The University will soon be implementing a new graduate student payment system, according to a May 25 email from Suzanne Barbour, dean of the UNC Graduate School.
The system, which will change the timing of graduate student payments as well as the income classification of certain scholarships, is expected to take effect on August 1, said Beverly Wyrick, director of finance and administration at the Graduate School.
Implementation of 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 won’t change.
Additionally, most scholarships are considered income for tax purposes, Associate Professor Scott Williams said.
Wyrick said some of these scholarships will now be considered financial aid, which will have tax implications. She said the changes will not affect students who receive their payroll funding.
The changes are being implemented to maintain policy consistency and protect financial aid across the University, Barbour said.
“The federal government has very strict guidelines on how financial aid is allocated,” she said. “If we do it incorrectly, even for one price, we may lose all of the financial support provided to the University. “
Implications and reactions
Williams said there were no specific dates for the payments, so it will be more difficult for graduate students to effectively manage their budgets.
“This is a big demand for many students who are new to financial independence,” he said. “Many come straight from university, where you are not primarily responsible for your own finances for long periods of time. Asking them to be so 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 was different, but unfortunately that’s where we are at,” she said. “There will also be a question-and-answer session at the town hall where students can ask questions. “
Williams said these changes create a fairness issue. He said most people who have heard of the changes see them as a deterrent to applying for funding and training grants meant to help students.
A small but significant number of graduate students are already working under the new systems. Williams said he saw the direct effects his students faced due to the new tax implications.
“Changing the way payments are viewed, no longer as income, but as financial assistance, can have huge effects on your ability to get credit for auto loans for mortgages,” he said.
Graduate student Jean Marie Mwiza said his family were denied a home because their scholarships were seen as financial aid rather than income.
Williams said many banks would not view scholarships as income, even with letters from university officials.
“They will dismiss this as income, and they also see a stock market as something unstable,” he said.
PhD student Emma Hinkle said she wanted clarification from the University on these new policies, especially the reasons for the changes.
“Communication has been my biggest problem,” Hinkle said.
While 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 would like to better understand exactly how her scholarships will be reported on tax forms.
Wyrick said she encourages students to contact 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. This is the message I want us to get across.
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