Is my scholarship taxable (and other financial aid tax questions)?

moneyman

As we come to the end of January, I thought we could finish the month with some short Qs and As about financial aid tax-related questions. If you have some I didn’t cover, feel free to post them in the comments section. Keep in mind as I begin that I am not an accountant so please understand this is general advice (and not tax advice). You always want to check with an accountant if you have specific questions about your own situation.

Answers to your questions
  1. Is my scholarship taxable?
    1. I am so glad you asked that question! Generally scholarships are not taxable as long as you are using the proceeds to pay for recognized educational expenses (like tuition, fees, books and supplies). Any amounts above those expenses that are provided by your scholarship (like amounts for room and board, travel, and other expenses) may be taxable income in the year you receive them. If you have questions or want to know more, take a look at the IRS guidance on scholarships.
  2. Do I have to pay taxes on my Work Study earnings?
    1. Work study earnings are just like any other earnings from work. If you earn more than the minimum amount required to file a tax return (including your work study earnings), then you must file a Federal Tax Return. A benefit of work study earnings, however, is that they will be subtracted from the income you earn when you file the FAFSA and you use as your base income the year in which you earned this income; this way you are not doubly penalized for this income.
  3. Can I claim a tax credit for the tuition I’ve paid this year?
    1. Maybe. There are two tax credits which you might qualify for if you paid any expenses for education: the American Opportunity Credit and the Lifetime Learning Credit. The rules and specifics for these credits vary based on your income (and there are income levels where these benefits phase out), but for many families, these credits can either reduce the amount you owe the IRS by lowering your AGI or might increase the amount of your refund. In order to receive one of these credits, you will need to collect the Form 1098-T issued by your college or university (which you will use to complete the required Form 8863). The American Opportunity Credit can give you as much as a $2500 credit per student, while the Lifetime Learning Credit can give a $2000 credit per household. Lots more information at the IRS page for these programs.
  4. Can I claim the interest I paid on my student loans as a deduction against my income?
    1. Again, depends. There are income cut-offs but generally students can claim up to $2500 (or the actual amount of interest paid, whichever is lower) as a deduction against their taxable income. This deduction means you can possibly reduce the amount of taxes you owe if you already paid student (or parent) loan interest in 2019. Again, much more information on the IRS page.
  5. Is there one place I can get all of the information on tax issues pertaining to higher education?
    1. I am so glad you asked. The IRS has a publication for you! Called IRS Publication 970 (Tax Benefits for Education), this 93 page document has all of the information you would ever want about the topic (and more than I have room to cover here).

So there are some key Questions and Answers. And this closes out our tax review for January 2020! Next month our topic is maximizing your scholarship opportunities and exploring the benefits of the Florida prepaid program! Talk more then!

What should I do with my refund?

moneyman

Tax filing season is upon on shortly. The IRS is almost prepared to receive your Federal Income Tax return for 2019, and by the end of February you can expect to receive a refund check from the IRS if you indeed are owed one. Before you make plans to spend it on the latest must-have item (be that video game, cell phone, or clothes), let’s talk…

Your best option for your tax refund….

First of all, let me be clear. In this post I am going to talk about both what do you do if you owe money to the IRS, and what to do with your refund if you are lucky enough to get one. You might want to think about it this way: the best solution would be to owe nothing and to have no refund owed you.

If you carefully plan your withholding from your pay check, you would not be overpaying the Federal government every time you get paid (and therefore be owed a refund), and you would not be underpaying the Federal government (therefore owing money to the IRS). The amount you withhold from your paycheck is based on your W-4, and now is the time to check for 2020 (before too many paychecks go by) to see if your withholding is right for this year. You can do this at the IRS withholding estimator.

If you do owe money after filing your Federal Tax Return for 2019, it is time to review your W-4 form and perhaps choose to withhold a little more money. This way you are not hit with a bill at the end of the cycle for money which you should have withheld anyway.

If you are receiving a large refund, you might also want to review your withholding. You should look to see if you can adjust your W-4 so that you actually receive your money earlier in the year. If you get a refund, it is kind of like giving the government a loan for free since you should have had this money earlier; the Feds have been able to hold on to your money all year, and they paid you no interest on that money.

Regardless of the size of your refund I would suggest one particular choice for you for your refund check — don’t spend it frivolously! This is the time to take a look at your emergency spending and perhaps make a plan to start a savings account.

