References: 42 CFR 435.603