Educational Income
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This section includes information about educational income and the treatment of educational expenses.
Policy
Educational income may be countable or not countable depending on the source of the income and the programs for which the participant has applied. The net countable educational income is established by deducting allowable educational expenses from the gross countable educational income.
Countable income is used to determine an income budget. (See Income Budgeting to see how FAA determines the income budget.) FAA needs to know about income that is both countable and not countable to determine whether a budgetary unit’s expenses are exceeding their income. (See Income Eligibility for more information about how FAA uses countable and not countable income.)
Educational income can be earned or unearned income. A participant may receive financial aid (educational income) for enrollment in or for attending any of the following:
●Colleges
●Universities
●Schools for the handicapped
●Technical and trade schools
●Programs that provide for completing either a high school diploma or a General Educational Development (GED) diploma
Types of Educational Income
Educational income includes, and is not limited to, any of the following:
●BIA Allowance For Educational Expenses
●Grants, Loans, Awards and Scholarships
●Guaranteed and Other Loans
●IDA Deposits
●American Indian Education Funds
●State Funded Student Loans
●Tribal Student Loans
●Veterans Administration Educational Income
NOTE The Montgomery GI bill Chapter 30 and other income paid to the participant by the Veteran's Administration for educational purposes are not countable.
●Workforce Innovation and Opportunity Act Allowances
When a provider of a countable educational income source pays a third party for living expenses, all of the following apply:
●Countable as unearned educational income for the NA benefit.
●Not countable as income for CA benefits. The income is considered a vendor payment.
Types of Educational Expenses
Educational expenses include, and are not limited to, any of the following:
●Books and Supplies, and other necessary items.
●Mandatory Educational Fees, including any of the following:
Tuition
Lab fees
Uniforms
Equipment
Materials
Educational Supplies
●Miscellaneous educational and personal expenses are allowable for NA, including and not limited to any of the following:
Personal care, such as haircuts, laundry expenses, clothing, personal hygiene items
Recording equipment, data processing equipment, software
Auto repair, when necessary for school attendance
NOTE For CA, personal educational expenses are not an allowable education deduction from education income.
●Student Dependent Care
For NA, dependent care is not an allowable educational expense.
For CA, dependent care is an allowable educational expense when dependent care is necessary for the student to attend school.
When educational dependent care expenses exceed countable educational income for a given month, all of the following apply:
●FAA uses the excess educational childcare expense to determine the CA dependent care deduction.
●FAA deducts dependent care expenses from the countable educational income last to provide the greatest advantage to the student. For more information about the allowable dependent care deduction, see CA Dependent Care Deduction.
●Educational Transportation expenses are an allowable expense only for NA.
NOTE When the participant can verify the mileage for transportation, see Mileage Standard for the current mileage standard.
Procedures
Educational Income and Expenses
Determine whether a cash award or scholarship given to a participant from a nonprofit service club or charitable organization is a cash contribution.
The PI has the primary responsibility for providing educational income and expense verification. Accept any reasonable verification provided by the PI, school, program, or grantor of educational income or expenses. (See Educational Income and Expenses Verification)
Verify educational expenses claimed by the student when the student has countable educational income.
When requested, assist in obtaining the verification when the PI indicates an inability to provide the needed information.
When verifying educational income and expenses, use any of the following methods:
●Request the PI provide the proof.
●Call the school.
●Send the Authority to Release Student Information (FAA-0060A) form.
When neither the participant nor FAA has been able to obtain the verification by the time of processing, apply all of the following:
●Use the best available information for educational income.
●Do not allow an expense deduction for the educational expense that has not been verified.
When the expense verification is provided, recalculate the prorated amount of income for future months. Do not restore benefits.
When the participant is present, have them sign the Authority to Release (FAA‑1765A) form to contact any companies or businesses involved. The FAA-1765A can be faxed or emailed to the participant's employer when it is not possible to use the Application for Benefits (FAA-0001A) or the HEAplus Authority to Release signed statement.
Participants are not required to verify that educational income is allocated for a specific expense.
Verification
System interface and the case file(g) must be reviewed before verification is requested. No additional verification is needed when AZTECS interface or HEAplus hubs have verified the information.
The participant has the primary responsibility for providing verification. (See Participant Responsibilities – Providing Verification for additional policy.)
