Issue Briefs

Federal Work-Study

The Federal Work-Study (FWS) program makes a positive difference for college students throughout the country. For the 2020 fiscal year, Congress has appropriated $1.2 billion to the FWS program to extend funding to nearly 600,000 students attending more than 3,000 institutions of higher education. 

Unlike other types of financial aid, work-study earnings are not applied directly to student tuition and fees. Students who are awarded work-study receive the funds in a paycheck as they earn them, based on hours worked. Typically, FWS earnings are meant to help with a student’s daily expenses and not meant to cover large costs like tuition and on-campus housing.

The Federal Work-Study program has been successful in helping students persist to graduation. In fact, researchers at Columbia University have concluded that FWS participants are more likely to graduate and get a job after college than non-participants.

However, there is a bipartisan proposal in Congress to redistribute campus-based aid funding, including FWS, away from smaller institutions in favor of larger institutions. NAICU has argued that existing FWS recipients should be held harmless and continue to receive their current allocations, while additional funding should not be distributed based on the size of the institution but rather the proportion of Pell Grant recipients that it serves.

About

The Federal Work-Study (FWS) program was established in 1964 to provide grants to low-income students in order to help them finance higher education through part-time employment. Since then, it has generated the opportunity for millions of American students to persist to graduation with lower debt loads. FWS is a “campus-based aid program,” meaning it is administered on the campus of each participating postsecondary institution. Institutions must match at least 33% of the funds provided by the federal government. The program enjoys broad bipartisan support on Capitol Hill.

“One Grant, One Loan” and Federal Work-Study

During the past few years, one of the more popular policy proposals being discussed on Capitol Hill has been the idea of moving to a federal financial aid portfolio consisting of “one grant, one loan.”  While the momentum behind the simplification of the campus-based aid programs into a "one grant, one loan" structure has slowed, it remains a top policy concern.

At the same time, the vast majority of those advocating a move to a simplified federal aid portfolio have also expressed support for the reauthorization of the FWS program. Many have gone so far as to rename the proposal “one grant, one loan, one work-study” to highlight the importance of FWS in any redesigned student aid system. While this elevation of the program portends good things for its future, it is imperative that funding be sustained at levels that can maintain—and preferably increase—participation in the program.

In 2019, the U.S. Department of Education announced a new Experimental Sites Initiative to allow institutions participating in Federal Work-Study more flexibility to use that program to collaborate with industry partners.

In conversations with elected officials:

  • Stress the positive impact that Federal Work-Study has on student graduation rates and post-graduation outcomes.
  • Highlight the campus-based nature of FWS. Many Members of Congress are not aware of the differences between campus-based and non-campus-based programs. Such an explanation could offer important support for efforts to preserve and expand the other campus-based programs (Perkins Loans and SEOG).
  • Thank them for their past support and advocate for sustained funding.

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