Most financial advisors will suggest that you should have an emergency fund which would allow you to cover 3 to 6 months of expenses if for some reason you lost all of your income. Now I know that it is unlikely that you will have enough to cover all of this as a current college student, and frankly most adults don’t have this kind of savings available, setting ANYTHING aside for emergency savings is a great idea.

Why do you need emergency savings? Remember that the best financial plan can be derailed by a simple urgent matter — a flat tire, an illness, a car breakdown, an unexpected reduction in hours, a parent who needs help. You may be asked to spend money you simply don’t have and the worst solution is to borrow money (like with a credit card or a payday lender) in an urgent situation. By having some savings, whatever you can afford, you guarantee that you can get through that urgent situation.

What a perfect way to start your emergency savings — with your IRS tax refund. Don’t spend it on luxuries. It’s not a lucky break, or a gift, or money you shouldn’t have already had in your budget. Make sure to save it! That’s the best plan!

Questions? Suggestions? Type away! Comments welcome.

“…Nothing can said to be certain except FAFSA and taxes…”

moneyman

So maybe this isn’t the actual quote, but I think it applies. Benjamin Franklin may not have known about the FAFSA, but if he did, I bet he would have written it my way.

You just can’t escape it… Death and Taxes.

Well while you may not be able to avoid taxes, you can certainly find a free way to file them. Filing a tax return for most of us can be a (relatively) simple, cost-free, and pain free process and as I explained in my last post, it is an important part of your application for financial aid.

If you are required to file a tax return, and your file is selected in a process called “verification”, you will be required to either link your FAFSA to your tax information or provide a copy of your tax return to the Financial Aid Office. Unfortunately, the excuse of “I didn’t know I had to file” won’t work!

So if you do have to file, what are your options? Like many tasks these days, you can do this in a paper format or online (and the online form is easier).

First, the paper version. For those of you who want to see the actual form in paper (with the appropriate instructions), you can visit the IRS (Internal Revenue Service) form page. Keep in mind that before 2018, there were several versions of the tax form (1040, 1040 A, 1040 EZ). Starting with 2018, there is only one tax form (1040) but lots of schedules which you may need to complete depending on your personal circumstances.

You could print out the paper forms, read the 108 page instruction booklet, and do all the math yourself, but I know a much faster and easier way to do it. There are several online services which will allow you to safely and securely complete your 1040, and for most of you the cost will be $0.

You can find a list of these companies and services on the IRS webpage. Most of these products will provide you a free service with optional add-on packages for more complicated situations (like those with self-employment or with complicated capital gains). Also some of these companies will prepare your state tax return for free as well (remember that Florida doesn’t require an individual tax return). There are income limits for the free services but most students will qualify.

What is especially helpful about these services is that they will ask you a series of questions designed to make sure that you have thought of all of your possible exemptions and deductions. This way they make sure that you have maximized your possible refund (or reduced what you may owe).

Of course there is also a third option: use an accountant. If you have a complicated situation or think you might need someone with professional experience to help you complete your forms, you can hire a CPA to assist you. In Orlando, there is even a free service (sponsored by the United Way) called VITA (Volunteer Income Tax Assistance) where volunteer professionals can assist in preparation of your return. Check with the United Way in your area to see if they have a similar service.

Now, when do you have to have the return filed? The deadline for filing your taxes is April 15th for the calendar year just past. You can get an automatic six-month extension for filing your tax return, but you will need to pay what you owe by April 15th in any event. Of course, if you are expecting a refund you will want to file as soon as possible so that you can have your money in hand as soon as possible.

Keep in mind companies have until January 31 to send out W-2 forms to you which report your income to you for filing purposes, and some companies send other forms into mid-February. You want to make sure you have all of your forms before you file your return; otherwise you may need to file an amendment which can take more time.

So in summary, look for your forms from your employers, school, and other sources, find your free online partner, and get ready to file. Let me know if you have any questions.

And remember, Benjamin Franklin had it right. No one can escape taxes (and the FAFSA)!

First Draft: W-2s and 1040s

moneyman

Hello all, and welcome again to 2020. I am sure many of you are heading into the Spring semester with new classes, new beginnings, and new opportunities for learning.

One of the new questions that has been circling around given the current world environment has to do with filling out the FAFSA and the military draft. Since there has been a lot of confusion about this, I thought I would add a few words of clarification here.

Filling out the FAFSA does NOT put you in the front of the line.

First, a reminder that we do not have an active draft. Remember we have an all volunteer armed forces (and we owe a great deal of gratitude, honor, and appreciation to those who volunteer for service). It would take an act of Congress to re-institute the Draft, and there is currently no move to do so.

