School of Medicine: Policy on Tuition and Fees on Sponsored Projects

Unit Policy

Title

School of Medicine: Sponsored Projects Tuition and Fees Policy

Introduction

Purpose

This policy standardizes guidance for budgeting and managing tuition and fees on sponsored projects across the School of Medicine ("SOM") at the University of North Carolina at Chapel Hill ("University" or "UNC-Chapel Hill"). It aligns with federal regulations, sponsor-specific guidelines, University policies, and best practices for supporting compliant and strategic financial planning. 

Scope

This policy applies to all SOM departments and units preparing proposals or managing awards that include tuition or fees for: 

• Graduate students 
• Postdoctoral fellows 
• Predoctoral trainees 
• Students enrolled in combined, dual-degree programs (e.g., MD/PhD, DDS/PhD) 
• Professional students (e.g., MD) participating in an eligible, sponsor-approved research training program or mechanism (e.g., R25, TL1). 

This policy applies to any new proposals in development or in review.

Policy

Policy Statement

Departments and units should maximize flexibility in managing awards while ensuring adequate coverage. Generally, tuition (in-state or out-of-state) and fees should be fully budgeted on sponsored project proposals when student support is anticipated, unless restricted by sponsor guidelines, including in situations where sponsors limit the amount of tuition and fees they will award (e.g., NIH NRSA tuition caps). 

When budgeting for training grants or other student-support mechanisms where a student’s residency status is unknown , departments should use out-of-state tuition rates and include an annual escalation factor of up to five percent (5%) for multi-year proposals. If the student has already been recruited, it is advised to confirm residency status with the student’s academic home department.

A. Budgeting and Award Management Guidelines

a. National Research Service Award (NRSA) Training Grants (e.g., T32s, F31s)

Proposal Stage: 

• Budget 100% tuition and fees for each eligible trainee. 
• Use out-of-state tuition rates if the student’s residency status has not been confirmed. 

Award Stage: 

• National Institutes of Health (NIH) will award tuition at capped rates (e.g., 60% of the requested amount), per NOT-OD-25-105:  

  NIH Classification	Training Level	Description	Tuition Cap
  Standard Predoc	Predoctoral	PhD only	awarded 60% of the amount requested, up to $16,000/year
  Dual-Degree Program	Predoctoral	MD/PhD, DDS/PhD, DVM/PhD, etc.	awarded 60% of the amount requested, up to $21,000/year
  Standard Postdoc (no formal degree)	Postdoctoral	No enrollment in an academic degree program	awarded 60% of the amount requested, up to $4,500/year
  Formal Degree-Granting Program	Postdoctoral	Postdoc enrolled in MPH, MS, MBA, etc.	awarded 60% of the amount requested, up to $16,000/year

Although the NIH calculates tuition support using trainee-level caps, funds are awarded as a lump sum, which can be allocated flexibly across all eligible trainees. For example, a department may fully cover one trainee's tuition and allocate none to another, if total costs remain within the lump sum. 

• If needed, departments can reallocate funds from other categories, like travel or trainee-related expenses, to help cover tuition shortfalls if total costs remain within the approved award.  
• Consider working with eligible students to reclassify their residency to in-state, which can help reduce tuition costs and stretch available funds.

b. Non-NRSA Federal Awards (e.g., R01, R21, other Research Awards)

Tuition as an Allowable Cost 

• Graduate student tuition (in-state or out-of-state) and allowable fees may be included in non-NRSA federal research proposals if the student is contributing effort to the project. 
• Ensure the student’s level of effort aligns with their compensation (stipend or salary).  

Application of Sponsor Guidelines

• Before budgeting tuition, review the sponsor’s solicitation or budget guidance to ensure tuition is an allowable cost. 
• For federal awards, allowability is governed by 2 CFR §200.466, which permits tuition remission if: 
  • The student is performing activities necessary for the Federal award.
  • Tuition support follows the institution’s written policy and is applied consistently across Federal and non-Federal activities.
  • The student is enrolled in an advanced degree program, and their award-related work is tied to their degree.
  • Tuition and other payments represent reasonable compensation, explicitly conditioned on the performance of required work.
  • Students are compensated under Federal and non-Federal activities in a similar manner.
• The “maximum amount NIH will award for the support of a graduate student on a research grant or cooperative agreement is tied to the National Research Service Award (NRSA) zero-level stipend for postdoctoral fellows in effect at the time the grant award is issued on the Federal award date.” 

c. Non-Federal Awards (e.g., Industry and Foundations)

While federal regulations may not apply directly, departments should still follow core principles of budgeting: allowability, reasonableness, consistency, and alignment with sponsor rules.

