As used in this part:
(a) Total income
Terms Used In 20 USC 1087vv
- assets: means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, other securities, mutual funds, tax shelters, qualified education benefits (except as provided in paragraph (3)), and the net value of real estate, income producing property, and business and farm assets. See 20 USC 1087vv
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Dependent: A person dependent for support upon another.
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- excludable income: means --
(1) any student financial assistance awarded based on need as determined in accordance with the provisions of this part, including any income earned from work under part C of this subchapter. See 20 USC 1087vv
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- independent: when used with respect to a student, means any individual who--
(A) is 24 years of age or older by December 31 of the award year. See 20 USC 1087vv
- individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See 1 USC 8
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- qualified education benefit: means --
- qualified higher education expenses: has the meaning given the term in section 529(e) of title 26. See 20 USC 1087vv
- special combat pay: means pay received by a member of the Armed Forces because of exposure to a hazardous situation. See 20 USC 1087vv
- untaxed income and benefits: means --
(A) child support received. See 20 USC 1087vv
- veteran: means any individual who--
(A) has engaged in the active duty in the United States Army, Navy, Air Force, Marines, or Coast Guard. See 20 USC 1087vv
(1)(A) Except as provided in subparagraph (B) and paragraph (2), the term “total income” is equal to adjusted gross income plus untaxed income and benefits for the preceding tax year minus excludable income (as defined in subsection (e)).
(B) Notwithstanding section 1087rr(a) of this title, the Secretary may provide for the use of data from the second preceding tax year when and to the extent necessary to carry out the simplification of applications (including simplification for a subset of applications) used for the estimation and determination of financial aid eligibility. Such simplification may include the sharing of data between the Internal Revenue Service and the Department, pursuant to the consent of the taxpayer.
(2) No portion of any student financial assistance received from any program by an individual, no portion of veterans’ education benefits received by an individual, no portion of a national service educational award or post-service benefit received by an individual under title I of the National and Community Service Act of 1990 (42 U.S.C. 12511 et seq.), no portion of any tax credit taken under section 25A of title 26, and no distribution from any qualified education benefit described in subsection (f)(3) that is not subject to Federal income tax, shall be included as income or assets in the computation of expected family contribution for any program funded in whole or in part under this chapter.
(b) Untaxed income and benefits
(1) The term “untaxed income and benefits” means–
(A) child support received;
(B) workman’s compensation;
(C) veteran‘s benefits such as death pension, dependency, and indemnity compensation, but excluding veterans’ education benefits as defined in subsection (c);
(D) interest on tax-free bonds;
(E) housing, food, and other allowances (excluding rent subsidies for low-income housing) for military, clergy, and others (including cash payments and cash value of benefits), except that the value of on-base military housing or the value of basic allowance for housing determined under section 403(b) of title 37 received by the parents, in the case of a dependent student, or the student or student’s spouse, in the case of an independent student, shall be excluded;
(F) cash support or any money paid on the student’s behalf, except, for dependent students, funds provided by the student’s parents;
(G) untaxed portion of pensions;
(H) payments to individual retirement accounts and Keogh accounts excluded from income for Federal income tax purposes; and
(I) any other untaxed income and benefits, such as Black Lung Benefits, Refugee Assistance, or railroad retirement benefits, or benefits received through participation in employment and training activities under title I of the Workforce Innovation and Opportunity Act [29 U.S.C. 3111 et seq.].
(2) The term “untaxed income and benefits” shall not include–
(A) the amount of additional child tax credit claimed for Federal income tax purposes;
(B) welfare benefits, including assistance under a State program funded under part A of title IV of the Social Security Act [42 U.S.C. 601 et seq.] and aid to dependent children;
(C) the amount of earned income credit claimed for Federal income tax purposes;
(D) the amount of credit for Federal tax on special fuels claimed for Federal income tax purposes;
(E) the amount of foreign income excluded for purposes of Federal income taxes; or
(F) untaxed social security benefits.
(c) Veteran and veterans’ education benefits
(1) The term “veteran” means any individual who–
(A) has engaged in the active duty in the United States Army, Navy, Air Force, Marines, or Coast Guard; and
(B) was released under a condition other than dishonorable.
(2) The term “veterans’ education benefits” means veterans’ benefits the student will receive during the award year, including but not limited to benefits under the following provisions of law:
(A) Chapter 103 of title 10 (Senior Reserve Officers’ Training Corps).
