The Pros and Cons of Participating in a Federal Work-Study Job
Since the 1960s, the term “Federal Work-Study” (FWS) has appeared in student financial aid letters, offering students an opportunity to help cover the costs of their college education.
However, despite existing for decades, the Federal Work-Study program has recently received a resurgence of attention as Congress looks to reauthorize the Higher Education Act, the federal law governing higher education, for the first time since 2008.
In particular, the changes to the program proposed by the Trump Administration are as follows: “Congress should reform the Federal Work Study (FWS) program to support workforce and career-oriented opportunities for low income undergraduate students, not just subsidized employment as a means of financial aid.”
Especially at a time when college costs continue to rise, national student loan debt sits at approximately $1.5 trillion, and employers are exhibiting a high demand for graduates with prior job-related skills, many individuals today are asking how their college can better assist them in becoming more employable.
“I think there’s sort of a search to better connect higher education to formalized work-based learning opportunities,” Iris Palmer, a senior advisor for higher education and workforce with the Education Policy program at New America, told The College Post. “I think part of that stems from the explosion in the cost of higher education, I think it comes from the explosion of debt in higher education, and a lot of anxiety around people who are shelling out this much money on how that’s going to connect to their future work.”
With the program currently on the minds of members of Congress, it is presumably on the minds of a myriad of college students as well, particularly in figuring out how participating in a FWS job might compare to taking on an off-campus job, internship or apprenticeship.
The College Post reached out to two higher education policy experts to hear their thoughts on this form of employment. Their overall consensus on the issue? The answer is not so cut and dry.
What is Federal Work-Study?
Before delving into the pros and cons of holding a work-study job, a few aspects of the program, as well as its background, merit attention.
Created by Congress as part of the Economic Opportunity Act of 1964, the Federal Work-Study program “provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay educational expenses,” according to the program website.
Upon its creation, the program assumed a type of dual mandate, not only helping students earn money to apply toward their collegiate expenses, but also presenting them with a chance to participate in work related to their area of study.
Under the program’s current allocation formula, the federal government first distributes funding to participating institutions. The institutions themselves are responsible for apportioning their funding to students with demonstrated financial need, determined by filling out the Free Application for Federal Student Aid (FAFSA). The school then matches at least 25 percent of the wages that students receive as part of the program.
While FWS money is offered to students as part of their financial aid package, receiving this funding is not guaranteed. Students still have to apply and interview for jobs, and if they fail to secure one, forgo the money they were offered.
Depending on any external partnerships their school has facilitated, students may apply to both on and off-campus jobs. Finally, they are guaranteed to earn at least the current federal minimum wage and receive their earnings directly, as opposed to being applied to their tuition bill, as stated in the program guidelines.
The Potential Benefits of Holding a FWS Job
In addition to the perk that work-study earnings, unlike other types of employment, don’t count against a student when filling out the FAFSA, some of the ultimate advantages that accompany work-study jobs center around convenience.
According to Palmer and Sandy Baum, a nonresident fellow in the Center on Education Data and Policy at the Urban Institute, on-campus employers may not be as demanding as off-campus employers, supporting student college completion rates more overall.
“For many students, what work-study does is it provides a convenient opportunity to earn some extra money on campus,” Baum told The College Post. “For some students, it’s much more important to have a flexible job on campus where if they have an exam they don’t have to show up, they get vacations off, and they don’t have transportation issues.”
Additionally, for students who do happen to obtain a work-study job related to their desired career path, the experience they gain from the position can be extremely relevant.
“I think there are some on-campus positions that really do translate and even connect to careers that students choose,” Palmer said. “So say I’m a communications major and I get a job in the enrollment or the recruitment arm of the institution. That seems like it would be a pretty good fit to what I want to do going forward.”
The Potential Downsides of Holding a FWS Job
While the convenience factor of work-study jobs may be a large draw for many students, a variety of possible cons should be taken into account as well when weighing these opportunities against other off-campus jobs, internships or apprenticeships.
First, while some lucky students do find work-study positions that contribute to their future career goals, many others can’t say the same, often getting stuck with bureaucratic work or more menial tasks.
“We know a lot of employment opportunities supported by Federal Work-Study on campus aren’t [connected to the careers students choose],” Palmer said. “Many of them are calling up alumni and trying to get them to donate and there’s a lot of doing administrative tasks.”
