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Dear University Business Managers,

The following was sent to Graduate Students this morning and is just an FYI for your records. Please note that no changes are planned for how students receive their teaching and research assistantships.

To: Graduate Students
From: Suzanne Barbour, Dean, The Graduate School; Rachelle Feldman, Interim Vice Provost, Enrollment; Beverly Wyrick, Director of Finance and Administration, The Graduate School

As students at the University North Carolina at Chapel Hill, you are involved in many types of activities and may receive opportunities and payments from a variety of sources. Changes are coming to the method and timing of how you receive payment for some of these opportunities.

Before we go into the details of these changes, it’s important to understand these two policies:

  • All monies paid to support students are considered financial aid, unless they are compensation for work performed or reimbursement of travel expenses 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.
  • Fellowships, scholarships, training grants, prizes and contests, research studies and UNC funded internship opportunities including stipends, and travel for the student’s academic benefit are considered financial aid, including during the summer term.
  • All financial aid payments must be coordinated with any other aid a student receives. Any student receiving state, federal or need-based institutional funding may not receive total aid from all sources which exceeds the cost of attendance.  In some cases, a reduction to federal or state aid initially offered by the Office of Scholarships & Student Aid Office will be necessary to remain compliant with federal guidelines.

To ensure UNC-Chapel Hill is compliant with federal and state regulations, the University has taken a comprehensive look at payments to students and recommended some changes.  These changes should not only ensure compliance with regulations but also provide timely disbursement of awards and reduce the instances when students may be asked to return funds to the University.

Changes to Financial Aid Payments

The changes identified include:

  • Training grants to students are considered financial aid, not compensation, and like all other financial aid, will be processed by your department each semester rather than in monthly installments. While this change requires a shift in how you plan and budget your finances, it is important to note that the amount you receive is not changing and you’ll receive the total amount sooner. It also means that this payment will no longer be provided as income and the tax considerations for scholarships, fellowship grants, and other grants differs from taxable income. Resources on financial planning and taxes are listed below to help you during this transition.
  • Beginning in August 2021, training grant payments and all other non-compensation types of awards will be reported on form 1098-T, issued by the University Cashier, instead of a 1009-M or W-2.
  • All non-compensation will show on your Student Center account in ConnectCarolina.

Important Reminders

If you receive an award AFTER you have accepted financial aid, it is possible your aid will be reduced to avoid exceeding the cost of attendance for your program.

(Note: In most cases the aid reduced is in the form of student loans.)

  • It is recommended you work with the Office of Scholarships and Student Aid periodically to review your cost of attendance.
  • If you haven’t already, be sure to sign up for electronic refund for payments from your student account. Electronic refund is the fastest and safest way to receive payments.

NOTE: Even if you’re already receiving direct deposits for paychecks through Human Resources, you also need to sign up for electronic refund to receive credit balances from your student account (for financial aid awards).

Financial Resources for Students

Budgeting and financial planning:

Tax Questions:

  • The UNC School of Law hosts a Volunteer Income Tax Assistance (VITA) program to help with taxes.
  • The Internal Revenue Service (IRS) Topic No. 421 provides the policy about taxability of scholarships, fellowship grants, and other grants.
  • The Internal Revenue Service (IRS) publication 970 provides the policy for tax benefits for education.
  • The University Cashier has detailed information on forms issued by their office, such as form 1098-T.
  • The UNC Payroll Services has information on payroll taxes and forms, such as W-2, W-4, and NC-4.

Who to Contact?

For questions about funding from your department, contact your department’s business manager, student services manager, or director of graduate studies.

For questions about how your financial aid may be impacted,

contact the Office of Scholarships and Student Aid.

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