(B) Chapter 106A of title 10 (Educational Assistance for Persons Enlisting for Active Duty).
(C) Chapter 1606 of title 10 (Selected Reserve Educational Assistance Program).
(D) Chapter 1607 of title 10 (Educational Assistance Program for Reserve Component Members Supporting Contingency Operations and Certain Other Operations).
(E) Chapter 30 of title 38 (All-Volunteer Force Educational Assistance Program, also known as the “Montgomery GI Bill–active duty”).
(F) Chapter 31 of title 38 (Training and Rehabilitation for Veterans with Service-Connected Disabilities).
(G) Chapter 32 of title 38 (Post-Vietnam Era Veterans’ Educational Assistance Program).
(H) Chapter 33 of title 38 (Post-9/11 Educational Assistance).
(I) Chapter 35 of title 38 (Survivors’ and Dependents’ Educational Assistance Program).
(J) Section 903 of the Department of Defense Authorization Act, 1981 (10 U.S.C. 2141 note) (Educational Assistance Pilot Program).
(K) Section 156(b) of the “Joint Resolution making further continuing appropriations and providing for productive employment for the fiscal year 1983, and for other purposes” (42 U.S.C. 402 note) (Restored Entitlement Program for Survivors, also known as “Quayle benefits”).
(L) The provisions of chapter 3 of title 37, related to subsistence allowances for members of the Reserve Officers Training Corps.
(d) Independent student
The term “independent”, when used with respect to a student, means any individual who–
(A) is 24 years of age or older by December 31 of the award year;
(B) is an orphan, in foster care, or a ward of the court, or was an orphan, in foster care, or a ward of the court at any time when the individual was 13 years of age or older;
(C) is, or was immediately prior to attaining the age of majority, an emancipated minor or in legal guardianship as determined by a court of competent jurisdiction in the individual’s State of legal residence;
(D) is a veteran of the Armed Forces of the United States (as defined in subsection (c)(1)) or is currently serving on active duty in the Armed Forces for other than training purposes;
(E) is a graduate or professional student;
(F) is a married individual;
(G) has legal dependents other than a spouse;
(H) has been verified during the school year in which the application is submitted as either an unaccompanied youth who is a homeless child or youth (as such terms are defined in section 725 of the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11434a]), or as unaccompanied, at risk of homelessness, and self-supporting, by–
(i) a local educational agency homeless liaison, designated pursuant to section 722(g)(1)(J)(ii) of the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11432(g)(1)(J)(ii)];
(ii) the director of a program funded under the Runaway and Homeless Youth Act [34 U.S.C. 11201 et seq.] or a designee of the director;
(iii) the director of a program funded under subtitle B of title IV of the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11371 et seq.] (relating to emergency shelter grants) or a designee of the director; or
(iv) a financial aid administrator; or
(I) is a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances.
(2) Simplifying the dependency override process
A financial aid administrator may make a determination of independence under paragraph (1)(I) based upon a documented determination of independence that was previously made by another financial aid administrator under such paragraph in the same award year.
(e) Excludable income
The term “excludable income” means–
(1) any student financial assistance awarded based on need as determined in accordance with the provisions of this part, including any income earned from work under part C of this subchapter;
(2) any income earned from work under a cooperative education program offered by an institution of higher education;
(3) any living allowance received by a participant in a program established under the National and Community Service Act of 1990 [42 U.S.C. 12501 et seq.];
(4) child support payments made by the student or parent;
(5) payments made and services provided under part E of title IV of the Social Security Act [42 U.S.C. 670 et seq.]; and
(6) special combat pay.
(1) The term “assets” means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, other securities, mutual funds, tax shelters, qualified education benefits (except as provided in paragraph (3)), and the net value of real estate, income producing property, and business and farm assets.
(2) With respect to determinations of need under this subchapter, other than for subpart 4 of part A of this subchapter, the term “assets” shall not include the net value of–
(A) the family’s principal place of residence;
(B) a family farm on which the family resides; or
(C) a small business with not more than 100 full-time or full-time equivalent employees (or any part of such a small business) that is owned and controlled by the family.
(3) A qualified education benefit shall be considered an asset of–
(A) the student if the student is an independent student; or
(B) the parent if the student is a dependent student, regardless of whether the owner of the account is the student or the parent.
