NIH GUIDE, Volume 25, Number 1, January 26, 1996


P.T. 34


  Biomedical Research, Multidiscipl 

  Grants Administration/Policy+ 


National Institute of General Medical Sciences




Traditionally, graduate students have been employed on NIH research

grant projects as working staff members who are in many cases

simultaneously trained in research procedures and philosophy.  The

dual function of such employment is seen to be beneficial to both

current and future research objectives of the country.  Recently,

however, questions have been raised about the reasonableness of

compensation levels for graduate students that are requested in

research project applications submitted to NIH.




Public Health Service grants policy states that "Tuition remission

and other forms of compensation paid as, or in lieu of, wages to

students (including fellows and trainees) performing necessary work

are allowable provided that there is a bona fide employer-employee

relationship between the student and the institution for the work

performed, the tuition or other payments are reasonable compensation

for the work performed and are conditioned explicitly upon the

performance of necessary work, and it is the institution's practice

to similarly compensate students in non-sponsored as well as

sponsored activities."  The key phase is "reasonable compensation."


A recent audit of graduate student compensation at four selected

universities, performed by the DHHS Office of the Inspector General,

found that three of the four universities charged Federally sponsored

research projects $5.7 million in unreasonable graduate student

compensation.  The audit report recommends that Federal policy should

establish that graduate student compensation be based on assigned

responsibilities and not exceed the compensation of other individuals

of similar experience performing similar work at the university.

Consequently,  NIH has clarified policy with respect to the total

compensation of graduate students working on research grants.




As in the past, the NIH will continue to consider compensation for

personal services of graduate students as employees on an NIH

research project to be allowable as long the compensation is

reasonable.  For graduate students this compensation may include

tuition remission paid in lieu of wages.


Determination of "reasonable" is derived from the assumption that the

total compensation  for graduate students working on research grants

should be based on each student's level of experience and should be

calculated by adding salary, fringe benefits, and tuition remission.

In no case should the total compensation package for a student exceed

that of a staff member at the first postdoctoral level at the same





If the compensation (salary, fringe benefits and tuition remission)

requested for a graduate student exceeds $20,000, NIGMS staff contact

grantee officials to negotiate a reasonable level of compensation.

The salary and fringe benefits for an employee who is at the first

postdoctoral level are used as guideline in determining a reasonable

level of compensation.  Generally, NIGMS staff provide up to $20,000

to $23,000 total compensation for graduate students employed on

research grants.


Once a reasonable level of compensation has been determined, other

grant funds may not be rebudgeted to increase the compensation for

the graduate student(s) beyond the reasonable level.  Since OMB

Circular A21 requires that costs charged to research grants must be

reasonable, rebudgeting to increase the compensation beyond a

reasonable level would be in violation of the Circular.




Dr. John Norvell

National Institute of General Medical Sciences

45 Center Drive, Room 2AS-13B MSC 6200

Bethesda, MD  20892-6200

Telephone:  (301) 594-0533




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