Blog | 4 Min Read

The Value of Work-Study Federal Aid

ftr-woman-works-on-project

Paying for college wasn’t always such a burden. For one thing, it used to be considerably cheaper, even when adjusted for inflation. Once upon a time, today’s Generation X parents could earn enough money through summer and part-time jobs to make a serious dent in their college costs (if not pay for all of it). 

In fact, one parent — a cattleman — recently told us that he sold ten cattle to pay for all four years at The Ohio State University! How times have changed. 

Today, many college graduates will spend decades of their adulthood paying off the debt they amassed during their four years on campus. And unlike their parents, working a part-time job while at school will hardly move the needle in cutting down costs. 

According to a recent Forbes study, students would need to work a whopping 2,438 hours to pay for just one year of college. That’s one full-time job plus a part-time job while enrolled as a full-time student. Even the most highly-caffeinated, valedictorian-caliber students couldn’t pull that off. 

Part-time jobs aren’t what they used to be. So, how can students contribute to the cost of college without pulling focus from schoolwork? At College Aid Pro™, we encourage families to consider pursuing the Federal Work-Study program. Read on to find out why. 

Federal Work-Study: What Is It? 

Work-study is a federal program that provides part-time jobs for undergraduate and graduate students with financial need. It’s available to both full-time and part-time students who attend institutions that participate in the program — approximately 3,400 accredited colleges and universities, according to the Department of Education.

Most of the job types available in work-study are either community-service oriented or extensions of the student’s field of study. While the financial value of work-study awards vary, Sallie Mae’s 2020 “How America Pays For College” study found the average work-study payout was $1,847.

Though a modest number, consider this: for every $10,000 in student loans, a student will pay approximately $100 per month after graduation. By working part-time — and on a limited schedule approved by the school — they could contribute $1,847 per year towards their tuition, lowering their student loan amount by nearly $7,500. 

And unlike regular part-time jobs, work-study income is also exempt from federal and state income taxes (for students working less than 20 hours a week, the typical limit of work-study hours). Plus, as students advance in their academic standing, they can expect to earn higher hourly wages over the course of their education.

Want to see what your family might be eligible to receive? Use the FAFSA4caster to learn how much work-study income your college-bound candidate could be awarded.

Joe’s Soapbox!!

Does Work-Study Reduce the Cost of College? 

NO!!!  Tuition and housing costs aren’t reduced on the front end and payments are typically sent directly to the student at least once a month.  If a student chooses to apply work-study payments directly towards tuition and other direct costs for school they certainly can.  But to say that work-study “reduces the cost of college” is just wrong.  You simply worked for those dollars while in school and can choose to contribute those dollars to your education.  In actuality, the vast majority of students use that hard earned cash for walking around money.  

If you are looking at work study or any part time work while in school, it is a way to pay for college. It does not reduce the cost of college by any stretch and should only be included in your college funding budget if the funds will go towards paying direct college costs. 

How To Qualify For Work-Study

To maximize your chances of getting awarded work-study, we encourage you to fill out the FAFSA as early as possible. When you do, be sure to check “Yes” on the work-study box (Question 31) to indicate your interest in the program. 

While work-study is listed on many financial aid award letters, jobs aren’t guaranteed for everyone. In fact, according to a 2020 study, only 560,000 students received a work-study stipend last year.  In short, the money runs out!

As soon as you get on campus, we encourage you to visit the financial aid office to find out about available work-study positions and the process for applying for them. While some schools may place you directly in a job, it’s more likely that you’ll have to find the opportunities and apply/interview for them on your own time.

Work-Study vs. Regular Employment?

There are three compelling reasons why work-study may be a better overall deal than regular employment — beyond the fact that the money is tax-free. 

For starters, wages earned from work-study are not included in student earnings assessed by the FAFSA. Whereas regular employment wages will be subject to a fifty-percent assessment after the first $6,660 reported, work-study earnings are fully exempt. This allows students and their families to remain eligible for additional financial aid while continuing to earn tax-free work-study stipends. 

Secondly, work-study jobs are custom built to fit the individual student’s class schedule, so they’ll avoid the stress of juggling hours with a regular employer off-campus. And because most work-study jobs will be on campus ground, students will also save valuable time and money spent on commuting. 

Finally, some work-study jobs can actually be wonderful additions to a student’s resume. If the job is related to their particular field of study (and future career), it could make them increasingly appealing to potential employers. It also demonstrates that the student possesses excellent time management skills, and after all, students who work during college earn better grades

Getting Started

Work-study can be a great way for a student to help pay for the overall cost of college and prepare students for the workforce. But it does not reduce the cost of college.  

While it can be difficult to secure a work-study position, you can increase your odds by filling out your FAFSA as early as possible and communicating with your school’s financial aid office about any available positions.

Work-study, co-ops, part time work, and paid internships can go a long way towards paying for college as you go.  To find more free money for college, we encourage families to explore the over 5,000 private scholarships through the College Aid Pro™ Family Portal. 
Want to learn more? Click here to schedule a demo!