Loans, including loans from persons who are not legally responsible relatives, are exempt. Loans from legally responsible relatives are treated as contributions and budgeted as nonexempt income. See PM 08-02-06-b for educational loans.
A legally executed document is not required to verify that income is a loan. A statement signed by both parties is enough to verify the income is a loan, if it contains:
- the amount of the loan,
- that the payment is a loan, and
- that repayment is required.