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  • 1.  Student Emergency Fund - payments made to students affect their aid eligibility?

    Posted 02-11-2026 11:16 AM

    We have a donor funded Student Emergencies fund and a committee that reviews and makes awards to students for things like housing, medical, and food type emergencies. Our financial aid office claims that the money received by the student will impact their financial aid eligibility. A $100.00 award is less of an issue than a $1,000 or $5,000 award. 

    How are other universities handling this type of award? We want to do good and help our students that are experiencing a temporary financial crisis without hurting their financial situation and future aid eligibility. Also, if it makes a difference, we are a private university, not government funded.

    TIA for your input!

    Jean C.



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    Jean Camber
    Regis University
    jcamber@regis.edu
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  • 2.  RE: Student Emergency Fund - payments made to students affect their aid eligibility?

    Posted 02-11-2026 01:35 PM
    Hi Jean,

    The IRS does not require students to report emergency financial grants as gross income on their tax return or their FAFSA. This is part of the update from the FAFSA simplifciation act that excludes emergency financial assistance. The long document is here: https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2023-08-04/fafsa-simplification-act-changes-implementation-2024-25

    The quote is  

    The new definition of items excluded from consideration as other financial assistance now includes the following two forms of assistance:

    • Foster care benefits received under Title IV, Part E, of the Social Security Act, including education and training vouchers and room and board that youth are receiving as extended foster care benefits under Section 477 of that act

    • Emergency financial assistance provided to the student for unexpected expenses that are a component of the student's COA, and not otherwise considered when determining the student's need



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    Sage70, Inc.
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  • 3.  RE: Student Emergency Fund - payments made to students affect their aid eligibility?

    Posted 02-12-2026 09:53 AM

    Emergency funding to students is a tricky issue. On our campus, all student aid, including emergency funding, is delivered to students via there student accounts on campus.  My understanding is that while the funding does not affect a student's taxable income, it can affect their financial aid profile at the institution since it will be included in their total student aid at the institution.  Any funding received can affect their eligibility for student loans and other need-based funding.  When setting up such donor established emergency accounts/funds, we ask that the campus partner who administers the funds make contact with the financial aid office at the time the award is made to determine what affect, if any, the emergency funding will have on the student recipient's financial aid profile so there are no surprises for the recipient. 

     

    Nancy

     

    Nancy Randazzo

    Director, Gift and Fund Administration

    University of Montana Foundation 

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    Original Message


  • 4.  RE: Student Emergency Fund - payments made to students affect their aid eligibility?

    Posted 02-12-2026 10:31 AM
    Nancy Randazzo would like to recall the message, "Re: Student Emergency Fund - payments made to students affect their aid eligibility".


    Original Message


  • 5.  RE: Student Emergency Fund - payments made to students affect their aid eligibility?

    Posted 02-12-2026 09:55 AM

    I was on such a committee at my previous (private) institution, and that committee included a representative from Financial Aid, who was the one ultimately responsible for initiating the disbursal of funds. Having Financial Aid on the committee gave us insight into whether the student had reached out to Financial Aid first, as they were instructed to do, and whether the student had loan money available to withdraw or whether Financial Aid could increase their loan availability based on the specific emergency situation. Most of the students who applied for emergency funds, we discovered, were just trying to avoid withdrawing additional loan funds that were already available to them; and a key principle of the emergency fund was that avoiding additional loans did not constitute an emergency.



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    Russel Heskin
    University of La Verne
    rheskin@laverne.edu
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