(4) In determining the value of assets in a determination of need under this subchapter (other than for subpart 4 of part A of this subchapter), the value of a qualified education benefit shall be–
(A) the refund value of any tuition credits or certificates purchased under a qualified education benefit; and
(B) in the case of a program in which contributions are made to an account that is established for the purpose of meeting the qualified higher education expenses of the designated beneficiary of the account, the current balance of such account.
(5) In this subsection:
(A) The term “qualified education benefit” means–
(i) a qualified tuition program (as defined in section 529(b)(1)(A) of title 26) or other prepaid tuition plan offered by a State; and
(ii) a Coverdell education savings account (as defined in section 530(b)(1) of title 26).
(B) The term “qualified higher education expenses” has the meaning given the term in section 529(e) of title 26.
(g) Net assets
The term “net assets” means the current market value at the time of application of the assets (as defined in subsection (f)), minus the outstanding liabilities or indebtedness against the assets.
(h) Treatment of income taxes paid to other jurisdictions
(1) The tax on income paid to the Governments of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau under the laws applicable to those jurisdictions, or the comparable tax paid to the central government of a foreign country, shall be treated as Federal income taxes.
(2) References in this part to title 26, Federal income tax forms, and the Internal Revenue Service shall, for purposes of the tax described in paragraph (1), be treated as references to the corresponding laws, tax forms, and tax collection agencies of those jurisdictions, respectively, subject to such adjustments as the Secretary may provide by regulation.
(i) Current balance
The term “current balance of checking and savings accounts” does not include any funds over which an individual is barred from exercising discretion and control because of the actions of any State in declaring a bank emergency due to the insolvency of a private deposit insurance fund.
(j) Other financial assistance
(1) For purposes of determining a student’s eligibility for funds under this subchapter, estimated financial assistance not received under this subchapter shall include all scholarships, grants, loans, or other assistance known to the institution at the time the determination of the student’s need is made, including national service educational awards or post-service benefits under title I of the National and Community Service Act of 1990 (42 U.S.C. 12511 et seq.), but excluding veterans’ education benefits as defined in subsection (c).
(2) Notwithstanding paragraph (1), a tax credit taken under section 25A of title 26, or a distribution that is not includable in gross income under section 529 of such title, under another prepaid tuition plan offered by a State, or under a Coverdell education savings account under section 530 of such title, shall not be treated as estimated financial assistance for purposes of section 1087kk(3) of this title.
(3) Notwithstanding paragraph (1) and section 1087ll of this title, assistance not received under this subchapter may be excluded from both estimated financial assistance and cost of attendance, if that assistance is provided by a State and is designated by such State to offset a specific component of the cost of attendance. If that assistance is excluded from either estimated financial assistance or cost of attendance, it shall be excluded from both.
(4) Notwithstanding paragraph (1), special combat pay shall not be treated as estimated financial assistance for purposes of section 1087kk(3) of this title.
(1) Except as otherwise provided, the term “dependent of the parent” means the student, dependent children of the student’s parents, including those children who are deemed to be dependent students when applying for aid under this subchapter, and other persons who live with and receive more than one-half of their support from the parent and will continue to receive more than half of their support from the parent during the award year.
(2) Except as otherwise provided, the term “dependent of the student” means the student’s dependent children and other persons (except the student’s spouse) who live with and receive more than one-half of their support from the student and will continue to receive more than half of their support from the student during the award year.
(l) Family size
(1) In determining family size in the case of a dependent student–
(A) if the parents are not divorced or separated, family members include the student’s parents, and the dependents of the student’s parents including the student;
(B) if the parents are divorced or separated, family members include the parent whose income is included in computing available income and that parent’s dependents, including the student; and
(C) if the parents are divorced and the parent whose income is so included is remarried, or if the parent was a widow or widower who has remarried, family members also include, in addition to those individuals referred to in subparagraph (B), the new spouse and any dependents of the new spouse if that spouse’s income is included in determining the parents’ adjusted available income.
(2) In determining family size in the case of an independent student–
(A) family members include the student, the student’s spouse, and the dependents of the student; and
(B) if the student is divorced or separated, family members do not include the spouse (or ex-spouse), but do include the student and the student’s dependents.
(m) Business assets
The term “business assets” means property that is used in the operation of a trade or business, including real estate, inventories, buildings, machinery, and other equipment, patents, franchise rights, and copyrights.
(n) Special combat pay
The term “special combat pay” means pay received by a member of the Armed Forces because of exposure to a hazardous situation.