Financial aid eligibility and the impact of direct payments to nonminor dependents

Q:  A youth on my caseload was in a Supervised Independent Living Placement (SILP) last year and received his foster care payments directly. He’s now completing financial aid forms for college and isn’t sure whether this income will impact his eligibility for financial aid. What should I tell him?

 A: Financial aid regulations include a specific exemption for foster care payments (Higher Education Act, Section 480(e)(4)). This means that these payments, including those going directly to a Non-Minor Dependent (NMD) in a SILP, do not need to be reported on the Free Application for Federal Student Aid (FAFSA) as income and therefore do not reduce the amount of financial aid for which a NMD is eligible. The U.S. Department of Education is currently preparing written guidance for college financial aid officers on this issue. 

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