Work-study for students and institutions alike is an invaluable program, especially given the high unemployment rates for college age students (some 15 percent of 18-24 year-old-students are still having a hard time finding work) and the unflagging rise in college tuition. As far as institutions go, a Financial Aid Director from a community college in Pennsylvania summarizes well the benefits of the program: “I’m a big fan of work-study. I’ve always referred to this program as win-win because obviously in a lot of our offices it’s help that we wouldn’t normally have and for the students, it’s a paycheck and experience. There are no losers in that.”
Therefore, President Obama’s 2013 budget request to increase funding for the Federal Work Study (FWS) program by 150 million (15% increase) and change the program’s allocation formula is not only timely but will also ensure that the funds target students with the greatest financial need.
In its current form, the FWS allocation formula does not give proper weight to the percentage of low-income students enrolled at an institution. Colleges enrolling the largest numbers of low-income students receive disproportionately lower amounts of FWS funding. Community colleges, which enroll the largest percentage of dependent students from modest backgrounds, received only 13 percent of FWS disbursements in 2007-08. Private non-profit four-year universities, which enrolled only 12 percent of students from low-income backgrounds in 2007-08, received 46 percent of FWS funds. The President’s Budget proposal would address this problem by changing the formula to “target and incent funding toward institutions that enroll and graduate relatively higher numbers of Pell-eligible students as well as offer lower tuition prices and fees (net price) and/or contain growth in tuition and fees.”
This proposed change to the funding formula may also incentivize institutions to give greater priority to students with the greatest financial need when allocating awards. Under current guidelines, financial aid administrators can award FWS amounts to students who demonstrate “financial need”, which is measured through the total cost of attendance minus the family’s estimated ability to pay. The very high cost of some institutions, however, means that even students from high-income families can have financial need. Not surprisingly, “fewer than half of undergraduate work-study recipients are needy enough to qualify for a Pell Grant, and 20 percent come from families earning more than $100,000 a year.” By targeting work-study funds to institutions that enroll and graduate higher numbers of low-income students, however, institutions may target work-study funds toward students with the highest need, especially since financial resources are a key barrier to completion for many low-income students and work-study can provide a vital source of income for them.
Finally, while many work-study positions provide valuable work-experience and skills to students, a large portion of work-study jobs are not related to students’ professional interests or emphasize the learning of new skills. The President’s Budget proposal, however, will help place more emphasis on skill development and link students to their professional field. In particular, the additional $150 million dollars would be directed to institutions that collaborate with employers to provide students with Work-Study opportunities that are meaningfully aligned with students’ academic programs and career aspirations. This is especially important since many low-income students cannot afford unpaid internships to gain work experience relevant to their field of study. A Demos’ forthcoming report on Federal Work Study program will engage with this topic at length.
So, President Obama’s Budget request to increase the number of work-study jobs and target them to students with the greatest financial need is a welcome and overdue development.