Student Incentive Payment



SIP is a Department of Transportation (DOT)/MARAD program, not a U.S. Navy or Massachusetts Maritime Academy (MMA) program.  All SIP related requests and inquiries should be routed through the MMA SIP Coordinator.  The following is an excerpt from the MARAD SIP Booklet (December 2014):

"You are enrolled at a State Maritime Academy (SMA) that is dedicated to educating and training individuals for employment as licensed officers in the U.S. merchant marine. The Federal Government takes an active role in the training of merchant marine officers to ensure there is a cadre of well-trained officers available at all times. These merchant marine officers are available during peacetime and national emergencies to support the national defense and the economy.  As an incentive to become licensed officers in the United States merchant marine, the U.S. Department of Transportation’s (DOT) Maritime Administration (MARAD), provides a limited number of Student Incentive Payment (SIP) Program allocations to each of the six State maritime academies.  The eligible SIP students entering the SIP Program, called cadets, may be awarded Federal funding of up to $8,000 annually, not to exceed $32,000 in a consecutive four year academic period.  The SIP Program, is governed under 46 CFR 310.7, and is a voluntary program designed to assist cadets in defraying the cost of tuition, uniforms, books, and subsistence in return for a specific service obligation by the cadet / graduate."

To be eligible for the SIP Program a State maritime academy student must:

  • Be a U.S. Citizen.
  • Meet the physical standards specified by the U.S. Coast Guard (USCG) for original licensing as a merchant marine officer.
  • Be at least 17 years of age and not have passed their 25th birthday on the day of enrollment at the school.
  • Possess a secondary school education or equivalent, satisfactory for admission as an undergraduate to college under control of the State in which the school is located.
  • Meet the requirements established by the maritime academy in regard to secondary school grades, rank in graduating class, aptitude, achievement, and qualities of leadership.
  • Apply for, be offered, and have accepted Midshipman status in the Strategic Sealift Midshipman Program (SSMP) U.S. Navy Reserve (USNR).
  • Meet the physical standards of Department of Defense Medical Evaluation Review Board (DoDMERB) for Midshipmen status.
  • Be obligated to complete the Naval Science Curriculum at a SMA.


SIP incurs a separate service obligation to MARAD, under the Department of Transportation.  The MARAD service obligation is in addition to, and concurrent with the service obligation to the Navy.  If you apply and are selected by a SMA to participate in the SIP Program, you must sign a Service Obligation Contract (SOC) MA Form 890 and it must be approved by MARAD.  If under 18 years old, your parent or guardian must sign your contract also. When you reach 18 years old, you will sign the SOC again without a parent or guardian’s signature. The Contract obligates you to:

  • Use the student incentive payment to defray the cost of tuition, uniforms, books, and subsistence;
  • Complete the course of instruction at a SMA leading to a maritime related bachelor’s degree;
  • Pass the USCG unlimited license examination for a license as an officer in the U.S. merchant marine prior to graduation;
  • Maintain a USCG Merchant Mariner Credential (MMC) with a license endorsement and Standards of Training, Certification and Watchkeeping (STCW) endorsements.  
  • You must have a valid medical certificate, and a valid Transportation Workers Identification Credential (TWIC) for your MMC to be valid and each must be valid for at least six (6) years from the date of graduation;
  • Apply for an appointment as a commissioned officer in the U.S. Navy Reserve (Including the Strategic Sealift Officer Program, U.S. Navy Reserve), the USCG Reserve, or any other reserve component of an armed force of the United States.  If your application is accepted and a commission is offered, you must accept the appointment and serve for at least six years from the date of graduation and;
  • Maintain employment in the U.S. maritime industry for at least three years from the date of graduation in the following capacities:
    • As a merchant marine officer serving on U.S.- flag vessels;
    • As an employee in a U.S. maritime-related industry, profession, or marine science as determined by MARAD, if MARAD determines that employment under a U.S. flag vessel is not available;
    • As a commissioned officer on active duty in the armed forces of the United States or as a commissioned officer in the National Oceanic and Atmospheric Administration (NOAA) Corps or the Public Health Services;
    • By combining the employment options specified in paragraphs 1, 2 and 3 above.

The maritime-related employment option may be used only when the Maritime Administrator determines that sailing jobs are not available, and the cadet has shown that he/she has actively sought afloat employment.  MARAD must approve a SIP prospective graduate or graduate’s Employment Determination Request (EDR) form prior to beginning non-U.S. afloat employment or maritime ashore employment.

