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The Student Incentive Payment (SIP) Program

  • The Student Incentive Payments Program (SIP) is a federally funded initiative through the Maritime Administration (MARAD). The Program provides financial support to cadets enrolled in the Strategic Sealift Midshipmen Program (SSMP) at one of six State Maritime Academies (SMAs) who become licensed officers in the U.S. Merchant Marine. Upon graduating, officers become part of the Navy's Strategic Sealift Officer Force.

As an essential component of national defense, the U.S. Merchant Marine provides the primary sealift capability necessary to meet national defense requirements. To support these sealift requirements, the Department of the Navy established the Strategic Sealift Program. The Program provides Navy officers the opportunity to obtain a valid U.S. merchant mariner’s license and subject matter expertise in sealift, maritime operations, and logistics necessary to fulfill many of the Navy’s combat support missions.

To further support defense requirements, incentives are available to SSMP cadets through SIP. Those enrolled can receive up to $64,000, which must be used to offset the cost of tuition, uniforms, books, and subsistence.

The SIP process has six steps. Students are encouraged to talk to their academy’s SIP coordinator to learn more about the eligibility requirements and application process.

1. Student Outreach 2. Annual Funding 3. Application & Enrollment
4. Semester Payments 5. Service Obligation 6. Graduation & Compliance

Student Outreach

Information regarding SIP is typically available from one of the six State Maritime Academies (SMA). Each academy conducts various outreach activities to promote SIP, where students can obtain information relating to the application process. These activities include career fairs, seminars, one-on-one meetings, and engagement at various school admission events. Students are encouraged to contact their SIP coordinator for information regarding eligibility requirements and how to apply. Additional information regarding outreach can also be found in the SIP Booklet and various SIP promotional materials accessed through MARAD's Student Incentive Program Portal.

Annual Funding

The Student Incentive Payment Program (SIP) funding is authorized by Congress through Title 46 Shipping § 51509 and appropriated annually. Furthermore, funds are administered according to the Federal Code of Regulations under 46 CFR § 310. The number of SIP applications approved by MARAD for enrollment into the Program is limited by the amount of funding appropriated each year. Once available for distribution, the funds are obligated by MARAD to each SIP recipient up to the maximum limit and according to their enrollment approval date and graduation year. 

If an SMA does not have a sufficient number of eligible students to utilize all of its allotted quota, the unused subsidies may be reallocated on a need basis to academies with eligible students. In the next academic year, each School's subsidy quota for entering students will revert to its original level.

Application & Enrollment

At the beginning of each fiscal year, MARAD allocates funding to each State Maritime Academy (SMA) for SIP enrollments. Students are encouraged to contact their SIP coordinator for specific details on applying or registering for an interest in the program. Students are required to register their interest and then apply through the Student Incentive Program Portal.

Upon receipt of a complete application package and the SMA’s acknowledgment of a student’s good standing, MARAD reviews and processes each application according to entrance requirements outlined in 46 CFR § 310.7. Students are encouraged to check that all application elements are complete before submission to MARAD. Current entrance requirements, as outlined in the Code of Federal Regulations Section §310.6, are as follows:

Entrance Requirements

(a) Enrollment prior to April 1, 1982. A candidate for admission to a school who wishes to be considered for Federal student subsistence payments shall:

(1) Be a citizen of the United States.

(2) Be obligated to (i) complete the Naval Science curriculum (ii) take all necessary and positive steps to obtain a commission as ensign in the United States Naval Reserve, (iii) apply before graduation for such commission, and (iv) accept such commission if offered. A breach of this agreement will result in termination of cadet status and of Federal student subsistence payments and may lead to legal action for recovery of all past such payments. The requirements of this paragraph shall not apply at The Great Lakes Maritime Academy.

(3) Be obligated to sit for the appropriate licensing examination of the United States Coast Guard. A breach of this agreement will result in termination of cadet status and of Federal student subsistence payments, and may lead to legal action for recovery of all past such payments.

(4) Meet the physical standards specified by the United States Coast Guard for original licensing as a merchant marine officer. The written certification of the Superintendent of the school, based on a physical examination by a doctor, the results of which are on record at the school, that a candidate meets these requirements, will be acceptable to the Administration.

(5) Possess a secondary school education or equivalent, satisfactory for admission as an undergraduate, to colleges or universities under control of the State in which the school is located.

(6) Meet requirements established by the school in regard to such criteria as the individual's secondary school grades, rank in graduating class, aptitude, achievement, and qualities of leadership.

(b) Enrollment on or after April 1, 1982. A candidate for admission to a school who wishes to be considered for the Federal student incentive payments shall:

(1) Meet the requirements of paragraphs (a) (1), (4), (5), and (6) of this section.

(2) Be at least seventeen (17) years of age and not have passed their forty-second (42nd) birthday at the time of commissioning 

(3) Apply for, be offered, and have accepted midshipman status in the United States Naval Reserve (including the Merchant Marine Reserve, United States Naval Reserve) and simultaneously have applied and been accepted for Enlisted Reserve status.

(4) Be obligated to complete the naval science curriculum.

