A Research Experience for Undergraduates (REU) program is aimed at developing the students’ research skills and providing a high-quality mentoring experience. Based on this role, an REU student is considered a participant in a training activity, and funds for their support should be included as a stipend in the participant support cost section of the budget. The goal is to provide a practical educational experience for the undergrad student, rather than simply a job. Below are two resources that further explain the REU guidelines:
NSF Research Experiences for Undergraduates (REU)
NSF For Students