So many of our subscribers are focused on getting it right when it comes to reporting their scholarships on the FAFSA. It is so important to declare grants, scholarships and other types of “taxed” aid. This type of aid is factored into the AGI (Adjusted Gross Income).
The completion of the FAFSA (Free Application for Federal Student Aid) is quite tricky and the processing of the FAFSA and subsequent delivery of the SAR (Student Aid Report) can be delayed if there are any discrepancies.
When it comes to “taxed” scholarships and aid received directly by the applicant, the amounts are reported to the I.R.S (Internal Revenue Service) in the AGI (Adjusted Gross Income).
Here is a very good article, “Scholarships and your EFC (Estimated Family Contribution)” that can shed light on the process of how important it is to report scholarship aid on your FAFSA.
Keep in mind that this issue will arise if you are completing the 11-12 FAFSA using 2010 tax returns. On the FAFSA, question 43D will address the issue.