Rethinking Federal Work-Study: Incremental Reform is Not Enough

Brief

Rethinking Federal Work-Study: Incremental Reform is Not Enough

March 21, 2019

Abstract

The Federal Work-Study (FWS) Program allocates funding to colleges and universities to pay a portion of the wages of student workers.  Republicans and Democrats have recently proposed adjustments to the allocation formula, which is based primarily on institutions’ historical participation in the program, rather than students’ financial circumstances. This change would reduce inequities but would not go far in addressing the needs the program is designed to meet. A new federal program should, without replacing other financial aid, support meaningful part-time employment for many more students than are currently served by FWS.

This paper reviews the structure and history of the work-study program and suggests goals policymakers should prioritize as they work to reform the program.

Program structure

Earnings from federal work-study are included in the financial aid packages designed to help students cover their expenses and can displace other aid. The program’s scale is small. The approximately $1 billion the federal government provides annually is only 3 percent of the amount it allocates for the Pell grant program—$28 billion in 2017–18. About 600,000 students participate in FWS, compared with the more than 7 million students who receive federal Pell grants.

Benefits and drawbacks

Evidence shows that federal work-study is most beneficial for postcollege employment when the jobs are related to students’ fields of study and that low-income students, students in public colleges, and students who would have taken other jobs especially benefit from program participation. But federal work-study jobs are no more likely than other student employment to be related to coursework. Most work-study jobs are, however, on campus, reducing transportation issues and facilitating schedules that fit well with academic commitments.

Financial aid does not meet the documented financial need of most students, and even it if did, many would find it necessary to work to make ends meet. Requiring low- and moderate-income students to work to earn a portion of their financial aid through the work-study program likely makes it more difficult for them to find the additional time necessary to meet these financial demands.

The inequity of the formula used to allocate federal work-study across institutions, which delivers funding disproportionately to institutions with relatively few low-income students, has prompted calls to adjust the allocation formula.

Recent reform proposals

Republicans and Democrats have recently offered proposals that would base funding allocation on institutions’ shares of aggregate Pell funding and on students’ financial need. This formula change would make the distribution of funds more equitable but would not eliminate the preference for higher-price institutions. 

Some proposals suggest modifying the types of jobs supported by FWS, but there is not adequate discussion of the fundamental question of whether this program is the most effective way for the federal government to support part-time employment for college students.

Conclusion

The federal government should rethink the way it supports college student employment. The number of students who would benefit from on-campus jobs or from employment related to their studies that prepares them for careers is far larger than the number currently covered by federal work-study. The federal government should develop a larger-scale program to direct incentives and resources to help colleges and universities provide these opportunities.

Fact Sheet

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