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Business and Policy Areas
Business and Policy Areas

Reporting Student Aid at a Public Institution


Wayne Cate, Chief Business Officer at Teachum State University, began to review the report of the University’s Financial Activities.  He continues to have questions regarding the new model report of Student Financial Aid. Specifically, he would like to know the difference between student aid, net tuition, and fees.  In addition, where to record graduate student and employee fee waivers.  


Net tuition and fees are simply gross tuition and fee revenues less institutional scholarship allowances.  Student aid expense is that portion of student aid that an institution pays directly to the student who takes constructive receipt of the resources.  The amount can be paid check or a transfer to the student’s bank account through some type of electronic data transfer procedure.  Typically, the financial aid reported by the institution as scholarship and fellowship expense is the amount of aid the student received in excess of the on-campus charges.

GASBS 34, Footnote 41 states, "Revenues should be reported net of discounts and allowances with the discount or allowance amount parenthetically disclosed on the face of the statement or in a note to the financial statements.  Alternatively, revenues may be reported gross with the related discounts and allowances reported directly beneath the revenue amount."

NACUBO Advisory Report 97-1 pertaining to independent institutions states, "This document defines scholarship allowances for purposes of accounting for and reporting revenues net of discounts as required in paragraph 12.05 of the June 1996 American Institute of Certified Public Accountants’ (AICPA) audit and accounting guide, Not-for-Profit Organizations.  The guide states, ‘Revenues from exchange transactions should generally be reported gross of any related expenses.  If the organization regularly provides discounts (such as financial aid for students that is not reported as an expense, reduced fee for services, or free services) to certain recipients of its goods or services, revenues should be reported net of those discounts.’  In paragraph 13.07, the guide continues, ‘Some not-for-profit organizations provide reductions in amounts charged for goods or services, such as financial aid provided by colleges and universities.  Reductions in amounts charged for goods or services provided by a not-for-profit organization should be reported as expenses if such reductions are given in exchange for goods or services provided to the organization, such as part of a compensation package.  Amounts reported as expenses for such reductions should be reported in the same functional classification in which the cost of the goods or services provided to the organization are reported.  If such reductions in amounts charged for goods or services provided by a not-for-profit organization are given other than in an exchange for services provided to the organization, such amounts should be reported as follows:

  • as expenses to the extent that the organization incurs incremental expense in providing such goods or services
  • as discounts if the organization incurs no incremental expense in providing such goods or services.’"

Reporting student aid at a public institution are similar to the reporting process employed at an independent institution.

Recorded as gross are tuition and fees.  Any waivers to the gross tuition and fees are scholarship allowances, or compensation/benefits expense.  In accordance with Footnote 41, GASB 34, displayed on the face of the financial statements are the gross tuition and fees.  

How and where graduate fee waivers are reported, depends on whether the fee waiver is in exchange for services or a simple fee waiver.  If it is a simple fee waiver, the waiver is treated as a scholarship allowance as discussed above.  If the fee waiver is a part of the student’s compensation for employment as a graduate assistant, it is recorded as a compensation/benefits expense in the same account and function that records the graduate assistant’s salary.

If an employee takes a course and gets a partial waiver, the waiver amount is reported as a compensation/benefits expense in the functional category that employs the employee.