Student Income

Scholarships or Achievement Awards

Scholarships and achievement awards based on merit, and not need, are not exempt and are treated as unearned income, if recurring, or as a lump sum payment, if nonrecurring, after allowable educational expenses are deducted. Refer to EW Action for the calculation.

Reminder: Any award or scholarship provided by a public or private entity to, or on behalf of, a dependent child is exempt from consideration as income in the CalWORKs program.

Non-Exempt Financial Aid

Non-federal financial aid payments are not exempt from consideration in the CalWORKs budget. Only the verifiable amount of educational income used towards educational expenses may be excluded from the CalWORKs budget. The following are types are examples of nonexempt non-federal financial aid:

Grants from charitable organizations
Private scholarship
Non-federally subsidized loans awarded on merit rather than need.

Treatment of Income

Verification of the educational expenses, for the academic term, must be provided in order to exempt the portion of the income used for educational expenses. The nonexempt portion of the non-federal financial aid payment is treated as a lump sum (i.e. property) when the payment is nonrecurring. If the payment is recurring, then the non-federal financial aid payment is considered unearned income in the CalWORKs budget.

Example Example A client is awarded a $1,000 nonexempt grant. The educational expenses are $600 and the remaining $400 will be used for living expenses. The client chooses to use the nonexempt grant to cover educational expenses. The $600 used for educational expenses is considered exempt and will not be counted towards the budget. The remaining $400 will be counted as a lump sum if the non-exempt grant is nonrecurring. If the non-exempt grant is recurring, then the $400 is counted as unearned income.

Failure To Provide

When a client fails to provide verification of educational expenses, or it is determined that the financial aid income has been used to meet needs not associated with school attendance costs, the total amount of the income is counted as a lump sum (i.e. property) when nonrecurring or as unearned income when recurring. Any remaining portion of the financial aid shall be considered a resource in the following month.

Welfare To Work (WTW)

WTW participants may have educational expenses paid for by WTW supportive services when in receipt of non-exempt financial aid. The request is documented on the “Student Financial Aid Statement Welfare to Work Supportive Services” (WTW 8). The portion of the non-exempt financial aid not used towards educational expenses is considered in the benefit determination. Verification of educational expenses must be provided in order to exempt the portion of the income used towards educational expenses.

Example Example A client is awarded a non-federal subsidized loan of $1,000. The educational expenses are $800. $300 of the educational expenses are covered by supportive services. The client uses $500 of the non-exempt loan to pay the remaining educational expense. The last $500 is counted as a lump sum if the non-exempt loan is nonrecurring or counted as unearned income if the non-exempt loan is recurring.

Example Example A client is awarded a $1000 nonexempt grant. The educational expenses are $600 and the client chooses to use supportive services to cover educational expenses. Unless the client uses the nonexempt grant to cover other educational expenses, the $1000 is counted as a lump sum if the nonexempt grant is nonrecurring or as unearned income if the nonexempt grant is recurring.

Example Example A client is awarded a $1000 nonexempt scholarship. The educational expenses are $600 and the remaining $400 will be used for living expenses. The client chooses to use the nonexempt scholarship to cover educational expenses instead of having the county pay for those educational expenses which can be covered as supportive services. The $600 will not be used towards the CalWORKs budget. The remaining $400 will be counted as a lump sum if the nonexempt scholarship is nonrecurring or counted as unearned income if the nonexempt scholarship is recurring.

EW Action

Clients must provide verification of the type and amount of educational income received. When the educational income is not exempt, EWs must do the following:

Determine the total amount of nonexempt grant received.
Determine the amount used by the client to meet educational expenses. The student must provide documentation and/or verification of these costs in order to be allowed. Subtract this amount from the total amount in Step 1.
Use this “net” amount as unearned income and/or property in the client’s CalWORKs budget.

Reminder: When a client receives a fully exempt grant as well as a nonexempt grant, the educational expenses are deducted from the nonexempt grant. The expenses are not deducted from the exempt grant.