Student Financial Aid and its Impact on Supplemental Security Income (SSI)

By Sara Toor M.A. and Cameron Lindahl M.S. 

​Did you know that an individual who is at least 18 years old and receives Supplemental Security Income (SSI) due to a disability can attend school and continue to receive SSI benefits as a student? This blog will provide a general overview on how SSI benefits are impacted if a student, who is about at least 18 years of age receives financial aid or other assistance to attend school.
Financial Aid
According to the Social Security Administration (SSA), student financial assistance received under Title IV of the higher education Act of 1965 (HEA) or Bureau of Indian Affairs (BIA), are not counted as income and resources. It does not matter how or what the assistance from these two programs are used for. In addition, for these two types of assistance programs there is no time limit for the resource exclusion regardless of how long the assistance is held by the individual.

What about the interest and dividends earned on Title IV of HEA or BIA assistance programs? Any interest and dividends earned on unused assistance under the two assistance programs are excluded from income.

Examples of HEA Title IV Assistance
The Social Security Administration (SSA) provides a list of examples on types of assistance that fall into the category of HEA Title IV Assistance (SI 00830.455B.). Some of these examples include:

  • Pell Grants
  • State Student Incentives
  • Academic Achievement Incentive Scholarships
  • Byrd Scholars
  • Work Study Programs
  • Upward Bound
  • Federal Supplemental Educational Opportunities Grants
  • Federal Education Loans
  • Gear Up
  • LEAP- (Leveraging Educational Assistance Partnership)
  • SLEAP- (Special Leveraging Educational Assistance Partnership)

To learn more visit, https://secure.ssa.gov/poms.nsf/lnx/0500830455.

Financial Assistance Other Than HEA Title IV & BIA
Any amount of assistance from other grants, scholarships, fellowships, or gift amounts that are not under HEA Title IV or BIA are excluded from a student’s income only if they are used for tuition, fees or any other educational expenses for educational institutions (even vocational or technical education) is excluded from income. In addition, any amount that is not used to pay immediate or current tuition, fees, or other educational expenses, but will be used at a future date, is excluded from income in the month of receipt.

However, any amount of grants, scholarships, fellowships or gift amounts, that are not used or set aside to be used for paying fees, tuition, or other needed educational expenses is income in the month received and if kept after the month received, is counted as a resource. Any aid that was intended to be used or set aside to be used in the future for allowed educational expenses and were not used for that purpose will be treated as income in the month the aid was spent on non-educational expenses.

Importance
It is important for students who receive SSI benefits as well as their parents, to understand the impact and rules regarding SSI and any Financial Assistance for educational purposes received. If you or someone you know are unsure about how educational financial assistance will affect SSI benefits, reach out to your local Social Security Administration (SSA) Office. SSI benefits could potentially be stopped and eligibility for SSI benefits could be lost as well if not handled and reported appropriately.

DISCLAIMER: The information provided by CPT Institute is for informational purposes only and is intended to be used as a non-legal guide prior to consultation with an attorney familiar with your specific legal situation. CPT Institute is not engaged in the practice of law or in rendering legal advice or counsel. No such legal advice or counseling is either expressly or impliedly intended. This form is not a substitute for the advice or counsel of an attorney. If you require legal advice, you should seek the services of an attorney. © 2018 CPT Institute All rights reserved.

Resources/Further Reading:
https://secure.ssa.gov/poms.nsf/lnx/0500830455#b
https://www.specialneedsalliance.org/the-voice/ssi-rules-for-students/
https://www.disabilitysecrets.com/resources/social-security-disability/how-financial-aids-gifts-grant