SUMMER INCOME & YOUR STUDENT CONTRIBUTION

Transcription

1 SUMMER INCOME & YOUR STUDENT CONTRIBUTION

2 Outline Formulas/Definitions Work Requirement Income/Earnings Taxes Allowances The SC Examples

3 Basic Formula for Determining HLS Grant G E = COA (BL + PC + SC) Cost of Attendance: $85,000 (with SHIP), or $82,610 (no SHIP) Base Loan = $45,000

4 Student Contribution (SC) SC from Assets is determined at the time of initial application for financial aid. SC from Income is recalculated at the beginning of every academic year The two amounts added together are the total SC.

5 Work Requirement Work Requirement: A minimum of 8 Full-Time documented weeks is required. Please note the following: Volunteer or Non-Legal work DOES count toward the work requirement. Self-Employment DOES NOT count toward the work requirement. Academic Programs DO NOT count toward the work requirement.

6 Work Requirement, con t Imputed SC: An SC will be imputed if you don t meet the minimum req. The imputed amount is pro-rated for the weeks not worked. The maximum weekly SC amounts that will be imputed are: L max = $ 660/week L max = $1,540/week This amount is added to the raw SC, not the summer income

7 Work Requirement: Exception(s) Exceptions(s): Full or partial exceptions can be made for: Pregnancy Unexpected Medical Issue(s) Contact the office as soon as reasonably possible to discuss your particular situation.

8 Income/Earnings Income: Gross pay BEFORE taxes or deductions You will be asked to estimate your gross weekly pay and this amount will be used in the preliminary award. Both the Total Summer Earnings and the Gross Weekly Pay will be verified in the Fall Update process.

9 What is My Gross Weekly Pay? Gross Weekly Pay: Your weekly pay BEFORE taxes/deductions How can you tell the difference between semimonthly and bi-weekly pay? Ask your HR office Check the paystub (especially the Pay Period start/end dates) If the amount ends in a repeating decimal ($6, or $6,673.34), it s usually semi-monthly

10 What is My Gross Weekly Pay? Part 2 Given a semi-monthly amount, how do I determine my weekly pay? Actual Weekly Rate: Multiply the semi-monthly amount by 24, then divide that amount by 52. Example: $6, x 24 pay periods = $160, (yearly salary) $160, weeks = $3, (weekly rate)

11 How Much Income Will Be Used? We cap the income used at the 12 highest paid weeks. Example: Given these 4 summer position and their weekly pay rates, we would use only $36,540 out of a total $48,540 earned. 2 $3,080 (we use 2 of 2 weeks) 5 $3,070 (we use 5 of 5 weeks) 3 $3,010 (we use 3 of 3 weeks) 6 $3,000 (we use 2 of 6 weeks)

12 Other than Wages, What Counts as Income? The following are also treated as Income: Housing Assistance/Reimbursement Travel Assistance/Reimbursement These amounts are added to either Additional Income or Untaxed Income (based on how they re reported) and are used in the Update calculation of the SC.

13 Taxes Withholding: Tax is typically withheld at an annualized rate, i.e., the rate that would be withheld if you worked there for the whole year instead of just the summer. Adjustments: Some employers will adjust for partyear/summer employees. Check with your employer s HR office. IRS Publication 505 can be of help. We are not able to assist you with this.

14 Allowances Allowances protect part of the summer income to cover certain additional expenses. Summer Living Allowance (SLA): Automatically built in to every HLS student s calculation. Incorporates higher living allowance than is given during the academic year.

