Budgeting

Payment Types

Student income is received in a lump sum or monthly payments. It may be received at the beginning of the school year, a month or two into the school year, or even later. Sometimes, the student's award amount increases after the school term begins.

Income Received Less Often Than Monthly

All student income received less often than monthly must be averaged over the period that it is intended to cover.

 

ExampleExample

A San Jose State student submits a financial award letter stating that he will be receiving $8,000 from a private scholarship. He will receive $4000 on the first day of each semester. The school year is from 8/26 -12/19 (fall semester) and 1/23 -5/22 (spring semester). Therefore, the net student income would be prorated over 10 months.

 

Semi-Annual Reporting Variations

If the student reports different amounts on the SAR than initially reported and verified, it must be clarified whether these are part of the original prorated student income or income from another source.

 

ExampleExample

A San Jose State student submits a financial award letter stating that he will be receiving $3000 from a private scholarship. $1500 in August and $1500 in January. When the August SAR 7 is received in September, he reports receiving $750 in scholarship funds. The EW must contact the client to determine if this $750 is part of the original $3000 scholarship or is from another source.

Income Received Mid-Term

Educational income received after the beginning of the school year must still be averaged over the period it is intended to cover. 

 

ExampleExample

The school year began in August and ends in June. The student received a grant in December. The grant would be averaged over 11 months (August through June). The student reports the grant on his January SAR 7 received on February 9th. The averaged monthly income is budgeted for March through August. There is no overissuance for previous months if the reporting requirements were met and acted upon in a timely manner.

Increased Expenses Mid-Term

If an expense (exempt income) amount allotted for the student on the “Standard Student Budget” is increased during the school year for a household with:

  • MONTHLY INCOME, reaverage expenses (exempt income), including the new amount. Subtract the new average from monthly income. Revise the CalFresh budget, beginning with the month the change was reported. Do not correct budgets for prior months. There is no underissuance for the prior months.
  • LUMP SUM AVERAGED INCOME, reaverage monthly income by including the new expense (exempt income) amount. Budget the new average income beginning with the month the change was reported. Do not correct budgets for prior months. There is no underissuance for prior months.

Student Quits Mid-Term

If a student quits school after receiving the total financial aid, the average income continues to be budgeted over the period it was originally intended for.

If a student quits school after receiving less than the full amount of financial aid, recompute the budget for the entire period the financial aid was intended to cover, using the actual amount of financial aid received and subtracting any student income exemptions or deductions. Use the recomputed net student income to revise the budget beginning with the month the change was reported. Do not revise the budget for prior months. Do not issue lost benefits.

Student Applies for CalFresh Mid-Year

When a student applies for CalFresh after the beginning of the school term, average lump sum income and expenses:

  • Over the entire school year, if lump sum student income was not distributed evenly between quarters or semesters.
  • Over the current school semester or quarter (plus any remaining quarter for the year) if lump sum income was distributed evenly between quarters or semesters.

 

ExampleExample

A BOGG grant issued in two installments of $500 in the first semester and $500 in the second semester would be considered evenly distributed.

  1. Subtract exempt educational expenses from educational loans and grants for the school year/term.
  2. Count income and expenses for the full school year if lump sum income was distributed UNEVENLY between quarters or semesters
  3. Count income and expenses for just the current (and future, if any) term(s) left in this school year if lump sum income was distributed EVENLY between quarters or semesters.

Monthly Income

Some students receive educational grants, loans, etc., each month. Monthly income FROM THE SAME SOURCE does not need to be averaged. When nonexempt student income is received monthly from the same source, follow the steps below.

  1. Document on the case journal detail page that the student income is received monthly and not in a lump sum.

    1. Note: All student income received monthly is budgeted for the month it is intended to cover. Households receiving such income shall not have their monthly income varied merely because mailing or payment cycles may cause two payments to be received in one month and none in the next month.

  2. Average tuition, mandatory fees, books, transportation, supplies, dependent care, and miscellaneous expenses over the number of months in the school term.
  3. Subtract the above averaged expense(s) from the monthly income. Averaged expenses may not be deducted for a period of months longer than they were intended to cover.