For NA, all of the following income is required to be verified before eligibility is determined:
●Reported on a new application, during the interview of a new application, or changes reported before the eligibility determination of a new application.
●Changes after an eligibility determination of a new application (e.g., a renewal application, mid approval contact, etc.) and any of the following apply:
The source of the income has changed.
The income is questionable(g) or unclear(g).
The reported income amount has changed by $51 or more.
The previous verification in the case file is more than 59 calendar days old.
For CA, all income is required to be verified before determining eligibility.
Examples of verification that can be used for educational income and expenses include, and are not limited to, any of the following:
●Award letter
●Loan paper
●School statement
●Student expenses
●Bank loan funds
●Participant statement for transportation expenses
●Expense receipts
●School budget sheet or computer printout
●Participant Statement verification when one of the following occur:
Obtaining documented or collateral contact verification may cause harm or undue hardship(g) for the participant.
When all of the following occur:
●Other attempts to obtain the verification have failed. This includes documented and collateral contact verification.
●The participant has requested assistance from FAA.
●The worker has evaluated the request for assistance and cannot obtain the verification from another acceptable source.
●The participant statement is not questionable(g).
AZTECS Keying Procedures
Educational Income
Countable educational income is calculated on EDWO and displayed on UNIE, for participants whose income must be included in the eligibility determination.
For educational income, key any of the following:
●BIA Allowance For Educational Expenses, key BE in the TYPE field.
●Grants, Loans, Awards and Scholarships, see policy and procedures for Grants, Loans, Awards and Scholarships.
●Guaranteed and Other Loans, key GU in the TYPE field.
●IDA Deposits, key IX in the TYPE field.
●American Indian Education Funds, from any of the following sources are not countable, key BE in the TYPE field:
Title IV funds
Title XIII funds
Funds excluded by Public Law
Bureau of Indian Affairs Funds
●American Indian Education funds from any source other than the previously listed are not countable for NA and are countable for CA. Key BL in the TYPE field.
●State Funded Student Loans, key ST in the TYPE field.
●Tribal Student Loans, key TS in the TYPE field.
●Veterans Administration Educational Income, key VA in the TYPE field.
●Workforce Innovation and Opportunity Act Allowances, key WI in the TYPE field.
NOTE Educational income (earnings and living allowances) from WIOA related Summer Component Programs (SCP), and Job Corps are not countable. (For more information, see Workforce Innovation and Opportunity Act.)
Educational Expenses
For educational expenses, key any of the following on EDWO:
●Key BO in the TYPE field for required books and supplies and other items necessary.
●Key TU in the TYPE field for mandatory educational fees or for rental or purchase.
●Key PX in the TYPE field for miscellaneous person expenses other than room and board.
NOTE For CA, personal educational expenses are not an allowable educational deduction from educational income.
●Key DC in the TYPE field for educational dependent care.
NOTE For CA, when dependent care expenses exceed the countable educational income, use the excess childcare expense to determine the CA dependent care deduction. Do not key any portion of the dependent care deduction on EXNS used as an educational expense on UNIE.
●Key TP in the TYPE field for transportation expenses.
NOTE When the participant can verify the mileage for transportation, see Mileage Standard for the current mileage amount. Transportation expense is only allowable for NA.
For budgeting educational income, see Procedures: Budgeting Educational Income.
Document the case file(g) thoroughly to support keyed codes, amounts, and frequencies. See the AZTECS Data Entry Guide for instructions on keying the AZTECS income screens.
NOTE Documentation must support determinations of eligibility and benefit level. Document in sufficient detail to ensure that any reviewer can assess whether the determination is reasonable and accurate. Include specific information regarding the reason the income is determined to be normal. (See Budgeting Income Documentation Requirements for additional information.)
Legal Authorities
AAC R6-12-501 – 503
A.R.S 46-292-P01
7 CFR 273.8(e)(20)
7 CFR 273.9(b)(1)(vi)
7 CFR 273.9(b)(2)(iv)
7 CFR 273.9(c)(1)(iv)
7 CFR 273.9(c)(3)(i)
7 CFR 273.9(c)(3)(ii)
7 CFR 273.9(c)(3)(iii)
7 U.S.C. 2014(d)(3) a-c
last revised 10/02/2023