How Work-Study Programs Work

The Federal Work-Study Program (FWS), formerly known as the College Work-Study Program, was first established as part of the Higher Education Act of 1965. It provides funding to pay full-time college students who meet financial eligibility requirements for part-time employment. The money they earn is then used to finance their college educations. More than 3,400 institutions of higher learning participate in the Federal Work-Study Program, and about 7 percent of all undergraduates participate in a Work-Study Program, receiving an average of $2,400 each year [source: U.S. Department of Education].

Congress allocates money for the Federal Work Study Program. In 2009, more than $980 million was allocated as regular funding, then $200 million was added to the Federal Work-Study Program as part of the Recovery Act. In total, more than $1.4 billion is available through the Federal Work-Study Program when institutional or state matching dollars, plus private or federal loan capital, is added [source: U.S. Department of Education]. Money is allocated to each school depending on the number of students demonstrating a need, and the financial aid departments at individual institutions have a great deal of freedom in deciding how to distribute this money to the students.

All sorts of jobs are available to students who qualify for the Federal Work-Study Program. Most of these positions are on campus at the school and include positions such as lab assistant, clerical help and cafeteria worker. These jobs don't have to be related to the student's major. Other jobs are community service positions that are off-campus. The government requires that community service jobs be a part of the Federal Work-Study program. Some schools have agreements with outside for-profit companies for work-study jobs -- these jobs must be relevant to the student's course of study.

The money is allotted for each student, and then the student must work in a job in order to receive it. Most jobs pay federal minimum wage, and the school issues the paychecks. Students are paid by the hour. The checks may be deposited in the student's bank account, or the student may opt to have any earnings directly applied to school costs. Students' earnings cannot exceed their total Federal Work-Study award.

Qualifying for the Federal Work-Study Program is based on financial need as determined by government standards. In the next section, we'll look at what it takes to earn the opportunity to participate in a work-study program.

The Federal Work-Study Program is a need-based program of financial assistance. Students must complete and submit the Free Application for Federal Student Aid (FAFSA), which we'll discuss at length in the next section. Congress sets the criteria for determining financial need. That formula takes into account the information submitted on the FAFSA and also the expected family contribution (EFC).

Determination of financial need is based on these factors:

The EFC is figured by adding two things:

The formula varies depending on the student's living situation (living with parents, independent without dependents or independent with dependents). Your earnings from the work-study program will not count as income.

Applicants for the Federal Work-Study Program must be a full-time student at an institution of higher education or have been accepted as a student. The program is not limited to colleges; vocational schools often have Federal Work-Study Program money available. Graduate students can take advantage of the funds, also.

Next, we'll take a look at what you need to do to make sure you get your share of this money, including how to hedge your bets even if you're not sure work-study is for you.

Filling out and filing the government's Free Application for Federal Student Aid (FAFSA), which you can find online, is the first step in applying for the Federal Work-Study Program. This application serves as your entry to all forms of federal student aid and will screen your eligibility for grants and loans as well. Go ahead and check that you're interested in work-study, even if you're not sure. It's easier to decline the opportunity after you've been approved than it is to get approved for the program later. Within a week after submitting your FAFSA, you or your school will receive a summary of your eligibility, including your EFC. If you qualify for any financial aid, then you're eligible for the Federal Work-Study Program. Your FAFSA award letter will include the amount for money you're allowed to earn.

Remember, you'll have to file a FAFSA each year for continued participation. The FAFSA forms are updated each January for the coming academic year. Keep up with the deadlines for filing. You're also allowed to file amended forms if your financial status changes. Grades aren't a factor in your continuing eligibility for work-study -- as long as they're good enough for you to stay in school, they're good enough for you to remain in work-study.

Once you've been approved for a work-study program, your school will have its own procedure for hiring. Most schools will e-mail you about lists of jobs that are available to work-study students, and you can apply from there. Hiring isn't automatic; you'll probably have to go through an interview just like any other job. Your school may have additional forms for you to complete at this point. After you're hired, you'll need to monitor your hours in order to ensure that your earnings don't exceed your grant. Let your employer know before this becomes a problem. Remember that this is a real job -- you can be fired from a work-study job, so it's in your best interest to perform well.

From all accounts, participating in the Federal Work-Study Program is a win-win situation for students. You'll earn money for school, make friends with your fellow students and forge alliances with professionals who could help you in your future career. What's not to like?

For lots more information on financial aid for school, see the links on the next page.