Statement of Policies
Student Stipend Policy
This Policy Statement outlines the standard practice for stipend payments to students from academic or other units excluding hourly pay.
At the undergraduate level, except for athletic scholarships which are awarded by the Athletics Department in compliance with NCAA regulations, all scholarships for standard educational costs are awarded by the Financial Aid Office, and eligibility is based on financial need.
To comply with US Department of Education regulations, student payments, awards, prizes, and gifts that are made available to the student because they are a Stanford student, must be reported to the Financial Aid Office. The Financial Aid Office is responsible for the disbursement of stipend funds to undergraduates.
As defined in Admin Guide 10.1.1 Undergraduate Student Employment, a stipend is a payment to an enrolled or continuing student meant to support personal scholarly activities such as an undergraduate research project or experiential learning opportunities such as an unpaid internship. The payment should be intended to help the student defray research costs, living or travel expenses to enable participation in the scholarly activities or experiential learning opportunities. Stipends are not used to pay for services rendered which primarily benefit the faculty member, Stanford University or its programs or as compensation for employment. When a student receives a stipend, including things like a gift card, during a period of enrollment when they are also receiving financial aid and/or athletic aid, their aid may be adjusted to accommodate the stipend.
Awards and Graduation Honors
Stanford students can receive university awards for their academic, research, and writing excellence. See Awards and Graduation Honors for examples of awards administered by VPUE. When cash prizes are awarded, including gift cards, and a condition of the award is student status, the award may impact financial aid and/or athletic aid eligibility in the current or following enrollment period. If the award is considered a prize for a contest open to students and non-students alike, the award is not directly factored into financial aid eligibility. Graduation prizes, for example, do not affect the student’s financial aid eligibility for their final term, however, if the student were to re-enroll in the fall, those funds would be considered a resource available to help with educational expenses.
Stipends, prizes or awards to students who are receiving other forms of financial aid for any purpose are a form of financial assistance and may require one of the following actions to be taken:
- An adjustment to the financial aid award that the student has already received in the current term or may receive in a subsequent term, and /or
- An adjustment to the student’s overall cost of attendance.
The Financial Aid Office has the responsibility to determine whether adjustments are necessary.
Resources that must be counted for financial aid purposes include, but are not limited to:
- Scholarships, including athletic scholarships and scholarships from external sources
- Need-based federal and state grant awards
- Fellowships and tuition support from assistantships
- Long-term loans, including Direct loans, PLUS or Grad PLUS, private, or state sponsored educational loans
- Stipends paid for student residence roles
- Stipends paid for support of personal scholarly activities such as an undergraduate research project or experiential learning opportunities including an unpaid internship
- Cash awards and prizes awarded to students only. Awards and prizes for competitions open to students and non-students alike are not considered countable resources. Any other cash prize awarded because the recipient is a student (e.g., for competitions open only to students) is considered a resource.
- Prizes awarded to graduating seniors are generally considered to be a resource in the next term only if the student re-enrolls. Cash prizes for undergraduates who are not graduating are discouraged and must be counted as a resource for the following term.
Earnings from work that are not based upon financial need are specifically excluded from consideration as resources.
Non-cash prizes are not generally counted, except when they are in place of items in the standard cost of attendance (e.g., waiver of housing charges).
Stanford students may have occasion to travel in support of their course of study or research. A department may wish to provide funding for such travel. Rather than reimbursement through a stipend, which may be taxable income to the student, use the travel expense reimbursement process when possible.
Standard Cost of Attendance
An average student budget will consist of the following expenses:
- Tuition and fees
- Housing and Food
- Books and supplies
- Personal expenses
- Non-emergency travel between home and campus
Additional costs that commonly are considered on a case-by-case basis are:
- Computers and related equipment
- Thesis or dissertation costs or licensing fees
- Immunizations if required for the academic program
- Allowances for students with disabilities
- Study abroad/away costs
- Medical expenses
All such costs must be supported with documentation to be included in the allowable budget.
If an award is made for an additional educational expense that the student will incur or has incurred and the student’s expense equals or exceeds the amount of the payment, the payment may be offset with a Cost of Attendance budget adjustment when proper documentation is provided.
Resolving “Overawarded” Students
When the student is receiving federal or state financial aid, and/or institutional need-based aid or athletic scholarship, all other resources must be evaluated to ensure that:
- The resource is not considered to be a countable resource by financial aid regulations; and/or
- The resource fits within the established budget for the student and when need-based aid is involved also within the level of need (i.e. the student is not overawarded ); and/or
- The resource is designated for educational costs not already included in the budget and these costs are documented. A financial aid administrator may then allow the cost of attendance to be increased to allow the additional resources.
The required documentation must include:
- the amount of the resource and the costs that the resource is meant to cover,
- the educational purpose of the activity, program, materials, travel, or other expense for which the funds are given,
- and the academic period(s) for which the funds are given.
Scholarship, fellowship and grants to students enrolled in degree programs may be subject to tax. Amounts that are used for tuition and other fees required for enrollment, such as books, supplies, and equipment required for courses, are tax free to the recipient. All other awards, such as those applied to room and board or stipends for incidental expenses, are potentially taxable for the recipient. See additional details at IRS.gov or the Stanford Student Services Tax Essentials & Resources website.
Taxable scholarship, fellowship and grants awarded to non-residents of the U.S. are subject to 14% federal tax withholding and are reported to the recipient annually on Form 1042-S. Taxable amounts awarded to U.S. citizens and residents are not reported to the recipient on a tax form but must be self-reported on their tax return. Recipients are advised to consult a tax advisor or the resources above. Note that for international undergraduate need-based aid recipients the financial aid program covers the cost of the 14% tax withholding for their financial aid funds. For all others, tax withholding charges will be added to their student account at the time funds are disbursed.
Updated on October 18, 2023 5:50 AM