Policy for Charging Tuition Remission and Graduate Student Compensation

Policy for Charging Tuition Remission and Graduate Student Compensation

Abstract:
These guidelines outline UAB's approach for charging tuition remission and other graduate student compensation for students who work on and are supported by institutional or sponsored projects.
Effective Date:
6/22/2012
Responsible Party:
Contacts:
None Assigned
Administrative Category:
Applies To:
Faculty, Staff, Students
Keyword(s):
None Assigned
Material Original Source:

Policy for Charging Tuition Remission and Graduate Student Compensation
 
This document defines University of Alabama at Birmingham (UAB) guidelines for charging tuition remission and other graduate student compensation for students who work on and are supported by institutional or sponsored projects.
 
Policy Statement
  
Graduate students at UAB receive educational assistance (e.g., scholarships and fellowships) to further their academic studies and compensation for teaching or research services they provide to UAB.  Educational assistance is not conditioned on the graduate student’s providing any service to UAB, may not be charged to National Institutes of Health (NIH) research grants, and may be charged to other types of federal projects only when the purpose of the project is training, and then only with federal agency approval.  In contrast, graduate student compensation provided as, or in lieu of, wages may be charged to federally sponsored projects, provided that certain conditions set forth in OMB Circular A-21 are met and, to the extent applicable, guidelines of the funding agency are followed.  It is therefore the policy of UAB to distinguish graduate student compensation costs from educational assistance and to ensure that graduate student compensation costs are appropriately charged to institutional or sponsored projects.
 
Guideline Implementation
 
A.  Tuition Remission as a Direct Charge to Institutional or Sponsored Projects
  1. Consistent with UAB policy, graduate students who are appointed to the Graduate Research Assistant category and funded by either institutional or external sponsors are eligible for graduate student compensation, including tuition remission costs.  Other categories of graduate student appointments (e.g., Graduate Teaching Assistants and Graduate Assistants) may also be eligible for tuition remission costs only in accordance with UAB policy. 
  2. Institutional and sponsored projects that support a Graduate Research Assistant’s compensation may also fund a portion of the student’s tuition, subject to the exceptions specified below.  This portion of tuition, referred to as tuition remission, will be a percentage of current UAB in-state tuition rates each term.  Graduate Research Assistants are eligible for, at most, tuition remission that is commensurate with their effort.
     
    Exceptions may occur only in the following cases:
    a.  when sponsors have a written policy that prohibits or limits the charging of tuition as a direct cost to a sponsored project, or
     
    b.  when the PI, department chair, and/or dean deem an exception appropriate after review of specific circumstances involved. Grants and Contracts Accounting will review these exceptions as part of normal business monitoring.  
    When exceptions are authorized, the uncharged portion of tuition remission generally should be treated as cost-sharing.  If cost-sharing is required as a condition of a project, tuition remission may be used to meet these cost-sharing requirements, subject to any necessary sponsor approval.
  3. Tuition remission will be directly charged to the institutional or sponsored project fund supporting the student’s compensation.  If the student works on one or more sponsored projects for an entire term or a portion of a term, the tuition remission charge must be proportional to the student’s effort and prorated appropriately.
  4. In accordance with UAB’s Negotiated Indirect Cost Rate Agreement with the federal government, tuition remission costs paid directly by federal sponsors do not bear indirect costs. However, indirect costs may be applied to the student’s stipend (salary) charged to a federal award.  Therefore, the stipend component of the student’s compensation should appear in the personnel (salary and wages) section of a proposed budget, whereas the tuition remission component should be listed in a separate line item and excluded from Modified Total Direct Costs (MTDC) that bear indirect costs.
 
B.  Tuition Remission Allowability
 
OMB Circular A-21, Section J.45 provides that tuition remission and other forms of graduate student compensation paid as or in lieu of wages are allowable costs to federal research projects, provided that the following conditions are satisfied:
 
  • The graduate student is performing activities necessary to the project;
  • The graduate student is enrolled in an advanced degree program, and his or her activities on the project are related to that degree program;
  • The compensation is provided in accordance with established institutional policy  and is awarded consistently to students performing similar activities conducted in non-sponsored as well as in sponsored activities; and
  • The charges are in accordance with OMB Circular A-21’s effort reporting (A-21, Sec. J.10) and reasonableness provisions.
In 2001, OMB clarified that tuition remission and other forms of support that satisfy these criteria are allowable, regardless of whether the tuition remission coverage or other form of support qualifies as wages for tax purposes.
 
