Prepaid	Tuition	Plans
Prepaid	tuition	plans	are	not	considered	OFA.	Instead,	they	are	treated	the	same	as	Coverdell	education	and	529	savings
accounts.	For	more	detail	see	the	discussion	of	qualified	education	benefits	or	education	savings	accounts	under	the
heading	<Student	Assets	(22)=	in	the	
Application	and	Verification	Guide,	Chapter	2.
OFA	Provided	by	a	State
If	the	assistance	provided	by	a	state	is	not	considered	
Title	IV	assistance	and	is	designated	by	the	state	to	offset	a	specific
component	of	the	student9s	COA,	the	amount	of	that	assistance	may	be	excluded	from	both	COA	and	OFA.	You	may
exclude	such	assistance	on	a	student-by-student	basis,	but	if	it	is	excluded,	it	must	be	excluded	for	both	COA	and	OFA.	If
the	amount	excluded	is	less	than	the	allowance	provided	in	the	student9s	COA,	you	must	exclude	the	lesser	amount.
Counting	Need-Based	Earnings	as	OFA
For	students	who	have	jobs,	only	net	earnings	from	need-based	employment	are	considered	OFA.	<Need-	based
employment=	means	employment	that	is	awarded	by	the	school	itself	or	by	another	organization	to	a	student	based	on
financial	need	to	meet	educational	expenses	for	the	award	year.
A	Federal	Work-Study	job	is	clearly	a	form	of	need-based	student	aid.	Employment	with	a	state	is	considered	OFA	if	that
employment	is	based	on	the	student9s	financial	need	for	assistance	to	pay	for	educational	expenses.
Non-need-based	earnings	are	not	to	be	considered	as	OFA	for	the	current	award	year	because	they	will	be	reported	as
income	on	the	FAFSA	form	for	a	subsequent	award	year	and	will	be	used	in	calculating	the	future	SAI.	An	example	of	non-
need-based	employment	would	be	a	student's	job	with	a	private	employer	such	as	a	local	grocery	store.	Another	example
would	be	a	job	cleaning	the	labs	in	the	chemistry	department	on	campus,	if	the	chemistry	department	hired	the	student
using	non-need-based	criteria	and	funds.
Exclusion	of	Emergency	Financial	Assistance	From	OFA
Under	the	
FAFSA	Simplification	Act,	emergency	financial	assistance	provided	to	a	student	is	excluded	from	OFA	when
awarding	Title	IV	funds.	For	this	purpose,	emergency	financial	assistance	includes	any	grant	or	loan	aid	(whether
institutional	funds	or	aid	from	some	other	non-Title	IV	source)	paid	to	a	student	for	unexpected	expenses,	if	those
expenses	are	associated	with	one	of	the	allowable	COA	components	as	described	in	Chapter	2	of	this	volume.	This	could
include,	for	example,	unexpected	expenses	for	food;	housing;	course	materials	or	equipment;	or	transportation	(for
instance,	transportation	between	campus	and	home	for	a	death	or	family	emergency),	since	those	expense	categories	are
allowable	COA	components.	The	school	is	responsible	for	determining	whether	an	unexpected	expense	is	associated	with
a	COA	component.	In	addition,	the	expenses	must	not	already	be	included	in	one	of	the	student9s	COA	components.	Note
also	that	the	determination	as	to	whether	emergency	financial	assistance	is	warranted	is	made	by	the	school	based	on	an
individual	student9s	circumstances	and	need	not	be	tied	to	a	state	or	federal	declaration	of	a	disaster	or	emergency.
Before	providing	aid	to	a	student	who	has	requested	emergency	financial	assistance,	a	school	must	document	the
request,	including	the	unexpected	expense	that	prompted	the	request,	and	should	retain	the	documentation	in	the
student9s	file	for	the	normal	record	retention	period	(see	Volume	2,	Chapter	7	for	information	on	record	retention
requirements).
Treatment	of	NIL	compensation	in	awarding	Title	IV	assistance:	GEN-21-08
Exclusion	of	State-Provided	Assistance
HEA	Sec.	480(j)
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