The University will soon implement a new system for graduate student payments, according to a May 25 email from Suzanne Barbour, dean of The Graduate School at UNC.
The system, which will change the schedule for graduate student payments as well as the income classification of some fellowships, is scheduled to go into effect on Aug. 1, Beverly Wyrick, the director of finance and administration at The Graduate School, said.
Implementing changes
Graduate students are currently paid on a monthly schedule. The new system will pay students three times a year, Wyrick said, but the total amount students receive will not change.
Additionally, most fellowships are considered income for tax purposes, associate professor Scott Williams said.
Wyrick said some of these fellowships will now be considered financial aid, which will have implications for taxes. She said the changes will not affect students who receive their funding for payroll.
The changes are being implemented in order to keep policies consistent and to protect financial aid across the University as a whole, Barbour said.
“The federal government has very strict guidelines on how financial aid is allocated,” she said. “If we are doing it incorrectly even for one award, there's a potential we could lose all the financial aid coming to the University.”
Implications and reactions
Williams said there are no specific dates for the payments, so it will be harder for graduate students to manage their budgets effectively.
“This is a big ask for many students who are new to financial independence,” he said. “Many come directly from college, where you're not essentially responsible for your own finances for long periods of time. Asking them to have to be this responsible is a difficult thing.”
And navigating these new tax implications can present challenges. Barbour said the University cannot provide tax advice, but can refer students to outside sources.
“I wish it were different, but unfortunately, that's where we are,” she said. “There will also be a town hall Q&A where students can ask questions.”
Williams said these changes create an equity issue. He said most people who have heard about these changes view them as a disincentive to apply to the funding and training grants that are intended to help students.
A small but significant number of graduate students already work under the new systems. Williams said he has seen the direct effects his students have faced under the new tax implications.
“Changing how payments are viewed, no longer as income, but as financial aid, can have huge effects on your ability to secure credit for car loans for mortgages,” he said.
Graduate student Jean Marie Mwiza said his family was denied a house because his fellowships were considered financial aid rather than income.
Williams said a lot of banks will not consider scholarship aid as income, even with letters from University officials.
“They will reject this as income, and they also view a scholarship as being something that is unstable,” he said.
Doctoral student Emma Hinkle said she wanted some clarification from the University on these new policies — especially the reasons for the changes.
“Communication has been my biggest problem,” Hinkle said.
Although the University cannot provide direct tax advice, Hinkle said she would like to see more services provided to students to help them navigate these changes. She said she’d like to better understand exactly how her fellowships will be declared on tax forms.
Wyrick said she encourages students to reach out to the Office of Scholarships and Student Aid if they need help navigating these new policies.
“We know it's not always easy, especially with things like taxes,” she said. “Just reach out. That's the message I want us to get across.”
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