For further information on the application process please contact your local SMA SIP coordinator

Semester Payments

Students are typically paid once a semester through direct deposit according to the payment schedule determined by MARAD at the time of enrollment. Each student must provide bank account details as part of their application to receive payments. The Direct Deposit Form is available through Direct Deposit Sign-up Form.

Payment schedules are determined by both the year of graduation and the student's status at the time of enrollment (Freshmen, Sophomore, or Junior). Details of typical payment schedules can be requested through your SIP Coordinator or MARAD. Note that payments are subject to receiving a semester report of good standing by your SMA before payment.

MARAD must be notified of any change of status that affects your SIP payment, such as a change in a graduating year, any 'Leave of Absence,' Dropping on Request (DOR), or Dis-enrollment from SIP. 

Any questions regarding payments should be directed to your SMA SIP coordinator.

Service Obligation

According to 46 CFR § 310.7, in exchange for financial assistance all SIP recipients are required to participate in various service obligations. An excerpt of the service obligation is provided below, and is also available through MSCS.

Excerpts from CFR § 310.7

(3) Form of the service obligation contract. The service obligation contract shall obligate the midshipman to—

(i) Use the student incentive payment to defray the cost of uniforms, books and subsistence;

(ii) Complete the course of instruction at the School;

(iii) Take the examination for a license as an officer in the merchant marine of the United States on or before the date of graduation from a School and fulfill the requirements for such license not later than three (3) months after such graduation;

(iv) Maintain a valid license as an officer in the merchant marine of the United States for at least six (6) years following the date of graduation from a School, accompanied by the appropriate national and international endorsements and certification required by the United States Coast Guard for service aboard vessels on domestic and international voyages (“appropriate” means the same endorsements and certifications held at the date of graduation, or the equivalent);

(v) Apply for an appointment as, and accept if tendered, and serve as a commissioned officer in the United States Naval Reserve (including the Merchant Marine Reserve, United States Naval Reserve), the United States Coast Guard Reserve, or any other Reserve unit of an armed force of the United States for at least six (6) years following the date of graduation from a school; and

(vi) Serve in the foreign or domestic commerce or both, and the national defense of the United States for at least three (3) years following graduation from a School—

(A) As a merchant marine officer serving on vessels documented under the laws of the United States or on vessels owned and operated by the United States or by any State or Territory of the United States;

(B) As an employee in a United States maritime-related industry, profession, or marine science (as determined by the Maritime Administrator), if the Maritime Administrator determines that service under paragraph (b)(3)(vi)(A) of this section is not available to such individual;

(C) As a commissioned officer on active duty in an armed force of the United States or in the National Oceanic and Atmospheric Administration or in other maritime-related employment with the Federal Government which serves the national security interests of the United States, as determined to be satisfactory by the Maritime Administrator; or

(D) By combining the services specified in paragraphs (b)(3)(vi)(A), (b)(3)(vi)(B) and (b)(3)(vi)(C) of this section; and

(E) Such employment in the Federal Government must be both significantly maritime-related and serve the national security interests of the United States. “Significantly” is equated to a material or essential portion of an individual's responsibilities. It does not mean a “majority” of such individual's responsibilities, but means more than just an incidental part.

(4) Marine-related employment. (i) graduates who intend to claim employment in a United States maritime-related industry, profession of marine science as meeting all or part of the service obligation under paragraph (b)(3)(vi) of this section, shall submit evidence to the Supervisor that they have conscientiously sought employment as a merchant marine officer, and that such employment is not available. Such evidence and other information available, shall be considered in any finding. In view of current and projected employment opportunities, afloat, the Maritime Administrator will grant the shoreside employment option infrequently and only on the basis of comprehensive evidence.

(ii) The Maritime Administrator may consider the positions of operational, management and administrative responsibility in the following marine-related categories under the provisions of paragraph (b)(3)(vi) of this section: Civilian employment in Federal and State agencies related to maritime affairs, steamship companies, stevedoring companies, vessel chartering and operations, cargo terminal operations, naval architecture, shipbuilding and repair, municipal and state port authorities, port development, marine engineering, and tug and barge companies. The above list is not all-inclusive and is only intended to serve as a general guide.

Graduation & Compliance

Graduates must register with MARAD's Maritime Services Compliance System database (MSCS). MARAD encourages early registration in MSCS at the time of acceptance into the SIP Program. Upon Graduation, MARAD is notified of a student's status, and a confirmation of service obligation is sent. An example of the previous notice of graduation letter can be found at MSCS.

Annually, each SMA reports to MARAD the names of students who graduate to ensure that MARAD records are current and that SIP students who are obligated to serve are identified. Graduates must report their employment via the Service Obligation Compliance Report form (MA- 930) available through MSCS.

Any student receiving SIP who disenrolled from the SIP program for any reason will be assessed to determine whether any obligation to MARAD applies. Please contact the MARAD Office of Maritime Labor & Training for additional compliance information.


For general questions about the SIP Program, please contact the Office of Maritime Labor & Training.

Frequently asked questions and answers can be found in the SIP booklet at the Student Incentive Program Portal.