Secondly, while registering for Selective Service is a requirement for men who are 18 years of age and older, and checking your status is a requirement for receiving Federal financial aid, there is no “priority” for those who complete the FAFSA. In fact, the information confirming your registration comes from a database match between the two systems (FAFSA and Selective Service) and no permanent record is maintained of this check on the Selective Service side.

So what is Selective Service? It is a system that guarantees that IF a draft is ever declared that all men ages 18 to 24 would be eligible for service. But again, this hasn’t been used since the Vietnam War and no one has suggested that the Draft would be restarted.

So now that we have put that issue to bed, let’s return to taxes. The first question you should be asking is do I have to file a Federal Income Tax Return? Generally if you are single, under the age of 65, and not self-employed (only paid by your employer through a standard paycheck), then as long as you earned less than 12,000 in 2019, you do not HAVE to file. a Federal Tax Return. If you are claimed by someone else as a dependent, you are married or self-employed (or both), or you have other special circumstances you should check with the IRS to see if you are required to file. The IRS has an interactive tool that can help you determine if you are required to file a return.

Just keep in mind, even if you don’t have to file a return, you may still WANT to file a return. Check your paystub or W-2; if your employer has taken out Federal Income Tax, the only way you can get this money back is by filing a tax return. And the amount withheld may make it worthwhile.

Especially because there are many free resources to help you file your taxes. More on this next time.

What paperwork should you have ready when it is time to file your return? First, make sure you have the W-2 forms from each of your employers for 2019. These forms show how much you earned for the year and how much Federal Income Tax was withheld. Note that companies might not send these to you until the end of January. You also want to make sure you have any 1099 Form for miscellaneous income (or self-employment income). Also make sure you have any other tax forms you might have been sent (like interest forms from your bank, or loan repayment forms for your education loans, and your 1098-T from your college for tuition paid).

We’ll get more into the filing process next time on the blog! Stay well!

I hereby resolve… and other resolutions

moneyman

Happy 2020 to my dear readers. May the coming year bring you happiness, health, and great college experiences!!! Here we are at the start of another year, and once again it is time to turn to that most majestic of annual traditions. It is a tradition where we state a goal at the beginning of the year and then (hopefully) work towards the goal throughout the year; some of us pay close attention to this and others simply ignore it except at this time of the year. Yes, I am talking about — taxes. (Did you think I was going to discuss New Year’s Resolutions? Yes, that conversation will come soon too!

2020 and the 1040 – a match made in heaven

For many of you, January is the month where you will file your tax returns (or at least get ready to file them) so that you may receive your tax refund as quickly as possible. If you will owe money, remember that you have until April 15 to file your Federal Tax Return (much more on this to come).

In the coming month we are going to address how to file a tax return (including free resources to get it done), why you might want to file, and common traps to avoid.

To begin, let me know if you have any particular questions about income tax forms which have been puzzling you. Remember that your financial aid is based (in large part) on the information on your (and, for dependent students, your parents’) tax returns, so you want to make sure you file them in a timely manner so you don’t delay your financial aid application. With the current financial aid system, the income tax return for 2019 (which you will file in the next few months) will be used in your financial aid application (FAFSA and others) for 2021-22 (which you will be able to start completing as of October 1, 2020).

Confusing, I know. But moneyman is here to help! We will tackle each piece one step at a time.

For now though let’s talk about resolutions. What New Year’s Resolution have you set for yourself? What commitments will you make to your financial health (as well as your emotional, physical, psychological, and spiritual health)? Add yours as comments to this post and let’s be a community of support for each other.

With eyes wide open (20/20 – get it?), here’s to a year of great success and clear goals. Happy New Year!

The grades have come, and all is write with the world.

moneyman

What are your favorite holiday tastes? Do you live for peppermint around the time of year? Is gingerbread your thing? Maybe hazelnuts or macadamia? Or is it really maple syrup that sings to you during this time of year? Whatever flavor it is, I hope you find a taste of it this holiday season.

But maple isn’t the only sap you need to worry about this season. Financial Aid also has something called SAP, and it isn’t quite as tasty.

Tree sap makes maple syrup, but what does Satisfactory Academic Progress make? More financial aid!

At this point in the year, you are likely about to receive your grades for the Fall semester. Before you put them aside and focus on next semester, you should look carefully at a few items related to your financial aid.