15 Allowances, con t NOTE: Except for the SLA, documentation is required for ALL allowances. Additional summer income allowances can include: City Tax If deducted on paystub Note: does not include DC tax

16 Allowances, con t Car Rental For students working in cities without reasonable public transport Only for the time during which the student is working Summer 2015 allowance was capped at $1,500 Unexpected Medical Expenses Only for medically necessary care (i.e., not elective or cosmetic)

17 Other Considerations Allowances cannot be made for Summer moving expenses Work wardrobe Food expenses Summer rent No allowances for two rent payments If you cannot sublet your apartment for the summer, you will be responsible for both rent payments

18 Student Budget and SHIP Waiving SHIP: Students who waive the Student Health Insurance Program (SHIP) will have their budgets adjusted by that amount budget with SHIP = $85, budget without SHIP = $82,610

19 Student Budget and SHIP, Pt 2 Insurance Appeal: Students paying out of pocket for other insurance may appeal to account for these expenses. Students must provide documentation of the following: Out of pocket insurance cost and Proof that the student is the primary insured. NOTE: Students covered under their parents family plans are NOT eligible for this adjustment Any allowance/adjustment will be capped at the current SHIP rate.

20 Worksheet for Single Student Contribution Total Summer Gross Earnings (highest 12 weeks) $ Less Estimated Federal Tax (owed, not withheld) $ Less Estimated State Tax (owed, not withheld) $ Less FICA (7.65% of Gross Earnings) $ Less $7,600 HLS Summer Living Allowance - $ Equals Earnings minus Allowances = $ Times 90% $ Equals Estimated SC from Income = $ Plus 33% of Assets + $ Equals Total Estimated SC $

21 Online Summer Income Calculator sfs/calculators/sccalculator/ *Note: this calculator will be conservative in projecting your SC from income because it hasn t been updated yet.

22 Examples of the SC Calculation: Assumptions The examples assume the following: Single student, no children Working in Massachusetts No SC from Assets An assessed PC of $10,000 (for all but Ex 4)

23 Examples of the SC Calculation: Assumptions, Pt 2 The examples also assume: Student has not waived SHIP For grant recipients who do waive SHIP, the HLS grant amount is decreased by the amount of the billed insurance, leading to an effective $0 change in the grant (i.e., lower termbill means a lower grant).

24 Example 1: Single Student: Small Private Firm Job Gross Income $18,000 G E =COA ( BL+PC+SC) Federal $ 785 COA $85,000 State Tax $ 720 BL $45,000 FICA $ 1,377 PC $10,000 SLA $ 7,600 SC $ 6,770 Available Income = $ 7,518 Grant = $23,230 X 90% = $ 6,770 (rounded) SC = $6, % of assets

25 Example 2: Single Student: Public Interest Job Gross Income $ 5,000 G E =COA ( BL+PC+SC) Federal $ 0 COA $85,000 State Tax $ 200 BL $45,000 FICA $ 383 PC $10,000 SLA $ 7,600 SC $ 0 Available Income = $ 0 Grant = $30,000 SC = $0 + 33% of assets

26 Example 3: Single Student: Job at a Large Firm Gross Income $36,000 G E =COA ( BL+PC+SC) Federal $ 3,424 COA $85,000 State Tax $ 1,440 BL $45,000 FICA $ 2,754 PC $10,000 SLA $ 7,600 SC $18,700 Available Income = $20,782 Grant = $11,300 X 90% = $18,700 (rounded) SC = $18, % of assets

27 Example 4: Single Student: Public Interest, High PC Gross Income $ 5,000 G E =COA ( BL+PC+SC) Federal $ 0 COA $85,000 State Tax $ 200 BL $45,000 FICA $ 383 PC $42,000 SLA $ 7,600 SC $ 0 Available Income = $ 0 Grant = $ 0 SC = $0 + 33% of assets

28 Married Student Considerations Spousal Employment: Unless caring for child dependents, spouses are assumed to be employed. If spouse is not employed, the HLS student is treated as single and a portion of the reported joint assets are protected for the spouse. Financial aid is not increased to cover your spouse s living expenses.

