Fellowship payments used for incidental expenses, including room and board, travel, and optional equipment are taxable. So too are amounts received for teaching, research, and other services required as a condition for receiving the fellowship. The only exception: amounts received for services required by the National Health Service Corps Scholarship Program or the Armed Services Professional Scholarship and Financial Assistance Program.
A state-sponsored college savings plan or prepayment plan, or a prepayment plan established by a private college.