A representative at MMA, currently CDR C. McRae, USNR, within the Marine Transportation department, can explain the SIP program to you and will give you details on how to apply.  You will also be given a date when your school will stop accepting SIP applications.  After that date NO Applications will be accepted for that year.

After being accepted into the SSMP by the Department of Naval Science, and if you wish to apply for SIP, you will be directed to the SIP representative from MMA.  You will then begin processing the required MARAD application and paperwork.  Once you have been selected for SIP, the SIP representative will inform DNS Staff.

To be eligible to participate in the SIP program, you must be appointed as a Navy Midshipman.  MMA will select the cadets to participate in the SIP program via the SIP representative and forward their names to MARAD for final approval.  Prior to the beginning of your academic school year, you will be required to sign the following documents:

  • Maritime Administration Service Obligation Contract (SOC) for State Academy Midshipmen (MA Form 890);
  • Certification of Non-Delinquency on Loans or Other Accounts to the Fed. Government (MA-890 Addendum 1);
  • Certification of Compliance with Drug-free Workplace Act of 1988 for Grantees (MA-890 Addendum 2);
  • Application for the Student Incentive Payment Program;
  • U.S. Maritime Service (USMS) Enrollment Form (MA-1005);
  • The Application for the SIP Program (MARAD Letterhead);
  • Direct Deposit Form;
  • Enlistment or Reenlistment Agreement, Armed Forces of the United States (DD Form 4/1).

Once the academy forwards MARAD the above signed forms, you have completed all SSMP requirements, and passed the DoDMERB physical, MARAD can begin to process your enrollment into the SIP Program.

Your service obligation begins when you sign the MARAD Service Obligation Contract.  Your first SIP payment will be provided after you sign the above agreements in the first year, if you are processed prior to the academic year.  You may withdraw your request to participate in the SIP Program during the application process period, prior to completion of your second year, or prior to receiving your 5th SIP payment,  before incurring the service obligation.

Any Midshipman who has received SIP for 5 semesters and fails to complete the course of instruction at that academy may be immediately ordered by the Secretary of the Navy to active duty in the U.S. Navy in an enlisted capacity to serve for a period of time not to exceed two years, or MARAD may decide to collect the educational cost afforded those students in breach.

You are in breach of your service obligation contract agreement by failing to:

  • Complete the course of instruction (resigning from school after the fifth semester of receiving SIP);
  • Pass the USCG examination for a license as an officer in the U.S. merchant marine;
  • Maintain a license (valid MMC with license endorsement, STCW endorsement) as an officer in the U.S. merchant marine for at least 6 years from the date of graduation; Maintain a TWIC for 6 years;
  • Apply for and accept (if offered) an appointment as a commissioned officer in the USNR or any armed force reserve component and serve for at least six years from the date of graduation;
  • Maintain employment in the U.S. maritime industry for at least three years from the date of graduation.

If you decide to attend graduate school after graduation, you may apply for a deferment of your employment service obligation.  The State maritime academy must approve and make a  recommendation to MARAD.  MARAD may grant a deferment of  the employment service obligation for a period not to exceed two consecutive years, only for graduates considered to have superior academic and conduct records while at school, for the purpose of entering a marine or maritime-related graduate course of study at an accredited graduate school.  Your employment service obligation will begin from the date of completion of your graduate studies, but can not exceed two years.

An application for a deferment must be made through the Superintendent/ President of your school, who will forward your application together with his/her recommendation and an evaluation of your academic and conduct records, to MARAD for appropriate action.  All supporting documentation that describes the marine or maritime-related graduate program from an accredited school shall accompany your request.  MARAD will notify you of the action taken on your request.  Request for Deferment Forms may be obtained from MARAD.  Deferment of your employment obligation to attend graduate school does not defer your Navy Reserve obligation.  You must contact the SSOP Office directly, if you are requesting a waiver for your reserve service obligation.

Waivers of all or part of the service obligation may be granted in cases where there would be undue hardship or impossibility of satisfying the obligation due to accident, illness, or other justifiable reason as determined by MARAD.  Applications for approval of a waiver must be made to:

Maritime Administration
Maritime Workforce Development (MAR-650), Compliance Specialist
1200 New Jersey Ave.,  SE
Washington, DC 20590,

Request for Waiver forms may be obtained from the MARAD website.  You will receive notification from MARAD of the action status on your waiver request.  Waivers for your Navy Reserve obligation must be made directly to the SSOP.

