The NASA Space Center has offered its research scientists scholarships to complete their research and write a Ph.D. dissertation. To qualify for the scholarship, an employee must do research in an area related to the employees job at NASA and agree to return to NASA and work for at least two years after the degree is awarded otherwise the scholarship money must be repaid to the company. The company believes that this is a qualified scholarship, the receipt of which is tax free income. The company has asked you for a written opinion letter addressing the taxability of scholarships awarded to its employees. Is the receipt by the employee of the scholarship taxable income to the employee