What Happens if FAFSA is More Than Tuition?
It is not uncommon for the amount of financial aid you receive from the Free Application for Federal Student Aid (FAFSA) to be more than the cost of tuition. Since financial aid is intended to cover your education expenses, schools expect students to use as much as they need to pay for direct and indirect costs. Once you receive an overage check from your financial aid, the Internal Revenue Service (IRS) may count this as income, so you will have to file taxes.
The first step is to contact your school’s financial aid office and ask them how to handle the overage. Many schools will require you to return the overage check to the school and apply it to other educational expenses such as books, room and board, or other fees. This is the most common way to handle the situation, and it is important to do this as soon as possible.
If you are unable to return the overage check to the school, you may be able to use the money to pay for other educational expenses such as books, room and board, or other fees. However, you should keep in mind that any money you use for non-educational expenses may be considered taxable income.
It is important to note that if you receive an overage check from your financial aid, you may be required to report it as income on your taxes. The IRS may consider the overage check as income, so you will need to file taxes and report the amount of the overage.
In addition, you should be aware that if you use the overage check for non-educational expenses, you may be subject to a penalty from the IRS. The penalty is usually 10% of the amount of the overage check, so it is important to be aware of this before you use the money for anything other than educational expenses.
It is important to remember that if you receive an overage check from your financial aid, you should contact your school’s financial aid office and ask them how to handle the overage. If you are unable to return the overage check to the school, you should be aware that any money you use for non-educational expenses may be considered taxable income. Additionally, you should be aware that if you use the overage check for non-educational expenses, you may be subject to a penalty from the IRS. May 20, 2020.
