Ask an ORCS: Paying Fees/Health Insurance for a graduate student from a grant

Scott Mills: 9/5/18

Problem and Question:   UM grad stipends are not extraordinary, and the ‘hidden’ cost to the student of required Fees and Health Insurance costs are substantial.  In order to increase the recruitment of the very best graduate students, can I use grant funds to pay not only their salary and tuition, but also their mandatory (required) fees and health insurance?  If so, how do I do it?

Answer: 

Before going down this not-so-easy road, your first avenue should be to try to give the grad student a higher stipend, and let them know that the salary implicitly includes these costs.

But if you feel you have to do this as an exceptional case, here’s some thoughts.  First let’s be clear that we’re only talking “mandatory fees” – the “optional” fees can never be paid by any grant.

If you want to pay health/mandatory fees off a grant, then your budget narrative must specifically and clearly specify paying for mandatory fees and health insurance as part of the student’s RA under that grant, and the sponsor must have agreed to that.  The necessary wording in the budget narrative would typically be in the “Other” category, along with the tuition request.  Something like:

                Mandatory Fees and Health Insurance: $xxxx / semester [or per year].

So if you have that wording in your submitted grant and the sponsor approves it, all is good.  (Internally, the health/fees will be paid to the student’s account through the financial aid office using the grant funds).

But here’s a twist that might be asked:  “If my student gets a UM Teaching Assistantship, which pays stipend and tuition but not the required fees or health insurance, then the student is essentially taking an out-of-pocket pay cut compared to when they were an RA for me.  Therefore, can I pick up their required fees and health for them from my grant while they are on a UM-paid TA?”    The answer is: possibly, for a private funder that has pre-approved this arrangement.  Just know that for most funders (especially federal and state but most others as well), an employees’ pay and benefits must be associated with the same funding source that is paying the stipend that semester (e.g. RA or TA).  This is the case despite the reality that we know is true: graduate students on TAs also multi-task and simultaneously work on their research.  That being said, if the sponsor formally agrees to your specific detailing of the payment of a grad student’s fees/insurance from that grant while they are on a UM TA (or an RA funded by a different source), this would be allowable.   

Finally, be aware that sometimes sponsors miss the fine print in a budget justification and approve things like this even though it goes against their own sponsor guidelines.  If that happens and they come back later on as a violation of their guidelines, the burden of reimbursement falls on the PI/Department.  So, it’s definitely best to try to either personally verify the sponsor guidelines, or ask your sponsor contact for a specific ok of this somewhat unusual request.