Article | HOTMA Highlights | Student Financial Income Part 2 | Non-Section 8 ProgramsOct 17, 2023
Summary Note | Non-Section 8 programs will exclude assistance that comes from the Higher Education Act of 1965 (HEA). However, if the assistance received from HEA programs and other scholarships and grants exceeds the covered educational expenses, then the amount of the scholarships and grants that is in excess of the covered educational expenses will be counted as income.
The Details | HOTMA significantly changes how student financial assistance will be addressed. According to the HUD implementation Notice G.16, "The treatment of student financial assistance depends on the HUD program, student/household characteristics, and the type of financial assistance received by the student. The student financial assistance rules apply to both full-time and part-time students." Another article in this series addressed how student financial assistance is counted for recipients of Section 8 assistance. This article will address how students who are not Section 8 recipients will have any student assistance calculated. It also applies to students who are receiving Section 8 assistance but who are exempt from the Section 8 rules because they are over the age of 23 with a dependent child.
In the Implementation Notice, G.16.c, HUD says, "All assistance received under 479B of the HEA by students participating in the Public Housing or non–Section 8 programs administered by MFH is excluded from income. Other student financial assistance received by the student that, either by itself or in combination with HEA assistance, exceeds the actual covered costs is not excluded from income. Prior to the final rule, the full amount of student financial assistance paid directly to the student or to the educational institution was excluded."
"Actual covered costs include: tuition, books, supplies (including supplies and equipment to support students with learning disabilities or other disabilities), room and board, and fees required and charged to a student by an institution of higher education (as defined under section 102 of the Higher Education Act of 1965. For a student who is not the head of household, cohead, or spouse, actual covered costs also include the reasonable and actual costs of housing while attending the institution of higher education and not residing in an assisted unit."
"The formula for calculating the amount of other student financial assistance that is excluded from income always begins with deducting the assistance received under 479B of the HEA from the total actual covered costs, because the 479B assistance is intended to pay the student’s actual covered costs. This formula is illustrated in chart 2. We have reproduced that chart below.
Excerpts from the HOTMA Implementation Notice | Chart G1 and Example G10
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