How Financial Aids, Gifts, Grants, Scholarships, and Fellowships Are Treated for SSI Disability

Social Security will ignore financial aid, scholarships, and grants when assessing your eligibility for SSI.

By , Contributing Author
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If you get financial aid, grants, or gifts to go to college or vocational school, you may be able to exclude the money from your countable resources (assets) for SSI purposes. (To be eligible for Supplemental Security Income (SSI), you must meet the Social Security Administration's (SSA) definition of disabled and you must meet certain income and asset guidelines.) First, here's a quick primer on the SSA's resource and income limits.

Income and Resource Limits

If you are single, you can have up to $2,000 in assets and still be able to get SSI. Some things, like your primary home and the main car you drive, aren't considered when the SSA calculates your assets. You can read more detail about this topic in our article How Much Can I Have in Assets and Still Be Eligible for Disability Benefits?

As to income, the more income you have the less your SSI payment will be, and if you have too much income you can become ineligible for SSI altogether. To learn more about income limits, see our article on Income Limits and SSI Disability Eligibility.

Education-Related Financial Aid

If you get financial aid for school, the SSA may exclude (not count) the financial assistance when it calculates your resources. Depending on the type of aid you receive, you may be eligible for a nine-month exclusion, or the financial assistance may be excluded for an unlimited amount of time (depending on the type of financial aid). Here are some examples of financial aid that is eligible to be excluded:

  • Title IV assistance under the Higher Education Act (HEA)
  • assistance under the Bureau of Indian Affairs (BIA)
  • grants (from the government or private sources)
  • scholarships
  • fellowships, and
  • gifts used to pay for school-related fees.

Title IV and BIA Educational Assistance

The SSA will exclude all financial aid that you get from either Title IV Higher Education Act or BIA assistance when it calculates your income and resources. There is no time limit for how long the SSA will exclude the assistance, no matter how long you keep the funds.

Here are examples of qualifying Title IV HEA or BIA assistance programs:

  • Pell grants
  • State Student Incentives
  • Academic Achievement Incentive Scholarships
  • Byrd Scholars
  • Federal Supplemental Educational Opportunities Grants (FSEOG)
  • Federal Educational Loans (like Federal PLUS Loans, Perkins Loans, Stafford Loans, Ford Loans)
  • Upward Bound
  • Gear Up (Gaining Early Awareness and Readiness for Undergraduate Programs)
  • LEAP (Leveraging Educational Assistance Partnership).
  • SLEAP (Special Leveraging Educational Assistance Partnership), and
  • Work-Study Programs.

Use of Funds

It doesn't matter how you spend the money you receive from this type of financial aid.

Interest or Dividends From These Loans

If you don't spend all the money from your Title IV or BIA educational assistance and you earn either interest or are paid dividends from them, the SSA will also exclude the interest and dividends when it calculates your income and resources.

Scholarships, Grants, Fellowships, and Gifts

Any other financial assistance (other than those discussed in the section above) used to pay school-related fees will be disregarded from your resources calculation for a period of nine months, beginning with the month after you receive the money. This includes gifts of money, grants, scholarships, and fellowships.


In order to qualify as an educational gift, the money must be given to you without any expectation that it will be paid back. It also can't be given to you based on some legal obligation on the part of the giver—such as part of a child support order. Also, the giver must give up complete control of the money. When a parent pays for college, it counts as a gift.

Grants, Scholarships, and Fellowships

Grants, scholarships, and fellowships can be paid by nonprofit organizations, federal, state, or local governments, or private businesses or individuals and are intended to help you further your training or education through activities like scholastics or research work.

Use of Funds

Gift, grant, and scholarship money must be used to pay tuition or school-related fees to be excluded. School-related fees include:

  • lab fees
  • fees for student activities
  • transportation costs
  • supplies like paper, pens, and notebooks
  • technology fees
  • textbooks, and
  • any impairment-related expenses needed for you to go to school (for example, if you need specialized transportation because you can't drive or take a public bus).

If you use any of the grant, scholarship, or gift money for expenses other than necessary educational-related expenses or you don't intend to use it to pay for necessary educational-related expenses, the money will be counted as income at the earliest of the following:

  • during the month you spend the money, or

  • during the month you don't plan on using the money to pay for necessary education-related expenses.

Even funds set aside for (or already spent) specifically for your food and shelter are not entitled to the nine-month exclusion or any exclusion, and will be counted as a resource.

Interest or Dividends

Any interest or dividends you are paid on the unspent educational grants, scholarships, fellowships or gifts are counted as income.

Funds Leftover at the End of the Nine-Month Exclusion Period

If you have a grant, scholarship, fellowship, or gift money still left at the end of the nine-month exclusion period, it will be counted against you as a resource during the first month after the nine-month exclusion period has ended.

Contact the SSA

Make sure you contact the SSA if you are unsure about how educational financial aid will affect your SSI benefits. This is important because depending on the type and amount of the financial aid, your SSI payments could be stopped or you could lose your eligibility. You can call the SSA at 800-772-1213 or visit your local field office to speak with someone in person.

How SSDI or SSI Benefits Affect Financial Aid Awards

On the flip side of things, you may be wondering how your (or your parents') SSDI or SSI benefits will affect how much money you receive in financial aid from a school or college. Financial aid calculations are based on your (or your parents') adjusted gross income (AGI).

SSI. You don't have to report SSI income on the FAFSA (financial aid application), so SSI benefits should not affect financial aid, Pell grants, or student loans.

SSDI. For SSDI, you are required to count only half of your annual SSDI benefit toward adjusted gross income (and even then, only if half of the Social Security benefits plus your other income is more than $32,000). For example, say your and your spouse's combined annual SSDI income is $44,000. You would count only half of that, or $22,000, toward your joint adjusted gross income. An AGI of $22,000 is probably low enough to still qualify for a Pell Grant, other financial aid, and/or student loans.

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