Federal regulations require that you make Satisfactory Academic Progress (or SAP) through your academic career in order to continue to receive financial aid. SAP is made up of three parts:

  1. Your GPA. Federal Regulations require that you maintain a cumulative GPA of at least a 2.0 (a C average). While each class doesn’t have to be above a C, it is important that your overall GPA be at least a 2.0.
  2. Your completion percentage. Another important measure is the percentage of courses you pass (with a D or better) compared to the total courses you attempt. This percentage must be 66.67% or higher. This calculation includes courses from which you withdraw as well as those in which you receive a final grade.
  3. How long it takes to complete your degree. There is a limit placed on how long you can receive Federal financial aid. This limit (150% of the length of your program) is usually measured in credit or clock hours since some students attend full-time and others attend part-time. As an example, if you are pursuing a Bachelor’s Degree which takes 120 credits, you must complete that degree before you reach 180 attempted credits (again including those credits from which you withdraw or fail).

So let’s say you had a difficult semester and you didn’t meet all of these requirements. What happens? I’m glad you asked.

  1. Warning. During the first semester after your GPA or completion percentage falls below the minimum, you will likely be placed on Financial Aid Warning. During this term, you can still receive your financial aid, but it is important that you work to bring your GPA and completion percentage up above the minimum thresholds before the end of your Warning semester. Otherwise you might wind up on:
  2. Suspension. Financial Aid Suspension occurs when you have two semesters in a row where your cumulative GPA and/or completion percentage fall below the minimum threshold. You may also be placed on suspension when you reach the 150% of your degree program. Under Financial Aid Suspension, your Federal financial aid is not available. Don’t worry though, because you have a chance to appeal and be placed on:
  3. Probation. Financial Aid Probation is a status given to students who have successfully appealed their SAP Suspension and are being given an opportunity to rehabilitate their GPA or completion percentage. During this time, students may continue to receive their financial aid as long as they continue to make progress under the terms of their approved appeal (usually you are not allowed to withdraw from a class, earn a grade lower than a C, or change your major).

The details for all of this can vary based on your institution, so make sure to look at your college or university’s SAP policy to make sure you understand how it works at your school. In addition, you may want to note that Financial Aid SAP works very differently than Academic Probation / Suspension, so be sure to make sure you understand how your academic decisions may impact both of these.

Now hopefully your grades were terrific this semester and you don’t need to worry about any of this. If you did struggle, though, don’t worry too much. Many students do, and by seeking out the help of an academic advisor, a learning support specialist, or their faculty member, they can be very successful. If you do have to write a letter of appeal for your SAP status, then be sure to offer full disclosure of what caused issues for you this semester and what changes you will make to ensure success next semester.

If you have questions about SAP (or want to tell me about your favorite holiday flavor), go ahead and post your question or comment below.

The only constant is change; and that changes constantly…

moneyman

Heraclitus had it right. Change happens all of the time; our whole life is filled with change. Just the basic act of getting up in the morning causes a whole variety of changes in your life; every decision I make, every choice I choose, each brings about a variety of different options and closes a number of different pathways to me. Each decision (and even the decision not to decide) causes variety in my day.

Hey brother, can you spare some change?

If you like variety, you may want to work as a Financial Aid officer. We know change in our profession because it is an essential part of the work we do. When you work with partners as diverse as the Federal Government, State Government, College Foundations, Private Donors, and other sources for funds, there is a chance that every day will bring about a change in rules or regulations that govern how we award and disburse funds to students. This last week has been no exception.

I spent the last week in Reno, NV, at the Federal Student Aid Training Conference. This annual gathering of more than 5000 financial aid officers and partners from every state in the country (and several international attendees as well) is a massive gathering of those of us who work in the industry. This year’s conference (over 4 1/2 days) had more than 5 General Sessions (imagine 5000 people in one massive ballroom, and you get the idea), 32 concurrent sessions (several offered more than once to give attendees the chance to see them), 3 hands-on sessions, and 10 “Birds of a Feather” sessions for those from similar backgrounds to share news. All of the sessions are audio recorded so that several weeks after the conference is over, attendees and non-attendees can go back and hear what was said.

If you get the idea that this conference is a big deal, it is. Just follow the Twitter hashtag #fsatc2019 and you can read a number of updates from those attending with their comments about the content of the sessions.

While there were lots of interesting items shared, there were TWO BIG CHANGES which will impact each one of you, so I thought I would share those here. Sorry it took me a few days to get this update to you, but needless to say between the full conference days, the 3 hour time difference, and the high altitude (at over 4500 feet above sea level), my body needed its rest.

