Question Regarding FAFSA and ROTC Stipend

Discussion in 'ROTC' started by goaliedad, Apr 8, 2011.

  1. goaliedad

    goaliedad Parent

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    For those ROTC cadets/families receiving stipends (contracted), is the Stipend considered untaxed military housing allowance on the FAFSA form? We would like to file the FAFSA this weekend - not that we expect any grants, but it does qualify her for Stafford Loans.

    Thanks!
     
  2. Just_A_Mom

    Just_A_Mom Member

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    No, it's not untaxed military housing. Do not report the stipend.
     
  3. grtkidmom

    grtkidmom Member

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    great timing, I am also doing FAFSA this AM and wondered the same thing about reporting stipend. Just to confirm, do not report stipend, correct.

    If so great, but where would I look to find the stipend reporting info.

    Thanks
     
  4. paradoxer

    paradoxer Member

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    Not so fast

    In looking over IRS publications I can find no where that the stipend is exempted from being reported as untaxed income on the FAFSA. Just_A_Mom do you have a document that includes this as an exclusion?
     
  5. grtkidmom

    grtkidmom Member

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    good quesiton, I am stuck in FAFSA waiting confirmation on what to do with stipend. I emailed batallion and school earlier this week with same question. Batallion was no help and of course schools operate "school time" and have not heard back
     
  6. paradoxer

    paradoxer Member

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    Was it the first year of participation?

    Just in case you only had $1200 in stipend in 2010 and no other student income it would be below the income protection limit of $4500 and wouldn't increase the EFC. However, I can see why you'd want to know the answer to the question before proceeding.
     
  7. grtkidmom

    grtkidmom Member

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    Thanks,
    DS 1000 in stipend, 375 in books and about 1700 in summer job income. So he is below the $4500.

    Still not sure if I will list stipend income. Just don't like to guess
     
  8. paradoxer

    paradoxer Member

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    Last edited: Apr 9, 2011
  9. AROTC Parent

    AROTC Parent Member

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    1098 Tuition and Scholarship

    Along the same lines....FAFSA....

    If the ROTC Scholarship, used for tuition, is now considered a 'VA Benefit' and not a scholarship for Federal calculation of EFC should the school have included it in the 1098?

    Did all your schools include it in the 1098?

    Is it reportable on the FAFSA as a scholarship?

    Thoughts, ideas, even speculation is appreciated.
     
  10. paradoxer

    paradoxer Member

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    Recent Change

    There are schools out there that probably are still using pre 2009 rules. Having said that the 1098-T rules are funky because actual amounts paid are not required to be reported only actual costs so you always have to check to see if they are the same for the tax period specified.

    The ROTC scholarship used for tuition would not be reflected on the FAFSA.

    ROTC scholarship money for room and board could potentially be required on the FAFSA but more often would be picked up on the 1040 because it is usually substantial enough to require the student to file a tax return.
     
  11. goaliedad

    goaliedad Parent

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    That was my initial thought, but then I started wondering "Why are they asking?"

    I am familiar with the IFAP document mentioned in this thread and it states that these benefits won't be used in EFA calculations. However, it doesn't specifically say to exclude this from FAFSA.

    I am starting to think they collect this information (stipends and such) only to pass along to institutions (they are not required ignore this assisitance whereas federal programs are required to ignore this assistance).

    Unless someone here has gotten or given (Clarkson? Marist?) official guidance someplace, I am inclined to report the Fall Stipend and see where it takes us. In our case, we are just going to see Stafford Loan assistance (based upon last year's results), so I doubt that this will affect that result. I just want to make sure that everything is square in our reporting.

    I will look at the reporting that is generated to see if including the stipend changes the EFC number (don't know if this is doable though).

    I am quite surprised that nobody has asked this question before.
     
  12. paradoxer

    paradoxer Member

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    EFC Calculator

    Here is a link to an EFC calculator where you could put in the numbers both ways and see if there is a difference.

    http://www.finaid.org/calculators/
     
  13. goaliedad

    goaliedad Parent

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    I just clicked there and noticed that the "tables for award year" only went through 2008-2009 which strangely enough is the year before the policy change was in effect. I don't think I can test the theory with this tool, unfortunately.
     
  14. paradoxer

    paradoxer Member

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    Updated One

    http://apps.collegeboard.com/fincalc/efc_welcome.jsp?noload=Y

    Unusual that the best known financial aid guru's website has such old data.
    Sorry about that, here's the College Board's which says it is current.
     
  15. Just_A_Mom

    Just_A_Mom Member

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    I would suggest you call the 800 number for FAFSA and get their advice.

    paradoxer - post#8 your assumption is correct.

