Graduate and professional students often seek out or are provided financial assistance from academic departments. This assistance can come in the form of a scholarship, assistantship or fellowship or may be called a stipend or award.
Ultimately, no matter how it may be termed, all funding to graduate students falls into two broad categories dictating the processing and payment method: scholarship (via the student bill) and compensation (via payroll).
The means (student bill or payroll) for providing funds to a graduate student is determined based on an assessment of service. Compensation for service beyond direct payment of student bill items must be paid via payroll. All other assistance is considered to be based on academic merit or financial need and is classified a scholarship paid via the student bill. Graduate students or academic departments cannot adjust payment method on a student-by-student basis.
The following information is to assist academic departments and graduate students understand the nature of their funding so that all parties know the impact it can have on other aid sources. This information can also assist graduate students make financial plans and not be surprised by after-the-fact adjustments to their federal student loans in order to remain within the budgeted cost of education.
Assistance provided to students to directly pay tuition or other billed fees and money provided by fellowships to aid in the pursuit of studies or research is considered scholarship funding. As such, it is processed by the awarding department onto the financial aid award, and the funds are applied each semester to a student's bill. Funding amounts that exceed the amount due on the bill will be refunded to the graduate student each semester.
Scholarship funds become part of the student financial aid package and can result in lessening eligibility for federal aid programs. Students applying for student loans should review their financial aid award offer. If you are aware of financial assistance that qualifies as scholarship that is not listed on your financial aid award, consult Enrollment Services (firstname.lastname@example.org; 513-556-1000) to fully understand your loan eligibility. You want to avoid having loans changed after you have made plans based on added financial support.
Compensation for Service
If a student will receive support in exchange for services such as teaching, research assistant duties, administrative responsibilities, or other hourly work, the funds are compensation and are paid via the UC Payroll System. As such, the student will be paid bi-weekly, and the appropriate payroll taxes will be withheld.
These funds are not directly a financial aid source so they do not affect student loan eligibility. As well, because these funds do not pay the student's university bill, the student will need to meet billing due dates through personal, financial aid or a combination of resources.
Understanding Payment Method
Academic departments are encouraged to be clear in appointment or award letters to graduate students as to the method of payment. Description of payment method is particularly important when a student is funded by both scholarship and compensation (i.e., tuition scholarship and monthly wage for work in the classroom).
Students who are seeking student loan assistance who do not know the method of payment are encouraged to speak with the awarding department and Enrollment Services to better understand any effect on loan eligibility. Understanding the payment method will also help in knowing how tax-related issues are handled.