• Always review the sponsor’s budget guidelines or Request for Proposals (RFP). 
• If tuition is not explicitly prohibited, it may be included with a clear justification (e.g., a graduate student is contributing effort to the project). 

B. General Considerations

a. Tuition vs. Fees – Facilities and Administrative (F&A) Implications 

“Tuition” refers to instructional costs; “fees” are additional charges for student services (e.g., health services, identification cards). 

1. Federal Projects
   • Budget only for allowable fees.  
     • Use the Graduate Student Fee Table and Guidance for allowable vs. unallowable costs.  
   • Allowable fees should be excluded from F&A calculations. 
2. Non-Federal Projects
   • Fees may include both allowable and unallowable components depending on sponsor guidelines. 
   • Calculate F&A according to the sponsor’s guidance. 
     • If using a Modified Total Direct Cost (MTDC) base, exclude all tuition and fees (including non-allowable fees) from the F&A base. 

b. Effort-Based Pro-Rating

• For master’s students, tuition may be prorated based on the level of effort a student devotes to the project, consistent with Graduate School guidance. For doctoral students, tuition remission is awarded in whole when eligibility requirements are met; however, the in-state tuition charge may be allocated proportionally across funding sources (sponsor vs. institutional/departmental). 
  • For example: if a doctoral student is budgeted at 50% effort on a project, 50% of their in-state tuition may be charged to the grant, with the remaining 50% covered by institutional or departmental funds. 
• Departments are responsible for ensuring that any tuition costs not charged to the sponsor are covered through appropriate institutional or departmental sources. 

c. Out-of-State Tuition

• If a student’s North Carolina residency has not been confirmed, budgeting at the out-of-state rate is recommended to avoid underestimating tuition needs. 
• Include a brief explanation in the budget justification, such as:  
  • “Student’s residency status is pending; out-of-state tuition has been included to ensure adequate coverage.” 

d. Coverage Expectations

• Each student’s Memorandum of Understanding (MOU) outlines financial responsibilities related to tuition, fees, and other associated costs. Departments should adhere to the terms defined in each MOU. 