  1. Starting next year (2020-21), every student loan borrower will have to go through a new process. Before receiving any loan disbursement for the year, the student (or parent for PLUS loans) will need to log into the Federal government’s web site, take a look at their current balance for loans (including potential monthly repayment amount, current loan balance, and remaining eligibility) and confirm that they understand this amount and obligation before taking out additional loans.
  2. While we are on the subject of web pages, the government’s student financial and and student loan web pages are going through a major overhaul. This nextgen process will bring about a streamlined experience for consumers (students, schools, and loan servicers).

The video below explains both of these changes (and was shared at the conference). Also included is the newly announced chatbot (or virtual assistant) named “Aidan” (see 3:30 in the video).

https://www.youtube.com/watch?v=I1O6lpMUDqY
The Digital Future of Federal Student Aid

Some other changes announced were much more technical, but these were the most important for you (and will have the most impact on you). What are your thoughts about logging in to confirm your loan balance before you receive your next loan for the year? While I agree it is good practice, I have lots of questions about how this will work for students. Stay tuned to the blog and I will share more news as it comes.

As you can guess, there are always more changes coming down the line!

Happy thanksgiving! Now, don’t be a turkey!

moneyman

Hey friends, here’s hoping that (if you celebrate it), you are looking forward to a wonderful Thanksgiving holiday with lots of time for friends, family and (most of all) turkey…

Me, selfie, tomorrow at the table…

We’ve reached a season of gratitude and as we pause for reflection, I want to take a moment to note how grateful I am to all of you who are reading and responding to the blog. When I started the blog I hoped that I would reach an audience who could benefit from some financial aid tips and advice, and I am so pleased that the blog has been a source of information and inspiration for many of you.

Next month, we will be spending some time focused on making it through the holidays without spending all of your money, and looking at what happens when the unexpected occurs (how to manage emergency expenses). As we prepare for the holiday season, I would love to know if you have tips for managing the Christmas / Hanukkah / Kwanzaa / Winter Solstice present extravaganza. What do you do to live within your means?

More to share in the coming weeks, but here’s a great early read entitled “16 Ways to Celebrate a Budget Christmas”.

And in the meantime, a quick poem for the the Thanksgiving holiday with an important message about Black Friday buried in it:

Twas the night of Thanksgiving,
and all through the house,
not a creature was stirring
not even a mouse.

We all had had more than
our share of good food,
eating turkey and stuffing, and
not to be rude

but our waists had expanded
past one more belt notch,
was it fate that demanded
that last glass of scotch?

Well, now that the eating
is finally done
and all of the “younglings”
are resting their “tums”,

it’s time to start planning
the shopping excursion,
we’ll take in the morning,
some say it’s perversion

the sheer gabs of money
we spend on our gifts
when all the world over
the need is for thrift

but we spend our dough
as though it will never
diminish and so
we think we are clever

when deficits rise
(both our own and the national).
Can you sense the surprise?
We don’t think that it’s rational

when our stomachs and purses
fill up, pop our buttons,
the rest of the nations
know we are just gluttons.

InDirectIon

moneyman5 Comments

Last night I had a rehearsal with my improv group. We are working up to a public performance and as part of the process we are working on learning new games. One of the new games we learned last night was “He Said, She Said”.

It’s a game of direction. One actor says a line, and then their scene partner adds “…he said while [they make up an action or an emotion].” The person who originally spoke the line must then do whatever was said. Now it is the second actor’s turn to say a line, and after the line is delivered the first actor gets to add “…she said while [they make up something else]” and the second actor must do whatever is said. Sound confusing? Check out this video and you can learn a little more about the game.

and I mean the improv game only…

What’s fun about this game is that you get to take turns being an actor, and a director. At some points you are creating the dialogue (and moving the scene forward) and at other points you get to be the one deciding the blocking or emotional state of the other actor. It’s fun, but confusing. Switching back and forth between Direction and inDirection (see what I did there?) can tire your brain.

Of course if you’ve seen the blog before you should know that this kind of introduction leads to a somewhat connected topic about financial aid. Today is no different. In the world of college expenses, we often talk about Direct vs. Indirect costs, and today I want to spend some time explaining what this means.

Direct costs refer to those charges which will show up on your bill (or your student account statement). These charges will include tuition and fees and may (depending upon your situation) include room, board, books or other expenses that you are being charged by the institution directly. If you live on campus, you will see direct charges on your billing statement for housing and (likely) dining. You may not see charges from the bookstore on your bill if you paid for them yourself or got them from some other source.

