Can financial aid be counted as part of your annual income?

Question

It is for a credit card application. I was curious, and i need a very quick response!!

Answer 1

All financial aid is always "income" - I suspect that you're asking whether all financial aid is TAXABLE income.

The answer depends on the specific form of financial aid involved, and specifically, what those funds are used for.

Money that is received (and used) for tuition, books and fees is generally non-taxable income. You don't need to declare it on your tax returns.

Money that is used to pay for room and board is taxable income - and the recipient must claim those funds on their annual return.

Regardless of what you use the funds for - money that is paid to you in exchange for services that you provide is always taxable. The best example of this are the stipends paid to graduate school students in exchange for teaching or research responsibilities. Those funds are always taxable income, even if you use them to pay for tuition or books.

I'm not sure what the credit card application is asking you for - it seems likely that they are only interested in money that you are receiving that would be available to pay your credit card balance. Because financial aid is not available (at least it's not supposed to be available) for non-educational uses, your financial aid would not be of "interest" to the credit card company, and I would not recommend including it as some sort of claimed income that you were using to substantiate your financial wherewithal.

Good luck to you. If you want the best possible answer, call the credit card company's 800 number and ask them.