29 Married Student Considerations, Pt 2 Standard Allowances: Spouse s Living Allowance Working Spouse Income Allowance Spousal Education Loan Allowance Child Care Allowance Monthly Auto Allowance (only if there are resident dependent children)

30 Married Student Considerations, Pt 3 Spouse is FT Student: An HLS student married to a full-time student is considered Single for financial aid purposes. Preliminary Offers: Preliminary aid offers are based on estimated expenses (child care, insurance, etc.) reported by the students at the time of application. If the actual expenses are lower, then the allowances will be adjusted accordingly. This can have a significant impact on the finalized award package.

31 Married Student Considerations, Pt 4 Spouse Paying Insurance: If you waive SHIP because you re covered by your spouse s insurance, we can make an allowance for that amount with documentation. Allowance amount is capped at the SHIP amount. Documentation of Insurance: to get this allowance, make sure to highlight the amount on your spouse s paystub and indicate the frequency of the deduction (monthly, bi-weekly, semi-monthly, weekly).

32 Married Student Considerations, Pt 5 HLS Grants Capped at Tuition: For married students with children, we cap the grant at your current tuition. The rest of the need is met with HLS Loan. Standard tuition for is $57,200

33 Married Student Example 1: Large Firm Job, Non-Working Sp w/1 2YO Child Gross Income $36,000 G E =COA ( BL+PC+SC) Federal $ 1,175 COA $92,460 State Tax $ 1,440 BL $45,000 FICA $ 2,754 PC $10,000 SLA $ 7,600 SC $ 0 SP + Child LA $21,600 Grant = $37,460 UHS + SHIP $ 8,340 Available Income = $- 7,460 (rounded) SC from income = $0

34 Married Student Example 2: SPIF Job, Non-Working Sp, 1 Child (2YO) Gross Income $ 5,000 G E =COA ( BL+PC+SC) Federal $ 0 COA $118,200 State Tax $ 200 BL $ 45,000 FICA $ 383 PC $ 10,000 SLA $ 7,600 SC $ 0 SP + Child LA $21,600 Grant = $ 57,200 (capped) UHS + SHIP $ 8,340 HLS Loan = $6,000 Available Income = $-33,200 (rounded) SC from income = $0

35 Married Student Example 3: SPIF Job, Sp earns $47K/yr, no Deps Gross Income $52,000 G E =COA ( BL+PC+SC) Federal $ 3,848 COA $85,000 State Tax $ 2,080 BL $45,000 FICA $ 3,979 PC $10,000 SLA $ 7,600 SC $ 0 SP Living Allow $14,400 Grant = $24,880 WSIA $14,400 UHS + SHIP $ 0 Available Income = $ 5,693 X 90% = $ 5,120 (rounded) SC from income = $5,120

36 PC-Related Considerations: Sibling Enrollment We now verify all reported sibling enrollments for the following: Enrolled at least Half-Time, and Enrolled in a degree-granting program, For grant recipients, this can have a significant impact on grant eligibility because each sibling enrolled lowers the assessed Parent Contribution (PC) and increases grant eligibility.

37 PC-Related Considerations: Impact of Sibling Enrollment 0 Sibs in Sch (PC 1) 1 Sib in Sch (PC 2) - PC $30,000 - PC $15,000 - SC $10,000 - SC $10,000 Grant = $ 0 Grant = $15,000 2 Sibs in Sch (PC 3) 3 Sibs in Sch (PC 4) - PC - SC $10,000 $10,000 - PC - SC $ 8,000 $10,000 Grant = $20,000 Grant = $22,000 Assumes: Raw PC = $30,000, SC = $10,000, & SibEnroll is at least ½ time for the full year

38 Your Student Contribution and LIPP-Eligible Borrowing Borrowing to replace your PC is LIPP-eligible BUT Borrowing to replace your SC is not LIPP-eligible You can find your annual LIPP-eligible borrowing limit online at MyHLS Financial Aid

39 Thank You for Attending Financial Aid Contact Information Main Office: or LIPP If you have questions about LIPP eligibility, contact the LIPP staff in Student Financial Services at or Visit