C.  Funding Agency Guidelines
 
When graduate student compensation is charged to federal awards, UAB must do so in accordance with  funding agency’s guidelines.  Appendices A (NIH), B (NSF), and C (U.S. Department of Education) of this Policy illustrate common graduate student compensation scenarios pursuant to the guidelines of those agencies.  These examples are meant to be illustrative; they are not comprehensive.
 
 
Appendix A
Illustrations of the NIH Guidelines for Graduate Student Compensation
 
The following examples are intended solely as illustrations of some of the more common graduate student compensation scenarios that arise under the NIH guidelines.  Principal Investigators and departmental administrators are encouraged to consult UAB’s Office of Sponsored Programs with specific questions concerning graduate student compensation.
 
Example 1: Graduate student compensation chargeable to NIH awards
 
Actual graduate student compensation                            $38,102
 
 
NRSA zero-level stipend                                                $39,264
 
 
Amount awarded by NIH                                                $35,000
 
 
Standard graduate student compensation rate                 $38,102
 
 
First-year post-doctoral scientist rate (current est. avg.)   $40,000
 
 
Maximum chargeable rate                                               $38,102
 
 
Graduate student compensation in Example 1 is based on the Graduate School recommended maximum stipend level of $27,000, tuition/fees for 27 credit hours at the estimated FY13 JHS rate, and single-coverage student health insurance at $1,702.   In this case, following an award, UAB could rebudget $3,102 from another budget category to support the graduate student’s actual compensation rate of $38,102 and could charge that full amount to the award. 
 
 
Example 2: Graduate student compensation chargeable to NIH awards
 
Actual graduate student compensation                              $41,045
 
 
NRSA zero-level stipend                                                   $39,264
 
 
Amount awarded by NIH                                                   $35,000
 
 
Standard graduate student compensation rate                    $41,045
 
 
First-year post-doctoral scientist rate (current est. avg.)      $40,000
 
 
Maximum chargeable rate                                                  $40,000
 
Graduate student compensation in Example 2 is based on the Graduate School recommended maximum stipend level of $27,000, tuition/fees for 27 credit hours at the estimated FY13 SHP rate, and single-coverage student health insurance at $1,702.  In this case, UAB’s standard first-year post-doctoral scientist rate is the ceiling.  UAB would be permitted to rebudget $5,000 away from another budget category to provide further support for the graduate student’s compensation, but UAB could not charge the grant at a rate in excess of the $40,000 first-year post-doc rate. 
 
 
Example 3: Overall NIH budget
 
Salaries  
 
     Dr. A. Smith, PI                                                           $25,000
 
 
 
     Ms. B. Jones, Graduate student (GRA)                         $27,000
 
 
Fringe - 31% (not including students)  
     Dr. A. Smith                                                                  $7,750
 
 
     Ms. B. Jones                                                                      $0
 
 
Materials & Supplies                                                           $2,000
 
 
Equipment                                                                                $0
 
 
Travel  
     Domestic                                                                       $3,000
 
 
     International                                                                          $0
 
 
Consultants                                                                                $0
 
 
Subcontract                                                                               $0
 
 
Publications                                                                         $3,000
 
 
Tuition for B. Jones                                                            $11,102
 
 
Total Direct Costs                                                              $78,852
 
 
F&A Indirect Costs (applied to MTDC)                                 $31,504
 
 
TOTAL GRANT                                                                $110,356
 
 
 
 
Appendix B
Illustration of NSF Guidelines for Graduate Student Compensation
 
The following example is intended solely as an illustration of graduate student compensation scenarios that may arise under the NSF guidelines.  Principal Investigators and departmental administrators are encouraged to consult UAB’s Office of Sponsored Programs with specific questions concerning graduate student compensation.
 
 
Example
 
The following example is intended solely as an illustration of graduate student compensation scenarios that may arise under the NSF guidelines.  Principal Investigators and departmental administrators are encouraged to consult UAB’s Office of Sponsored Programs with specific questions concerning graduate student compensation.
 
