IRS pub970 says the only part of a fellowship which is tax exempt is that which covers tuition and fees. (see: http://www.irs.gov/publications/p970/ch01.html )
"Fees" do not include housing or living costs, even if we're living on campus. Housing is apparently not considered necessary for academic success.
You want us to get educated and drive this economy, then please stop making it even harder than it already is. Many of us, especially students who are single parents - even more so if we're in a STEM field with a ridiculous workload- are struggling to make ends meet while trying to better ourselves and contribute to the economy. Our fellowships barely keep most of us afloat and it's crazy to be taxing them.
Please consider giving us some relief here!