e. Responsibilities

Definitions

• Allowable Cost: An expense that may be charged to a sponsored project under federal regulations, sponsor guidelines, and university policy. To be allowable, a cost must be: 
  • Reasonable and necessary for the project 
  • Allocable to the project 
  • Consistently treated by the institution 
  • Compliant with sponsor terms and institutional policies 
  • In accordance with generally accepted accounting principles (GAAP) 
• Award: Financial support from a sponsor to conduct research, training, or other activities. Awards may be federal, state, and/or private. 
• Budget Justification: A narrative included in funding proposals to explain and justify each cost item requested, including tuition, fees, salaries, and fringe benefits. 
• Cashier’s Office: The University office responsible for student billing and tuition/fee collection. 
• Cost Sharing: The portion of project costs not covered by the sponsor, typically paid by the University or other third-party sources. Tuition support may constitute cost-sharing in some cases. 
• Departmental Funds: Funds managed at the department level, including discretionary accounts, general operating budgets, or school-based allocations, which may be used to supplement tuition support. 
• Dual-Degree Program: An academic program in which a student earns two degrees simultaneously (e.g., MD/PhD). These are subject to different tuition caps under NIH NRSA policy. 
• Effort: The proportion of time a student or employee dedicates to a specific project, expressed as a percentage of total university effort. Tuition may be prorated based on effort. 
• Facilities & Administrative (F&A) Costs: Also known as indirect costs. These are shared institutional expenses (e.g., utilities, administration) that cannot be assigned directly to a single project. F&A rates are calculated based on a defined cost base (e.g., MTDC). 
• Fees (Student Fees): Mandatory charges in addition to tuition, which support various student services and infrastructure. 
  • Allowable Fees (Account Code 568731): Permitted on federal awards. Examples include campus security, educational technology, registration, student identification card, transit, library, health services, and legal services. 
  • Unallowable Fees (Account Code 568732): Not allowed on federal awards. Examples include athletics, performing arts, campus recreation, and Carolina Union fees. These may be allowed on non-federal awards only if the sponsor permits them. 
  • Note: All fees, whether allowable or unallowable, must be excluded from the F&A base when using a Modified Total Direct Cost (MTDC) rate. 
• Formal Degree-Granting Program: An accredited academic program that results in a recognized degree (e.g., MS, MPH, MBA). This designation affects eligibility and tuition caps under NRSA grants for postdocs. 
• GradStar: The University's internal system for processing graduate student payments (stipends, tuition, fees) and applying tuition remission. 
• Graduate Student Fee Table: An OSP-issued guidance document that distinguishes which student fees are allowable or unallowable on sponsored projects. Used for budgeting and F&A base calculation. 
• In-State Tuition Award: Institutional financial support to cover in-state tuition for eligible graduate students, typically managed by the Graduate School or School of Medicine. 
• Institutional Funds: Internal university sources, including departmental budgets, SOM contributions, Graduate School support, and unrestricted gifts or endowments. 
• Modified Total Direct Cost (MTDC) Base: A budgeting standard used to determine F&A costs. Under MTDC, certain costs, such as tuition, equipment, and participant support, are excluded from the F&A calculation. 
• Memorandum of Understanding (MOU): A document outlining the agreed-upon financial and academic responsibilities between a student, department, and university, including expectations for tuition and fee coverage. 
• NIH NRSA (National Research Service Award): Training grants or fellowships funded by the NIH (e.g., T32, F31). Tuition reimbursement is subject to caps, and funds are awarded as a lump sum. 
• Non-NRSA Award: A research grant or award not part of the NIH NRSA mechanism (e.g., R01, R21). Tuition may be allowable depending on sponsor policy and student effort. 
• Out-of-State Tuition: Higher tuition rate charged to students who are not classified as North Carolina residents. Departments are encouraged to budget at this rate if residency is not confirmed. 
• Postdoctoral Fellow (Postdoc): An individual holding a doctoral degree engaged in temporary research training. Tuition support may apply only if the postdoctoral student is enrolled in a formal degree program. 
• Rebudgeting: The reallocation of awarded funds between budget categories (e.g., from travel to tuition), subject to sponsor restrictions and institutional policies. 
• Residency Reclassification: The formal process of changing a student's tuition classification from out-of-state to in-state, often based on meeting North Carolina residency requirements. 
• Sponsor: An external organization (e.g., NIH, foundations, industry) that funds research or training activities through grants, contracts, or cooperative agreements. 
• Stipend: A fixed payment provided to trainees (often under NRSA mechanisms) to support their living expenses. Distinct from salary or wages and not subject to FICA taxes. 
• Tuition Remission: A waiver or reduction of tuition costs provided to eligible graduate students as part of their support package, usually alongside a stipend or salary through assistantships or fellowships. For non-resident students, this often means covering the out-of-state portion, so they pay the in-state rate. When charged to sponsored projects, tuition remission must also follow federal cost rules, sponsor guidelines, and UNC policy.

Related Requirements

External Regulations

• UNC-Chapel Hill Policy: Graduate Student Tuition Remission 
• UNC-Chapel Hill Tuition & Fees Information (Cashier’s Office) 
• UNC-Chapel Hill GradStar: Student Payment Types 
• UNC-Chapel Hill GradStar: TG Payment Changes FAQ 
• UNC-Chapel Hill OSP: Graduate Student Fee Table & Guidance 
• UNC-Chapel Hill Graduate School: Tuition Support Guidelines 
• UNC-Chapel Hill Graduate School: Faculty & Staff Funding Resources 
• NIH Grants Policy 11.3.9: Rebudgeting of Funds 
• 2 CFR §200.466: Scholarships, Student Aid Costs, and Tuition Remission 
• N.C.G.S. 116-143, Article 14: Tuition and Fees in Certain State Institutions

Contact Information

For general questions or for help interpreting sponsor policies, tuition eligibility, or budgeting complexities please contact SOM's Sponsored Programs Office or UNC-Chapel Hill's Office of Sponsored Programs for help interpreting sponsor policies, tuition eligibility, or budgeting complexities. 

General sponsored programs questions

Email: SponsoredPrograms@unc.edu

Proposal Questions

Contact your department’s OSP Sponsored Projects Specialist or School of Medicine Sponsored Programs Office Grants Analyst.