Note: This is the sixth post in the Financial Aid Fundamentals series. Here we learn more about the federal work-study program, which helps thousands of students pay for college each year.
Lately we’ve been taking a closer look at the federal financial aid system and how college financial aid works. We’ve learned about the different types of federal student loans and the three major types of federal grants for college students.
Now we’ll look at the third and last type of federal financial aid: the federal work-study program.
Each year the work-study program employs hundreds of thousands of students who get valuable work experience while helping to offset the cost of college. Clearly, there are a lot of benefits to the federal work-study program.
In this post we’ll answer some basic questions about the work-study program, like:
- What is work-study?
- How do you apply for work-study?
- Who qualifies for work-study?
- How do you get a work-study job?
We’ll also go over some important work-study money facts, as this is very different from other types of federal financial aid.
The federal work-study program is a partnership between the federal government and colleges. The college usually pays half a student’s hourly rate and the government pays the other half. Under program rules, students must earn at least their state’s minimum wage or the federal minimum wage, whichever is higher.
Many work-study jobs are on campus, like working as an office assistant or in the library. Some are off campus, usually at nonprofit organizations.
How Much Does Work-Study Pay?
The amount you earn through work-study is based on your hourly rate and the amount of work-study you’ve been awarded.
Let’s look at an example. Suppose you’re awarded $2,400 in work-study for the academic year, which is $1,200 a semester. If you earn $8.00 an hour, that means you can work a total of 150 hours during the semester. So you’d work an average of 10 hours a week to make the full amount of work-study money awarded to you.
How Do You Apply for Work-Study?
As with all federal financial aid, you apply for work-study by filling out the FAFSA. And don’t forget: you have to file a FAFSA every year you want to get financial aid for college. If you want to keep your work-study position, be sure to file your FAFSA each year…the earlier the better.
Like some federal college grant programs, participation in the work-study program is voluntary: not all colleges and universities have work-study positions for students. Schools that do participate in the work-study program give out funds on a first-come, first-serve basis. That means students who file their FAFSA early are more likely to get work-study.
Who Qualifies for Work-Study?
Work-study is available to both undergraduate and graduate students. It is also available to both part-time and full-time students.
Work-study is a need based federal financial aid program, so your overall financial situation is taken into account when deciding whether you qualify for work-study. Need based programs do not rely on income alone, but it’s the biggest factor in determining whether you’re eligible for work-study, grants and some types of student loans.
How Do You Get A Work-Study Job?
Getting approved for work-study doesn’t mean you’ll automatically get a work-study job. Work-study jobs are limited, so you need to start looking for one early.
Some schools match students with work-study jobs, but most schools require work-study students to find and apply for jobs on their own. Your college financial aid or human resources office should have a list of available work-study positions.
Once you’ve found some work-study jobs you might like, you have to apply for them. You may have to submit a resume and professional references and have a formal interview. If you get approved for work-study, you should start preparing for the job search as soon as possible.
The work-study program encourages students to find jobs related to their major. If you already have relevant education and experience, you may be able to earn more. For example, if you have experience computer programming, then you may earn more at a work-study job that requires that skill. As with any job, be sure to highlight your relevant education and experience when you apply for work-study positions.
Important Facts About Federal Work-Study
Work-Study Aid Is Earnings
Even though it’s financial aid, work-study is like any other job: money you get through work-study is considered earnings and is paid directly to you, unless you tell your school otherwise.
Remember that under federal college grant and loan programs, your financial aid is first given to your school. The school uses this money to pay your tuition, housing (if you live on campus) and any other charges on your student account. Once all the money you owe the school is paid, your remaining financial aid is disbursed to you.
Under the work-study program, you’re an employee, so all of your work-study earnings are paid directly to you. You can use this money to help pay your tuition or you can use it for day-to-day living expenses.
If you want, you can tell the school to apply your work-study earnings to your tuition, but most students choose to receive their work-study money through a paycheck.
Work-Study Earnings Are Taxed
First the bad news: you have to pay taxes on money earned through work-study. Again, work-study is just like any job: you have to find the job, apply for it, get hired and pay taxes on your earnings.
Now the good news: money you earn through work-study doesn’t count against you on the FAFSA. Remember that income is the #1 factor in determining how much financial aid you can get. Usually if your income goes up, your financial aid is reduced. But work-study earnings aren’t counted, so you won’t lose any of your financial aid just because you earned more money.
Should You Use Work-Study to Help Pay for College?
The FAFSA income break is the major reason you should accept work-study if you’re approved for it. Sure, the work experience is also a good reason to use work-study, but the FAFSA break is really important.
For instance, suppose you turn down a work-study position and take a non-work-study job instead: not only will you still have to pay taxes on your earnings, but that income will count against you when you file your renewal FAFSA. Because your income has gone up, you’ll probably get less grant money or federal subsidized loan money.
When you’re deciding whether to accept a work-study award, you need to weigh the implications for your future financial aid. You might earn more at a non-work-study job, but that could end up reducing your total aid, forcing you to take out more loans to pay for school.
What Happens If You Turn Down Work-Study?
You should know that it’s really hard to get work-study if you’ve turned it down in the past. If you’re offered work-study one year and don’t take it, you may not be offered work-study again in the future, even if you meet eligibility requirements.
The bottom line: a work-study job won’t make you rich, but you need to think really hard before turning down a work-study offer.
Have a question about work-study? Financial aid? Planning for college? Drop me a line in the comments and I’ll get back to you.