A Federal Work Study Reform Agenda to Better Serve Low-Income Students

A new report from Young Invincibles, A Federal Work Study Reform Agenda to Better Serve Low Income Students, highlights the new reality for college graduates: 79% of employers expect real world experience when they evaluate potential hires. The report recommends ways that Federal Work Study (FWS), a federal program that provides low-income students with part-time jobs as one element of their financial aid packages, could be of help in addressing this problem. The report argues that not only must the program make revisions to the current allocation formula but it must also ensure that its jobs are career-related. Among the report’s other findings:

• Because 67% of FWS funds are currently guaranteed to institutions based on a 1999 calculation and the rest are distributed through a “fair share formula” based on institutional need, older and more expensive institutions (often four-year not-for-profits) receive more FWS dollars than newer institutions with lower tuition (often two-year institutions).
  • During 2011-2012, 16.4% of dependent students from families with less than $20,000 of income received FWS while 8.2% of dependent students from families with incomes over $100,000 received FWS.
• Federal law stipulates that all FWS positions must be related to the student’s educational goals to the “maximum extent possible.”
  • A recent study found that more than 80% of FWS recipients work on-campus in jobs that are unrelated to their majors or career interests. Forty percent are clerical positions.
• According to student surveys conducted by Young Invincibles, students want their work study jobs to be as valuable to their future careers as internships.
  • One barrier to funding internship-quality FWS jobs is the programs cap on the percentage of a student’s wages earned at a for-profit organization (often the type of organizations/businesses who offer paid internships) paid by the federal government (50%). Institutions must supply the other 50% from their own funds.
• The report recommends the following to help increase low-income students’ access to FWS jobs and to make FWS jobs more career relevant:
  • Implement a new distribution formula focused on enrolling, serving and graduating Pell recipients in proportionally high numbers. Institutions with a low percentage of Pell students and/or with a low success rate of graduating Pell students would receive a reduction in or an elimination of FWS funds.
• The report suggests this would result in an elimination of FWS to 1/3 of schools currently receiving funds and would increase funding at community colleges by 261%.
  • Promote FWS as a career-ready program and improve the quality of jobs offered by the program through expansion of the federal Job Location Development Program (JLD), a federally funded program designed to pay students for working off campus in “real world settings.” This would include setting a percentage of JDL jobs aside for Pell and need-based aid recipients.
  • Create a Career Internships Program within FWS that allows FWS to pay 75% of internship wages and allows employers and institutions to determine if an internship falls within a student’s “course of study.”
• Require institutions with FWS to maintain at least 25% of FWS jobs within the “course of study.”
• Remove the 25% limit on use of FWS funds for for-profit jobs.