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Books and Supplies $500.00 Transportation $100.00

Step One: Subtract expenses from exempt educational income: $3000.00 - 4600.00 - $1600.00 (unmet educational expenses)

Step Two: Establish what portion, if any, of the non-exempt scholarship money is accessible to the student. It has been verified that the scholarship funds are sent directly to the school. The financial aid office verifies that a refund check for $2500.00 will be sent to Mr. Smith. $1000.00 of the total scholarship money is excluded from consideration since it was retained by the school and is not available to the recipient/student. This leaves $2500.00 available non-exempt income.

Step Three: Subtract the unmet expenses in Step One ($1600) from the remaining non- exempt income:

$2500.00 available non-exempt educational income - 1600.00 unmet educational expenses $ 900.00 countable educational income is prorated over the month it was intended to cover and budgeted as unearned income to the AG. 3430.05.00 ALLOWABLE EXPENSES FROM EDUCATIONAL INCOME

Allowable expenses for undergraduates and graduate students include tuition, mandatory fees, supplies, and books. Mandatory fees include the costs of rental or purchase of equipment, materials and supplies related to the pursuit of the course of study involved for all programs. Miscellaneous personal expenses (other than normal living expenses) are also allowable deductions if they are incidental to attending the school, institution, or program. Such expenses could include such things as subscriptions to educational publications or dues for a professional association. Normal living expenses which are not allowable would include such items as food, rent, board, clothes, laundry, haircuts, and personal hygiene items. Expenses for sports, games, hobbies, or non-credit courses do not qualify for the education credits or tuition and fees deduction, except when the course or activity is part of the student’s degree program.6 3435.00.00 BUDGETING LUMP SUM INCOME A lump sum is a non-recurring payment that includes such items as retroactive RSDI or VA benefits, refunds of Medicare Part B premiums, insurance settlements, and inheritances. An SSI lump sum is disregarded as income in the month of receipt. For MED 1, 2 and 4 budgeting, any lump sum payment received in a month prior to the month in which authorization of the application takes place, is income in the month of receipt. However,