Changes to Training Grant Student Payments FAQs

How are training grants, stipends, and financial aid defined?
  • A training grant is an agreement that provides a coordinated training program for students, postdoctoral researchers, staff, teachers and/or faculty who are selected by the institution to be a part of the training program. Payments provided to trainees from training grants are intended to defray living and/or training related expenses while the trainee participates in the training program.
  • A stipend from a training grant is a payment that is made to an individual to support a training/learning experience. Stipends are frequently in the form of a “living allowance” and are intended to offset living expenses. Stipends are not compensation for work performed and there are no effort reporting requirements related to receiving a stipend payment.
  • Financial aid includes all monies paid to support students *unless* payments are to compensate for work performed or reimbursement of travel performed on behalf of the University. In other words, any travel, research, or other activities that are primarily for the benefit of the student and their education (including training grants) are considered financial aid for reporting purposes.  The Office of Scholarships and Student Aid administers federal and state aid for the University. All non-compensation funding must be counted to determine the student’s aid eligibility.
Why is the University changing how it administers payments to students?

The University took a comprehensive look at how student financial aid payments are made and this change will ensure we remain compliant with state and federal regulations. Any travel, research or other activities that are primarily for the benefit of the student and their education, including training grants, are considered financial aid. These payments are required to be coordinated with other aid received to ensure that total resources from University and external sources do not exceed student need when the student is receiving any state or federal support and that all are reported correctly to the UNC System Office and other agencies, as appropriate.

GradStar is the University’s reporting system for all non-service fellowships, tuition, and fee awards given to a student. Implementing a change to pay students from this system is appropriate and necessary to accurately report financial aid payments. Additionally, the project team identified that this change aligns with how other Universities administer student payments on training grants.

Is this change primarily an administrative one to save money for the University?

No. None of these changes were made for cost savings. The change is being implemented to address compliance and accuracy in reporting student aid and ensures the University can continue to administer federal aid. Any administrative and procedural enhancements are secondary to compliance and reporting accuracy.

Why do payments made from a T-series grant to a graduate student count as financial aid, but payroll made to a student from a faculty’s research grant (done via payroll) does not?

Students paid through payroll are being compensated for work performed.

Trainee payments from training grants are not considered compensation for work performed but are defined as funding primarily for the benefit of the trainee and their education (no effort reporting).

Why are payments from T-series grants considered to be the same as a fellowship made to a student, such as an NIH-NSRA/HHMI/NSF?

The nature of the payment, not the sponsor, controls whether the payment is a stipend or compensation. If the payment is compensation for work performed, the payment is not a stipend – it is compensation. If the payment is specified to help defray living expenses, or a similar description, it can be classified as a stipend.

Why can postdocs appointed to a T-series training grant have their stipends routed through payroll, but graduate students cannot?

Payroll can only manage FICA exemptions and other fringe benefits associated with compensation. As noted above, support for graduate student trainees is classified as financial aid so cannot be administered through payroll.

What should a student do if they think their financial aid will be impacted by this change?

Students should contact the Office of Scholarship and Student Aid if they have questions about their financial aid package and how funding they accept from University sources may impact their aid eligibility.

What are the tax liabilities to the student associated with payments distributed via GradStar?

Payments processed from GradStar will be reported on a 1098-T. Form 1098-T is an informational tax document to aid taxpayers in determining whether they are eligible to claim a tax deduction or one of the education tax credits on their federal income tax return. More information can be found on the Cashier’s Office website.

Payments processed by Accounts Payable campus vouchers were reported as compensation, either on a 1099-M or to payroll to be included on the W-2.

In the future, will it be possible to program GradStar to distribute payments monthly instead of only per semester?

At this point, it is not possible to distribute monthly payments, but the project team will revisit periodically to see if a change can be made. While we recognize that this means students will need to budget the funds over the course of the term, they will in fact receive more money earlier so should not be disadvantaged.

How do I decide which method to use to pay my students on training grants?

Please reference the matrix on “Understanding the Types of Award Payments.”