    I am saying not to report the ROTC stipend because it's a subsistence allowance that can't be used to determine need. Go to A4 on that link - the subsistence allowance is your monthly stipend.

    If you report it as untaxed income it will be calculated as income available and would reduce your EFC.

    Please do not report scholarships that are untaxable on your FAFSA. Only report those that are reportable on your tax return - i.e. a scholarship for room and board.

    Remember- if you use the ROTC scholarship for room and board and pay tuiton out of pocket then you can claim (depending on your income) the educational tax credit(s). These must be reported as per FAFSA instructions.
     
  16. gojack

    gojack ....

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    Summary;
    ROTC Educational Benefits are now classified as Federal veterans’ education benefits-
    So now ROTC payments are not classed as income and must not to be included on FAFSA.
    (Stipend = subsistence allowance benefits)

    ----------------------------------------------------------------------------------------------------------------------------------------------------------------

    "Q4: Are the education benefits provided under the DOD’s Reserve Officers Training Corps (ROTC) considered Federal veterans’ education benefits and therefore not considered EFA even though they are not administered by the VA and are not provided to veterans?

    A4: As noted earlier, the amended section 480(c) of the HEA includes, in addition to education benefit programs administered by the VA, two ROTC programs that are administered by the DOD. These are the scholarship benefits provided under the Senior Reserve Officers Training Corps (ROTC) in chapter 103 of title 10 of the United States Code and the subsistence allowance benefits provided under the ROTC in chapter 3 of title 37 of the United States Code. Therefore, education benefits from these two ROTC programs must be excluded as EFA even though they are not VA programs and the recipients are not veterans.

    ----------------------------------------------------------------------------------------------------------------------------------------------------------------

    Q7: Since these Federal veterans’ education benefits are no longer considered EFA, may they be included as income in the calculation of a student’s expected family contribution(EFC)?

    A7: No. Federal veterans’ education benefits, as defined in section 480(c) of the HEA, have been and continue to be excluded from the calculation of a student’s EFC"

    ----------------------------------------------------------------------------------------------------------------------------------------------------------------

    Guidelines HERE
    -----------------------------------------------------------------------------------------------------------------------------------------------------------------

    A recent bill Higher Education Act Technical Corrections Bill (H.R.1777) was passed which changes how federal student aid eligibility is determined for Veteran and ROTC students. Among the provisions included in the bill is an updated definition of the term "Veterans Education Benefits".

    Previously, Veteran and ROTC Education Benefits were counted as part of a student's overall financial aid package. The new legislation exempts these benefits, resulting in the potential for expanded eligibility for various types of federal financial aid programs including but not limited to the Supplemental Educational Opportunity Grant, Federal Work-study, and Federal Direct Student and Parent Loans.

    Veteran and ROTC Education Benefits will be considered when awarding institutional need based aid.

    Link
     
    Last edited: Apr 9, 2011
  17. grtkidmom

    grtkidmom Member

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    Wow, great info and thanks for all your input. Now I can finish FAFSA and other things.
     
  18. goaliedad

    goaliedad Parent

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    I highlighted in red the phrases I think means report the stipend and let FAFSA exclude it from the EFC calculation.

    When they say "must be excluded" I think they are talking about in the calculation, not the data collection or reporting.

    And as I thought, they still want to pass the stipend information onto the institutions, so they can use that information as the institution sees fit.

    This (collecting the stipend data but not using it in the EFC calculation) would be consistent with allowing "federal" aid to be processed without denying institutions information that they may wish to act upon (or not act upon) as they see fit.

    I think the stipend will be excluded from the EFC regardless of whether or not it is entered on FAFSA (it seems that it would be a violation of the new act to do otherwise), but entering it allows the institution to tune its awards accordingly.

    I think I will call the FAFSA hotline to get clarification of the issue Monday as JAM suggested. I will report any findings.
     
    Last edited: Apr 9, 2011
  19. paradoxer

    paradoxer Member

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    Consider the audience of the document

    Where/How are you going to report it on the FAFSA such that they know it should be excluded? I don't believe there is any way you can delineate that it is an ROTC stipend. If you put in under untaxed income it will be included.

    This document is written to financial aid administrators and basically gives them the OK to remove the stipends if reported and to program their systems to exclude the ROTC scholarship awards when awarding aid.
     
  20. gojack

    gojack ....

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    Very valid points goaliedad,

    Please take a look at this also Link It goes into more detail, and may help you with your phone call.

    My working theory is this, I will not report ROTC/Stipend on FAFSA
    The school will know about the scholarship-they get the check.
    So they will also know about stipends, if they have an issue - I am sure I will hear about it.
    If they ask, I can argue based on the guidance memo and the info from the FinAid site if needed.
     
    Last edited: Apr 9, 2011

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