Salaries 
     Dr. A. Smith, PI - 1 summer month                                     $6,250
 
 
     Dr. A. Smith, 25% academic year                                     $18,750
 
 
     Ms. B. Jones, Graduate student (GRA)                             $28,000
 
 
Fringe 
     Dr. Smith                                                                           $7,750
 
 
     Ms. Jones                                                                                $0
 
 
Materials & Supplies                                                                $1,500
 
 
Equipment                                                                             $25,000
 
 
Travel 
     Domestic                                                                            $3,000
 
 
     International                                                                              $0
 
 
Consultants                                                                                    $0
 
 
Subcontract                                                                                   $0
 
 
Publications                                                                             $3,000
 
 
Tuition                                                                                   $11,844
 
 
Total Direct Costs                                                                $105,094
 
 
F&A Indirect Costs (applied to MTDC)                                     $43,661
 
 
TOTAL GRANT                                                                    $148,455
 
 
 
 
Appendix C
Illustration of U.S. Department of Education Guidelines for Graduate Student Compensation
 
The following examples are intended solely as illustrations of graduate student compensation scenarios that may arise under US Department of Education guidelines. Principal Investigators and departmental administrators are encouraged to consult UAB’s Office of Sponsored Programs with specific questions concerning graduate student compensation.
 
 
Example 1 – Student stipends (no service requirement); more common with scholarship-type grant [See comment above.]
 
The following examples are intended solely as illustrations of graduate student compensation scenarios that may arise under US Department of Education guidelines. Principal Investigators and departmental administrators are encouraged to consult UAB’s Office of Sponsored Programs with specific questions concerning graduate student compensation.
 
Student Stipends                                                                      $60,000
 
 
Institutional Payment                                                                 $30,000
 
 
Total Direct Costs                                                                     $90,000
 
 
F&A Indirect Costs                                                                            $0
 
 
TOTAL GRANT                                                                        $90,000
 
 
 
 
Example 2 – Student salary (service required as research assistant); more common with research grant
 
 
 
Personnel   
     Dr. X, PI, 20% effort                                                             $18,000
 
 
     Student Y, Research Assistant                                               $25,000
 
 
Fringe Benefits  
     Dr. X                                                                                       $5,580
 
 
Travel                                                                                           $2,000
 
 
Equipment                                                                                           $0
 
 
Supplies                                                                                        $1,500
 
 
Contractual                                                                                          $0
 
 
Construction                                                                                         $0
 
 
Other                                                                                            $1,000
 
 
Total Direct Costs                                                                        $53,080
 
 
F&A Indirect Costs (applied to MTDC)                                           $23,356
 
 
Training Stipend (for Student Y - tuition)                                       $11,844
 
 
TOTAL GRANT                                                                            $88,279
 
 
  
 
Graduate Student Classification Categories/Job Definitions 
  1. Graduate Teaching Assistant (GTA): activities include, but are not limited to, duties primarily in support of instruction and educational functions (e.g. teaching classes, leading discussion groups, preparing curriculum, and grading exams).
  2. Graduate Assistant (GA): activities include, but are not limited to, duties primarily in support of administrative functions (e.g. performing clerical functions, maintaining webpages, supervising computer labs, and drafting non-research materials).
  3. Graduate Research Assistant (GRA):  activities include, but are not limited to, duties primarily in support of fundamental and applied research (e.g. conducting experiments, analyzing data, and drafting research publications for professional journals or conferences).  
 
Potential FAQ’s under new classifications:
 
1. How should my department’s graduate students be classified when they work in a departmental office during terms that they are working on their own research for academic credit?
 
These students should be classified as Graduate Assistants.
 
2. My department’s graduate students are required to work for pay in their faculty mentor’s research laboratory.  How should they be classified?

These students should be classified as Graduate Research Assistants.

3. If a faculty member’s research is not externally funded, does it change the student’s classification? 

No. Students are classified based on their activities, not funding source. 
 
4. Is it possible for a graduate student to have two classifications simultaneously?

Yes. It is possible for a student to have two assignments with different classifications, provided that the student’s FTE on each assignment reflects the appropriate effort for that classification.  If, for example, a student spends one half of his/her effort as a Graduate Research Assistant and one half of his/her effort as a Graduate Teaching Assistant, then that student would be classified as 0.25 FTE GRA and 0.25 FTE GTA.  Neither Graduate Research Assistants nor Graduate Teaching Assistants should have bi-weekly assignments.

5. If a graduate student’s responsibilities are changed during the course of an academic year, can he/she be moved to another classification?

Yes. If a graduate student’s activities change, his/her classification may be changed, effective the beginning of the next academic term. For example, a student who is a GTA during fall term could be classified as a GRA for the spring term if that classification is more appropriate based on his/her responsibilities.