Can a fellowship be stopped suddenly? If not, why do PhD courses charge a fee?

Question

I've been considering a PhD, but the details of how it works confuses me. For example, this course charges 45K per semester as fees, but offers a monthly fellowship of 38.5K. Why do they even need to charge a fee then? Can't they just deduct it from the fellowship amount?
Also, if there's a fellowship, doesn't it mean that somebody is sponsoring the work? So if a full-time scholar is sacrificing a corporate job to solve a technical problem and comes up with a new discovery for someone, isn't this a service being provided? Why is the scholar being charged a fee then? It's like asking a mechanic to pay me when he discovers a solution to a problem with my car.

This institution seems to provide scholarships based on entrance exam scores. So as I understand it, unless a person has good scores, doing a PhD is a financial risk for approximately 5 to 7 years.

If a scholar starts a PhD with a promise that fellowship will be provided for 5 years, can the fellowship still be withdrawn before 5 years? Won't that put the scholar under financial duress? I'm asking these because before I choose to do a PhD somewhere, I need to know the financial risks.

I've seen this explanation, but the concepts are still unclear.

• A PhD scholarship is likely to be full-funding that isn’t attached to a specific project. Some scholarships are also more specific, perhaps being limited to a payment for fees or living costs, but not both.
• A PhD fee waiver removes the need for a student to pay for their tuition, but doesn’t cover living costs. Essentially this is a way
  for universities to offer partial funding by not charging you to
  study your PhD with them.
• A PhD stipend is a regular payment for living costs. It functions a bit like an annual salary, but is usually paid tax-free. It’s rare
  for a separate funding package to be referred to in this way, but
  full scholarships and studentships include a stipend.
• A PhD bursary is money paid to a student during a degree. If this is paid for living costs as part of a full-funding package it may be referred to as a PhD stipend (see above). Otherwise the term
  ‘bursary’ is used for more general funding.
• A PhD grant is a specific payment, usually made on a one-off basis in order to assist a student in carrying out research. It might be a substantial amount intended to provide all (or almost all) of the funding you need; or it might be paid for a specific purpose, such as research travel or the purchase of equipment.

Answer 1

This is a complicated question which depends on the country, university, discipline, and in some cases individual agreements.

Why do they even need to charge a fee then?

Here's a common situation for sciences:

1. Universities get grant money to conduct research. Often it comes from a government. The money can only be used for research purposes.
2. Universities use the grant money to pay students' tuition when they conduct research.
3. Tuition money can be used by the university for any purpose.

Universities are incentivized to charge themselves as much as possible for tuition so that they can convert restricted grant funds to unrestricted funds.

Why is the scholar being charged a fee then?

They usually are not. The funds are deducted from the research budget and not paid by the PhD student.

If a scholar starts a PhD with a promise that fellowship will be provided for 5 years, can the fellowship still be withdrawn before 5 years?

If you read the fine print of the contract/offer, it probably has a loophole which allows funding to be cut off.

Won't that put the scholar under financial duress? I'm asking these because before I choose to do a PhD somewhere, I need to know the financial risks.

Yes. Universities want a way to get rid of bad PhD students. Getting rid of bad PhD students hurts the university's reputation. If you are not a bad PhD student, your funding will only be cut off if:

• You are studying at a bad university or with a bad supervisor, in which case you should leave for somewhere better.
• Some external disaster takes away funding. This is a risk with any employer. Example: https://en.wikipedia.org/wiki/Effect_of_Hurricane_Katrina_on_Tulane_University