Indirect charges are those costs that are part of your COA (or Cost of Attendance) but are not ones that are charged to you from the college or university itself. For example, you will have costs related to your transportation to campus (even if you live on campus, you’ll need to get there at the start of the year, and come home for breaks or at the end of the year). Your transportation cost (gas, wear and tear, airplane tickets, bus fare) isn’t a direct cost you pay the school, but it is a cost you will have to pay during the year, so it counts as part of your COA. If you live off campus, room and board costs (probably for you more like rent and groceries) are also an indirect cost. You aren’t paying the college for these expenses, but you do have to pay them somehow.

Many students get confused about how financial aid can be used to help you pay your indirect costs. If you receive enough financial aid so that your direct costs are covered by your financial aid, any extra financial aid you receive will be sent to you in the form of a refund which can then be used by you to cover any of your indirect costs. The issue here is timing.

Usually refunds aren’t available until a month or longer into a semester. This means you will need to be prepared to pay for your indirect expenses out of pocket until your refund is available. If you aren’t clear on the timing, check with the financial aid office at your school. We know you need the refund as quickly as possible, but there are processes on our side that do sometimes cause delays; working with your financial aid officer proactively can help eliminate those delays.

Also keep in mind that when you receive your refund, you need to carefully manage what can be a large amount of money. Don’t treat it like a lottery win and spend it all immediately. Keep in mind, this is your money for (usually) the semester. Make a budget (more on this later) and stick with your budget. This way you won’t run out of funds before the semester ends.

So, what kind of improv games have you played? What kinds of direction do you appreciate?

I could use some direction from you!!! Have these entries been helpful? What questions are on your mind. Leave a comment below!

“…Gently Down the Stream”

moneyman

So I was going to write an entry last night, but then Disney+ launched.

For anyone not paying attention, Disney+ is the new streaming service introduced by Disney to provide direct streaming service to consumers. This service, featuring Disney, Disney Pixar, Marvel, Star Wars, National Geographic, ESPN, and other content (I’m talking about you, Bart Simpson), is a direct competitor to Netflix, Amazon Prime, HBO Go, and Hulu. And last night we watched our first content from the service.

The service does come with a cost. You have to pay a monthly fee for the service which basically translates to about $7 a month. Not a large cost BUT it is worth it? Are you subscribing? Are you giving up your other streaming services to pay for this? Have you cut the cable cord and only rely now on streaming services?

Like me, I imagine you are living on a budget (at least I hope you are). Have you built a budget to look at your income and your expenses and make sure that you can really afford everything in your mandatory and discretionary expenses? I know that many of us might imagine that streaming services (or entertainment) is a “need”, not a “want”, but the reality (of course) is that entertainment should be reasonable part of your budget, not the entirety of your budget.

Life is just a stream, sweetheart

The difference between “needs” and “wants” is an important one to learn. What counts as a “need”? Clearly housing, food, clothing, and water are needs. The economic definition of “need” is something you need to survive.

What’s a “want”? This is something you desire to have, and you may or may not be able to afford. Wants may feel important, but they aren’t necessary to survive.

This becomes an important concept to understand not just while you are a student but also for the rest of your life. If you remember last time I wrote about COA (or Cost of Attendance). In the COA budget, you will have an amount for living expenses, food, books, as well as tuition, fees and other expenses. Your job as a student is to help manage the “wants” in your budget.

So, for example, when we build a COA budget in the financial aid office we use average expenses for a student. But you have a chance to work within that budget to save money.

For example, at one institution where I worked, we had lots of residence halls. Each type of room had a different expense. Needless to say, a single at the newest dorm was much more expensive than a quad in one of the oldest dorms. Our COA was build with an average room expense, but you as a student could save money by choosing the cheaper residence.

This works with many things: books, clothes, food, etc. Do you need to buy every textbook new? Could you purchase a used textbook (or rent one) and save money from the original budget? Do you find yourself eating out all of the time? What would it look like if you packed a meal for yourself?

Don’t forget to meet your basic needs (food, shelter, water, clothing) while you are a student, and it is not unreasonable during your time in school to have more expenses than income (that’s what financial aid is for), but if you are able to limit your “wants” and focus on your “needs” then the amount you will need to borrow to help pay for college will be limited, and you will be doing much better financially when you graduate.

So I guess Disney+ might be a want? If so, no worries… There are plenty of free ways to watch movies (anyone have a library card?)

More about budgeting next time, including the difference between direct and indirect costs.