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In my department, students can be paid quite differently, and accumulate multiple fellowships and assistantships. Departmental fellowships are provided upon acceptance to some top applicants. Students can also be hired as RAs by interested faculty members. RA stipends are also not fixed by the department, and vary quite widely depending on the advisor and on the funding body. On top of departmental fellowships and RA, some students also accumulate external fellowships that they earned independently.

One direct consequence of this approach is that some students are paid market-competitive salaries, whereas many other students end up not being funded at all (especially Master students).

On one hand, faculty who can afford to pay large stipends usually bring a lot of money to the department, can attract a large pool of very qualified students, and are very productive.

Most departments, on the other hand, have much more restrictive policies (some universities even set institute-wide stipend rates), and seem to be doing well.

I was recently on a committee that is trying to rethink these policies, disallowing the possibility of a combining an assistantship/external fellowships and a departmental fellowship, which will enable us to fund more students. However, one of our main concerns is that future top students may be more inclined to attend elsewhere (we lose a lot of excellent students to top schools abroad). Faculty who can pay better rates are also not satisfied with a possible change in policy. (My group is one of those that can pay competitive rates, but is willing to discuss.)

My question is: what are some issues to consider when transitioning from our more liberal student funding policy, to a more "egalitarian" policy? Anecdotal evidence is also welcome.

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The more competitive and prestigious the school, the easier it is to be egalitarian, because you can always get students to enroll there. When you have trouble attracting students, incentives that may lead to an unequal playing field may be needed to get better students.

For instance, when I was applying, there was about a 50% spread between my lowest and highest offers. However, some of this was handled not by awarding an RA on top of an external fellowship but a “merit prize” of several thousand dollars as a reward for bringing in the fellowship. That might be a way to offer something substantial for people who have their own money without making things too far out of balance.

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Some observations from a single case study from a school that had a fairly "unegalitarian" approach to grad student pay (I was there as a PhD student, and I definitely was on the upper end of pay, so take this with a grain of salt):

  • Forcing equal pay is great, if the pay is still reasonable to good for everybody. If you end up giving everybody so little that they won't be able to really live from their salary or stipend you are not really improving the situation. Be especially careful to look at current living costs in your city, not what your grad student salary or stipend was many, many years ago. Also take into account that not all students are independently wealthy, and some students may have dependents (spouse, children, etc.) that count on them.
  • Consider that oftentimes in practice not all PhD students do the same job. In my school, people who made more money often carried a huge fraction of the teaching load or were involved in the most annoying, side-tracking projects (or both). If you want to give everybody the same pay you need to make very sure that they end up doing the same amount of "not-my-core-research" side tasks. This is very difficult, but not impossible, to juggle.
  • You mention being able to hire more students. This honestly does not sound like your goal is to increase fairness, but rather to hire more students with the same money. Be aware that the end result may be that you have more students who are, in total, less happy than before (and potentially less qualified, see below). I honestly suggest not doing that, but looking into ways to distribute the existing money to the existing students more fairly.
  • Having outs to pay individual applicants more increases your chances of actually hiring outstanding individuals. Again, not all students are the same. A motivated fresh graduate can maybe be attracted with a small standard stipend, but if you occasionally want to attract people with industry experience (as I like to do in my field of research) you will almost certainly need to meet somewhere in the middle between "grad student stipend" and "industry salary".
  • Forcing equal pay may sometimes lead you into problems when you want to fill special roles in a lab. For instance, we sometimes needed to hire software developers for projects. There was no real official job role, so they were officially "research assistants", which put them on the exact same scale as PhD students. However, a PhD student research assistant is implicitly paid with the promise of getting a PhD - a developer in a project not so much. If you can't make up for this with higher pay, you will end up in troubles.

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