 

ExampleExample

A San Jose State student submits a financial award letter with her September SAR 7 stating that she will be receiving $205 per month from a private scholarship for the school year. Exempt educational expenses total $1000 for the school year (8/26-12/19 and 1/23-5/22).

The SAR 7 for September is received on 10/4. Receipt of $205 is reported in the income section

  1. Prorate the exempt educational expenses over the school year.
    $1000 divided by 10 months = $100 per month.
  2. Subtract the prorated educational expenses from the $205.
    $205 minus $100 = $105 monthly income.
  3. In determining averaged income for a semi-annual period use $105 monthly income for the months of November through May.

Lump Sum Payments

Educational grants, loans, scholarships, fellowships, stipends, and veteran's benefits can be issued in the following manner:

  • Every two or three months, or
  • Once each semester, or
  • Once a year.

This payment type is considered a lump sum and must be averaged unless exempt. The number of months to average is determined by the actual number of calendar months included in the school term, not by the number of days or weeks in the school term. If at least one day of a school term falls in a month, that month is included in the number of months over which lump sum student income is averaged. Income received during any part of a month is counted for the entire month.

Follow the steps below to budget nonexempt lump sum student income.

  1. Obtain verification of student income and the Standard Student Budget. 
  2. Document on the Maintain Case Comments window:
    1. Type and amount of exempt income.
    2. The exact way that the student receives the nonexempt lump sum payment (for example, “BOGG of $1500 for fall semester received in one lump payment on October 10”).
  3. Enter all student information into the appropriate windows in CalSAWS.
  4. Prospectively budget the averaged amount following SAR/PB rules.

 

ExampleExample

A student receives a $1500 private scholarship on October 10. The school year began on September 7 and will end on June 3. Expenses are:

  • $200 tuition,
  • $300 books, and
  • $500 dependent care.

$1500 private scholarship
–1000 exempt expenses
$500 net student income

There are 10 months in the school year. (September and June each count as a whole month, even though the term does not extend through the entire month.)

$500 divided by 10 months = $50 mo.

The student income is reported on the 10/04 SAR 7 received on 11/8. The $50 averaged income would be counted as income in December through June. (There is no overissuance for September, October, or November.)

Budget Example

A CalFresh recipient begins attending San Jose City College on August 23. The receipt of the $3,000 nonexempt grant was reported on September SAR 7, which was received in October. The student provides a copy of the Award Letter verifying the amount and a copy of the Standard Student Budget, which indicates the following exempt educational expenses:

  • $100 mandatory fees,
  • $300 tuition,
  • $300 books and supplies
  • $300 transportation,
  • $400 dependent care, and
  • $100 miscellaneous personal expenses


Actual child care cost is expected to be $1000 for one child. Verification is provided.

The award notice earmarks a different amount, $500, for tuition.

The school year is from August through May. Complete the budget as described below.

  1. Document that the $3000 grant is a lump sum payment on the SC 163.
  2. Exempt educational expenses total $2,300 (use the higher earmarked amount, $500, for tuition regardless of the actual cost; $1,000 verified actual child care cost).
  3.  A $3000 grant minus $2300 exempt educational expenses equals $700 net nonexempt income.
  4. $700 net nonexempt income divided by 10 months (the period this income is intended to cover) equals $70 monthly net income. (Although the first payment is received in September, August is included when averaging the grant over the period it is intended to cover.)
  5. If the household is nonassistance (not Categorically Eligible), compute prospective 130% Gross and Net Income tests for November, counting the $130 student income.
    1. If the household passes, go to STEP 6.
    2. If the household fails, send a 10-day notice of action to discontinue benefits effective October 31.
  6.  To determine the average income for a SAR period, $70 monthly would be used for the months of November through August.

Work Study [63-502.2(q) (1) (A)]

Federal Title IV and Non-Federal Title IV

Federal Title IV and Non-Federal Title IV work-study income are totally exempt.

Work Study income is paid monthly based on the student's hours worked and is separate from loans and grants.

Work-study program grants may be handled differently from other student income since the student's work hours and monthly payments may vary. The student will receive the full grant only if the required hours are worked.

Related Topics

Students