>Is tuition reimbursement for faculty, when part of a benefits package, an
>allowable cost on federal assistance programs (grants/contracts)?

Yes.  A21 allows fringe benefits in the form of tuition or remission of
tuition for individual employees or their families, provided such benefits
are granted in accordance with established institutional policies, and are
distributed to all institutional activities on an equitable basis.
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Georgia Rothacker, Rochester Institute of Technology Research Corp.,
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