Second, since colleges themselves determine how much a student can earn over the course of a semester or year and how many hours per week they are allowed to work (typically not exceeding 20), for some students, work-study positions may not provide enough money to cover their total demonstrated need.
For example, according to Sallie Mae’s 2018 report “How America Pays for College,” the average work-study award for a student with an eligible job was $1,693. Therefore, in many cases, finding an off-campus position without a cap on earnings and hours may present a better option.
“Many students turn down work-study because then need to earn more money than they can earn through the program,” Baum said. “So again, the idea that a student should take a work-study job instead of another job, it’s going to depend on how much money the student needs to earn, what the student’s interests are, how convenient it is and how well it fits in with their studies.”
A final point for students to consider is that work-study funding is not guaranteed each year they are school. Because eligibility for the program is determined by a variety of factors, including how much money a school receives from the government, fluctuations in a student’s family income, whether a student took advantage of a previous work-study award, and when they submit their FAFSA, these factors can significantly dictate the amount awarded throughout their college careers.
How the Program Could be Restructured to Better Serve Student Recipients
Although the Federal Work-Study program operated with a budget of $1.13 billion in 2019, the Department of Education only requested $500 million to sustain it in 2020.
Considering the Trump Administration’s seemingly contradictory demand for the program to better support workforce and career-oriented opportunities while simultaneously asking to cut half of its total budget, “the administration’s proposal is dead on arrival,” according to Palmer.
However, while the FWS program is on the radar of the Department of Education, Trump Administration officials, and members of Congress, Palmer and Baum offered various ideas to restructure it to better serve future student recipients.
The first centers largely around the program’s allocation formula. In her report “Rethinking Federal Work Study: Incremental Reform Is Not Enough,” published by the Urban Institute in March, Baum goes into great detail on the current formula’s shortcomings.
Right now, money set aside for the Federal Work-Study program is distributed based on two formulas, a base formula and a fair share formula. Because these formulas are based on historical funding levels and the level of aggregate student need within a school, “funding goes disproportionately to institutions that enroll small shares of low-income students,” Baum writes.
“There’s the base formula which is all about the longevity in the program, and then there’s something called the ‘fair share’ formula which is supposed to fix that misallocation, but it is completely dependent on how expensive colleges are,” Palmer said. “Because of that, some of the largest allocations of Federal Work-Study are to colleges like Columbia, and NYU, and the University of Southern California, which are just not colleges that enroll a lot of low-income students and they certainly don’t need Federal Work-Study money, in my opinion.”
More specifically, echoing the calls of other researchers, Palmer proposed phasing all of the money allocated by Congress to the fair share formula, and capping the amount of cost of attendance to the 25th percentile of colleges, ultimately reallocating FWS money to reflect where low-income students in higher education actually enroll.
Another potential way to amend the Federal Work-Study program, proposed in the PROSPER Act which was approved by House Education Committee Republicans in 2017, involves eliminating eligibility for graduate students, opening up more funding and job opportunities for undergraduates moving forward.
In line with one of the program’s goals of providing work experience related to a student’s chosen academic major or career field, Palmer and Baum both also mentioned offering additional subsidies for students to support participation in off-campus opportunities like internships and apprenticeships.
Two avenues to achieve this, according to Palmer, could involve getting rid of the caps on the amount of each college’s FWS allocation that can go to for-profit employers, as well as increasing the subsidy rate for for-profit employers to match on-campus employment opportunities.
“Most people are going to end up getting jobs in for-profit employment after they graduate, and so I think it’s very important to structure a program that creates incentives for colleges to have better partnerships with those types of employers so they can help support students’ transitions into the labor market,” Palmer said.
As outlined in a past report by New America, the program could also be expanded and reformed to allow funds to cover the tuition and fees of student apprenticeship programs, giving students the chance to receive structured, on-the-job learning that they are paid for while they’re in school.
“What every country in the world that has a strong apprenticeship program has that we don’t have, is they systematically subsidize the tuition of the related technical instruction in the apprenticeship,” Palmer said. “So we think that for students that meet the definition of a student apprentice, that Federal Work-Study money should be able to go to subsidize their tuition.”
In future conversations about rethinking the program, Baum stressed the importance of incorporating a student’s perspective that ultimately, earnings from work-study positions are not financial aid, but something they have to work for to receive.
“We should not count these as financial aid in the sense that this is the student earning money,” Baum said. “This is a subsidy to the institution and it may cause institutions to provide more jobs, but from the student’s perspective, it’s work. It’s not a gift to them in any way.”