34 C.F.R. § 648.40 How does an academic department select fellows?
(a) In selecting individuals to receive fellowships, an academic department shall consider only individuals who—
(1) Are currently enrolled as graduate students, have been accepted at the grantee institution, or are enrolled or accepted as graduate students at an eligible nondegree-granting institution;
(2) Are of superior ability;
(3) Have an excellent academic record;
(4) Have financial need;
(5) Are planning to pursue the highest possible degree available in their course of study;
(6) Are planning a career in teaching or research;
(7) Are not ineligible to receive assistance under 34 CFR 75.60; and
(8)(i) Are United States citizens or nationals;
(ii) Are permanent residents of the United States;
(iii) Provide evidence from the Immigration and Naturalization Service that they are in the United States for other than a temporary purpose with the intention of becoming permanent residents; or
(iv) Are citizens of any one of the Freely Associated States.
(b) An individual who satisfies the eligibility criteria in paragraph (a) of this section, but who attends an institution that does not offer the highest possible degree available in the individual's course of study, is eligible for a fellowship if the individual plans to attend subsequently an institution that offers this degree.