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- When do awards pay?
- The first batch disbursements for each term begin during the week prior to the 1st day of the term. If payments for the term have already begun, awards disburse several times a week as a part of a batch schedule, usually every other night. Follow this link for the current year’s schedule.
- How does the student get the funding?
- All payments to students are credited to the student’s University tuition account. Funds in excess of the amount owed are issued to the student via direct deposit to the student’s personal bank account, or mailed in the form of a check to the student’s mailing address, if they have not set up direct deposit. Students are responsible for maintaining their mailing address and direct deposit information, and do so via the myUMD link at http://www.d.umn.edu/
- Why are scholarships, grants or fellowships counted as financial aid?
- Scholarships, grants and fellowships are a financial resource to the student. Federal and state regulations require that any financial resource a student receives, as a result of the student attending college, be included in their financial aid award package.
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- How does scholarship funding affect financial aid awards?
- Entitlement aid is never affected by a departmental award. The most common entitlement awards are Minnesota State Grant and Federal Pell Grant. Other aid may be reduced or cancelled depending on a student’s overall financial need and/or cost of attendance. When other aid must be reduced or cancelled, the Financial Aid Office will start with the least desirable award. The most common aid that needs to be reduced or cancelled are parent PLUS loans, private student loans, federal student loans and work-study.
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- Are scholarships, grants or fellowships taxable?
- Maybe. Only scholarship and fellowship payments that meet IRS requirements of “qualified education expenses” such as tuition and required fees, are considered tax-free. IRS Publication 970 defines the types of scholarship and fellowship payments that are both taxable (non-qualified) and tax-free (qualified). For more information, you should refer the student to Education Tax Benefits. Even though non-qualified scholarship or fellowship payments are taxable to the domestic student, IRS does not require the University to withhold tax or report the payments to the IRS. Students, however, are required to report non-qualified scholarship and fellowship payments to the IRS on their individual tax returns. The IRS requirements are different, however, for “non-qualified” payments to international students. The IRS generally requires taxes be withheld at the rate of 14% and the scholarship/fellowship amounts be reported to both IRS and the student on IRS Form 1042-S. Only those international students who are eligible for tax treaty benefits are exempted from tax withholding on the non-qualified amounts. For more information, see Scholarship and Fellowship Grants.
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