A fellowship that is given to a student to assist with academic or living costs is considered financial aid. If a student has already received financial aid based upon the Free Application for Federal Student Aid (FAFSA), the fellowship must fit into the financial aid package, which may result in other aid being reduced or removed.
Most fellowships are granted to assist with the same costs that are covered by financial aid, such as tuition and fees, books and supplies, and living expenses. Since a student may not receive assistance in excess of the budget for these costs, a fellowship may trigger a revision of the financial aid.
A fellowship granted for other expenses such as conference attendance may be accommodated by a budget increase to cover the additional costs. A budget increase may also be requested if the average costs used in the student's budget do not reflect the student's actual costs.
The student must request a budget increase from the Student Financial Aid Office and may be asked to supply documentation of the additional expenses.
How does a stipend affect federal aid?
There are two types of stipends. How a stipend affects aid depends upon the type of stipend.
Stipends given to students without a requirement of work in kind are considered financial aid. They affect financial aid in the same way as a fellowship (see above). These stipends are reported on a 1098-T statement at the end of the year as financial assistance.
Stipends paid to a student in return for work performed for the university are not considered financial aid. These are wages and are reported on a W-2 statement at the end of the year as income. These stipends are reported on the tax return and on the next year's FAFSA. This may affect the student's financial need and award eligibility for the following aid year.
How does a graduate assistantship affect federal aid?
A graduate assistantship is employment with the university to perform some service (teaching, research, or service) in exchange for wages and benefits.
Assistantships may include both stipends and tuition waivers. Stipends are not considered aid in this case because they are for work performed (see above). Tuition waivers are considered a form of financial aid, since graduate student budgets include aid for the purpose of paying tuition. Graduate Assistants receiving tuition waivers will have their federal financial aid adjusted to reflect this financial assistance.
A student who receives additional financial assistance late in the processing cycle may already have a full financial aid award. If additional costs do not exist (see budget increase information under Fellowships above), the financial aid awards will be reduced and the student may be required to repay some aid already received.