Student employees performing necessary work toward a sponsored project may receive a Tuition Reduction Benefit (TRB). The “necessary work” requirement is outlined in OMB Circular A-21 and clarified in Memoranda 01-06.
Beginning with academic year 2013 – 2014, sponsored tuition for specific job categories for students (such as GRAs, TAs, AIs) will be processed on a Tuition Reduction Benefit document (SS3). The change is well described on the Graduate School’s website.
This procedure improvement enables the university to better comply with the federal government’s guidance on sponsored tuition, alleviating the tax burden for sponsored students.
The Tuition Reduction Benefit (TRB) requires special handling for sponsored students without an employment relationship with the University (who may be employed by a third party such as a corporation, foundation, etc.). To be eligible for this special handling provision of TRB from a sponsored project, the student must perform duties necessary to the scope of work of the sponsored program funding tuition. Please follow the process below for these students:
Once the above information and the appropriate justification have been received, SPAA will work with Student Accounts Receivable to ensure tuition coverage remains as processed.
SPAA strives to help the departments at the earliest opportunity, so the department may choose to notify SPAA at Step 1, when the SS3 is created. Unfortunately, we are currently unable to prevent the notices from being sent on the 12th and 20th class day.
Students receiving scholarships/fellowships support from a training grant (or similar award with a 70-subaccount) for which the primary purpose of the award is to fund student learning, may continue to receive scholarships/fellowships via an SS1 document created in FRMS.
The SS3 cannot cover ISSS fees. A companion SS2 document would need to be processed to cover those fees. SS2 documents are currently still created in *DEFINE. When processing an SS2 on a sponsored project, the processor must mark the “Duties Required” question as “Y” for Yes. Tax will be applied.
To create an employment-related SS2 on sponsored funds to cover the ISSS fee:
To create an AR code that covers the ISSS fee:
For questions about this procedure, please contact the Office of Accounting Special Billing section at email@example.com.
The United States Office of Management and Budget (OMB) states in circular A-21, “However, tuition remission and other forms of compensation paid as, or in lieu of, wages to students performing necessary work are allowable provided that…the tuition or other payments are reasonable compensation for the work performed and are conditioned explicitly upon the performance of necessary work.” This is the fourth of five stated conditions for allowability of tuition remission paid by a federal sponsor. This section of A-21, J.45, continues on stating that, “Charges for tuition remission and other forms of compensation paid to students as, or in lieu of, salaries and wages shall be subject to the reporting requirements stipulated in Section J.10.” A-21 Section J.10 outlines the requirement for effort reporting by sponsored educational institutions.
Principal Investigators, when you certify effort for your students which was compensated with tuition remission in lieu of salary, or as salary, you are certifying that the student performed duties that are necessary to the sponsored project as a condition of earning their compensation.
Additional guidance and regulation is provided in the Clarification Memo that OMB issued in 2001, “Clarification: OMB in the Circular did not intend to tie the allowability of tuition remission costs to how they are treated for tax purposes.”
For FY 2014-2015 the governing regulation will be the revised 2CFR 200.
Principal Investigators, the Handbook of Operating Procedures outlines policy for students (GRAs, TAs, AIs) at The University of Texas at Austin: http://www.policies.utexas.edu/policies/graduate-and-undergraduate-research-assistants
Tuition remission for graduate research assistants (GRAs) has been required on all grant proposals and contracts allowing tuition remission as a cost, since 2001 when the Vice President for Research and the Faculty Council issued the following policy document: http://www.utexas.edu/research/osp/documents/tuition_remit.pdf
Human Resource Services has a webpage on Student Employee Compensation: http://www.utexas.edu/hr/student/compensation.html
The Graduate School has published the following on their website: “Tuition Remission amounts charged to federal grant accounts are subject to regulations outlined in OMB Circular A-21. The charges are allowable only if the recipient is performing work toward the project being funded. Therefore, all tuition remission awards on federal grants are treated as wages.”
SS3s and SS2s processed as requiring duties are included in the effort certification process conducted semi-annually. For more information on effort certification, please visit http://www.utexas.edu/research/osp/spaa/effort_reporting.html.
If you have any questions about this information please contact SPAA at firstname.lastname@example.org.