After graduating from a SMA you will be required to submit an Annual Service Obligation Compliance Report to MARAD.  The Annual Service Obligation Compliance Report is normally required for a total of 7 years or until all components of your service obligation are fulfilled.  This report will include the following:

  • Your current address; and email
  • ​Your Reserve Commission status for 6 years;
  • Whether you renewed or upgraded your U.S. Coast Guard license, date renewed or upgraded, and
  • Your employment status for that prior year, required for three years.

Complete and submit your MARAD annual report electronically via the MARAD Maritime Service Compliance System (MSCS) through the internet using at the following website:  Any questions regarding your obligation or reporting contact the MARAD Compliance Specialist at or 202 366-7618.

The first report will be due to MARAD between January 01 – March 01, following your date of graduation, and annually thereafter between January 01 – March 01 until the fulfillment of all your service obligation.  If you have been granted a deferment of your obligation to attend graduate school, you must still report annually to MARAD, indicating that you are actively enrolled in graduate school.  At the completion of the deferment, which is a maximum of two years, you will be required to report to MARAD until the fulfillment your  service obligation.  The Maritime Administration Service Obligation Compliance Report may be obtained from the Maritime Administration if you are unable to enter the information via the above website.

*Students may participate in the Strategic Sealift Midshipman Program without receiving SIP, but in order to receive SIP you must be accepted into the SSMP and remain in good standing.

Must I apply for U.S. Navy SSO Midshipman status in order to be selected to receive Student Incentive Payments (SIP)?
Only those students who apply and are accepted into the Strategic Sealift Midshipman Program (SSMP) will be considered eligible for SIP.  The SIP Program is a Department of Transportation (DOT) Program that provides funding to SMA students.  The DOT Program is available to SMA students that want to be in the SIP Program and who pass the requirements, and accept the DOT MARAD service obligation.

How is SIP paid to participants?
The DOT MARAD SIP funding is currently provided at the beginning of each semester of the academic year to the account specified on the participant’s direct deposit form.  The total annual funding is $8,000, which is $4,000 each semester.  This is deposited directly into your bank account.

When does the enrollment period begin?
The SIP enrollment normally begins the Fall semester at each SMA, when you sign the Maritime Administration Service Obligation Contract and enrollment documents (including the SSO/USNR Agreement and Navy documents), and when it is approved by MARAD.  During the enrollment period, you will also be required to accept U.S. Navy Enlisted Reserve status and pass USCG and DoDMERB physicals.

What if I don't pass the physical examination given by the U.S. Navy  or USCG prior to the beginning of the academic school year?
Your SIP application will not be approved.  Only those Midshipmen who are physically qualified to participate in the SSMP and are able to obtain a USCG Unlimited Merchant Mariner Credential will be eligible for SIP.

What happens if I resign or disenroll from school during or after entering the fifth semester of receiving SIP?
The school will notify MARAD of your disenrollment/resignation.  MARAD will then review your record and the circumstances of the disenrollment / resignation to determine if you have breached your service obligation.  Voluntary resignation from school constitutes a breach of the service obligation.

Once I disenroll or resign from school, may I reclaim my SIP upon subsequent re-enrollment?
No.  Once you are disenrolled or resign from school, you may not reclaim your SIP upon subsequent reenrollment.  However, you may be granted a leave of absence without pay from the SIP program for up to one academic year, approved by the academy Superintendent or President, if you continue to meet all requirements for graduation, including age.

Once in the SIP Program at a SMA, may I transfer to another SMA and remain in the SIP Program?
Transfers will be reviewed by MARAD, after review and recommendations from the State maritime academies, on a case by case basis.  There is no guarantee of acceptance at another State maritime academy.

What types of jobs will satisfy the employment obligation once I graduate?
Your first obligation is to seek employment as a merchant marine officer sailing on U.S. flag vessels.  Any employment other than sailing on a U.S. flag vessel as an officer utilizing your Merchant  Mariner Credential (MMC), or active duty as an officer in the U.S. armed forces will require an approved Employment Determination Request (EDR) from MARAD prior to starting that employment.  The EDR form is on the MARAD website at