Tax treatment of NDSEG fellowship

Recipients of National Defense Science and Engineering Graduate Fellows receive the memo posted at: <https://www.asee.org/ndseg/upload / 2007-Tax-Memo.pdf>.
The line "As stated in the NDSEG Terms and Conditions, you are considered an independent contractor, and not self-employed, and are not employed by either the United States Government or ASEE." confuses me.
In particular, I am having trouble reconciling that statement with: "Schedule SE (Form 1040). Include amounts you receive under a scholarship as pay for your services as an independent contractor in determining your net earnings from self-employment. If your net earnings are $400 or more, you will have to pay self-employment tax. Use Schedule SE, Self-Employment Tax, to figure this tax" from Pub 970.
No particular service is required under the terms of the fellowship. The fellow simply must remain enrolled in an eligible graduate program. Given that, what does it mean to call the fellow an independent contractor?
My bottom line questions, I suppose, come down to (1) Does and NDSEG fellow have to pay self-employment taxes? (2) Particularly if the answer is "yes," would the fellow be eligible to file a Schedule C and deduct costs associated with his or her studies? More generally, how will NDSEG income be treated for federal tax purposes?
TIA
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TR wrote:

The NDSEG fellowship payments follow the same rules for any other fellowship that Congress has not provided for an exemption from taxes. As such, any amount you receive that is not used for qualified educational expenses is taxable income. Qualified ed. expenses include required tuition and fees to enroll and/or attend the school plus any other course related fees, books, supplies and equipment. Any amount not spent on the preceding is taxable.
The open question is whether the taxable amount is subject to SE tax or whether you just add the amount to Line 7 of your tax return with the designation SCH. As long as you are not required to provide services as an independent contractor, then the taxable amount is not subject to SE tax. The nature of the NDSEG fellowship is that certain fellows are required to perform services. These fellows would be subject to SE tax on any amount of a stipend paid for services. The memo informs these fellows that their employment is not as an employee or a part-time employee but rather as an independent contractor and is subject to SE tax. Note, that payment for services includes both past, present and any future obligation you might have.
You state that you were not required to perform services. Therefore, you report the taxable amount on Line 7 of your tax return.
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