Subject: Guidelines for Determining Graduate Student Compensation Levels on NIH Grants
The purpose of this document is to provide guidance to the University of Washington community on the NIH requirements related to determining compensation levels for graduate students working on NIH research grants.
In 2001 the National Institutes of Health (NIH) issued a revision to their policy related to the level of graduate student compensation supported by funds from NIH research grants and cooperative agreements. Under this policy, the maximum amount awarded by the NIH for graduate students supported on research grants or cooperative agreements is tied to the zero level National Research Service Award (NRSA) postdoctoral stipend in effect at the time the grant award is issued. The policy also mandated that, consistent with cost principles for educational institutions described in Office of Management and Budget (OMB) Circular A-21, section J.41.b, the compensation of graduate students supported by research grants must be reasonable. NIH defined compensation as salary or wages, fringe benefits, and tuition remission. As of February 2007 the "zero level" NRSA award is $36,996 per year. OMB also defines reasonable as meaning that “..the tuition or other payments are reasonable compensation for the work performed and are conditioned explicitly upon the performance of necessary work”.
The NIH does however provide PIs authorization to re-budget project funds to cover the actual cost of graduate students who are compensated in excess of the award limitation. Project funds may be used to compensate graduate students up to the "amount paid to a first-year postdoctoral scientist at the same institution performing comparable work."
For purposes of determining the appropriate support level the compensation for both graduate students and postdoctoral fellows is defined to include salaries or wages, fringe benefits and tuition remission. It is anticipated the combination of wages, benefits and tuition remission for some graduate students may exceed the compensation level the NIH will award. That is, it may exceed the zero level postdoctoral stipend, currently $36,996. In these cases PIs are authorized to re-budget NIH project funds to support the graduate students but, in no case may a graduate student working on an NIH project be compensated from that project's funds at a level exceeding the school/college average compensation level (salary and benefits) for a first year postdoc. When this occurs the excess will need to be paid from PI, department, and/or school/college non-federal funds. In the absence of a school/college specific average compensation level for a first year postdoc, the established University minimum will prevail.
EXAMPLE (using the UW Academic Resources Salary Rates and Minimums schedule)
As noted above, while the NIH will award a maximum of $36,996 per year for a graduate student, they will allow rebudgeting of project funds so that a higher level may be charged for graduate student support but only up to the minimum of a first year postdoc. In the above example the NIH would normally allow the PI to rebudget and charge up to $44,506 per year (including salary, benefits and tuition) for a graduate student working on an NIH grant. For schools/colleges where the established average for a first-year postdoc is greater than the University minimum, the higher amount (including benefits) becomes the compensation limit for a graduate student working on an NIH grant in that school/college.
It is recognized that some grants may employ graduate students from schools/colleges outside of their own school/college. In these cases the compensation limit should be determined based on the established average postdoc compensation level in the respective school/college where the grant resides.
PIs are reminded that, unless other arrangements have been approved in advance, they are generally allowed to charge their NIH grants and contracts only up to the maximum that the agency will allow, i.e., up to the combined average salary and benefits for a first-year postdoc in their school/college. As shown in the example above, this may require rebudgeting of project funds (for non-modular grants) as allowed by the NIH (prior approval not required). Given the nature of modular grants, formal rebudgeting is not necessary unless the change exceeds 25% of the total award amount.
Questions concerning these guidelines should be directed to Ted Mordhorst, Assistant Director for Post Award Compliance, Research Accounting and Analysis.