Disbursements to Students

Payments to and for the benefit of students can be for scholarships, awards, employment-related, or for reimbursement of expenses.


The USM Foundation does not pay scholarships directly to students. All scholarships are paid to students through the Financial Aid Office of each campus. The USM Foundation will reimburse the campus for applicable scholarships awarded.

It is the responsibility of the Financial Aid offices to verify that student awardees meet all terms of the scholarships being awarded. It is also the responsibility of the account administrators to ensure that the proper Foundation accounts are being used for reimbursing the scholarship accounts.

Proper documentation for scholarship reimbursement requests must include:

  • The Student’s name
  • The Name of the scholarship awarded
  • The amount awarded
  • The school term to which the award is applicable (Fall, Spring, Summer)


Awards are designed to recognize achievement.  Awards to recognize academic achievement may be paid directly to the student. A W-9, as well as the award notification letter, must accompany the Disbursement Request Form.

Awards paid to students are considered taxable and are reportable to the student on Form 1099 under IRC Section 74.

It is standard policy that all checks are mailed directly to the student. However, if the campus unit would like the check delivered to them so that the check can be presented at an award ceremony, the unit should note that on the Disbursement Request and provide an addressed envelope for mailing or inter-campus delivery.

Employment Related

If a student is given funds for which s/he must work (i.e., teaching assistant), that student must be an employee. Employment can either be handled through the University’s payroll system (the preferred method), in which case the USM Foundation can reimburse the University from the appropriate account, OR can be arranged through the USM Foundation payroll system. (See Payroll for information on placing a person on the USM Foundation payroll.)

Any payment given for services rendered, even if it is called a scholarship, is compensation and must be reported on a Form W-2.

Expense Reimbursement

Expense reimbursement falls into two categories for students.

  1. When the student is representing the University, such as a debate team competition, the student is treated as an employee and any payment must comply with the accountable plan rules. These payments are not reported as taxable income.
  2. When travel is for activities related to the student’s academic program, such as a research trip, the payment is considered a scholarship and therefore is subject to the rules for scholarship payment, potentially making the payment taxable to the recipient.

Our Vision

Our vision is to attract broad resources that transform the USM and its institutions, create a network of advocates to embrace the USM’s role as an educator and economic engine, and to grow a long-term, sustainable culture of philanthropy across the University System of Maryland.

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