Using Your Funds

Qualified Withdrawals

To withdraw award funds, students must complete a Qualified Withdrawal Form indicating the amount of the qualified higher education expenses to be paid to the eligible educational institution the student is attending. Allow 3-4 weeks for processing.

Students are NOT required to submit receipts, bills or other substantiation of qualified higher education expenses along with the Qualified Withdrawal Form. However, when signing the Qualified Withdrawal Form, the student certifies that the Qualified Withdrawal request is for qualified higher education expenses (see description below) at an eligible educational institution. Note that if you provide a specific amount on your Qualified Withdrawal Form and your remaining balance will be $100 or less, a check for the entire balance will be mailed to the eligible educational institution you indicate and your account will be closed.

Rules

  • The student must have qualified higher education expenses at an eligible educational institution. To determine if an institution is considered an eligible educational institution, students should contact the school or enter the name and location of the school on the Free Application for Federal Student Aid (FAFSA) website. If the institution you search for has a Federal School Code on this web page, then it is eligible.
  • The Governor's Scholarship Programs sends the withdrawal amount directly to the eligible educational institution
  • The award cannot be withdrawn by the student for any purpose other than for the payment of qualified higher education expenses.
  • The award is non-transferable.
  • Any portion of a scholarship award used to pay for qualified higher education expenses at correspondence schools may not be eligible for federal tax-exempt treatment.

Qualified Higher Education Expenses

  • Tuition and fees,
  • Costs of books, supplies and equipment required for the enrollment or attendance of the student at an eligible educational institution, and
  • Certain amounts for room and board.*

*Section 529 of the Internal Revenue Code requires that withdrawals for room and board costs do not exceed certain limits. You must be enrolled in a certificate granting program at least half-time. For students living at home with parents, as well as for students not living in campus-provided housing, the student's eligible educational institution's "cost of attendance" allowance for federal financial aid programs will be the room and board amount treated as a qualified expense. For students living on campus, the amount of room and board treated as a qualified expense can be the actual amount charged to the student, even if it is greater than the "cost of attendance" allowance.

Any portion of the awards or earnings used as payment of room and board costs will be subject to federal income tax in the tax year it was withdrawn. California law provides that these scholarship awards, including the earnings, are exempt from California income tax. You must report such amounts to the Internal Revenue Service when filing your tax return. Similarly, any portion of a scholarship award used to pay for qualified higher education expenses at correspondence schools may not be eligible for federal tax-exempt treatment.

Refunds of Withdrawn Funds

Refund of Qualified Withdrawals to the Governorís Scholarship Programs
If the student (or anyone else on the student's behalf) receives a refund of any part of the qualified withdrawal from the eligible educational institution that is not immediately used by the student for qualified higher education expenses, the student must notify the Governor's Scholarship Programs in writing in the tax year in which the refund was received. The student must return the amount of the refund not used for qualified higher education expenses to the Governor's Scholarship Programs.

All refunds of qualified withdrawals shall include the student's full name and scholarship account number and be returned to the Governorís Scholarship Programs at:

Governorís Scholarship Programs
P.O. Box 8227
Boston, MA 02266-8227

The Governorís Scholarship Programs will deposit any returned refund into the Student's Scholarship Account.

Refund Due to Forfeiture of Funds
If a refund from an eligible educational institution to the student or to the Student's Scholarship Account results from a forfeiture determination, the returned or refunded amounts will be deposited into the State's Forfeiture Account.