Spotlight on Federal Work-Study: 4 Things You Need to Know About Student Employment

With continued debate in Congress around plans for a long overdue reauthorization of the Higher Education Act (HEA), policymakers have increasingly focused attention on possible updates to one of the oldest campus-based financial aid programs, Federal Work-Study (FWS).

Introduced as part of the Economic Opportunity Act of 1964, FWS was designed with the goal of providing low-income students with part-time jobs to help them pay for college expenses. The one billion dollar program serves over half a million undergraduate and graduate students each year by subsidizing up to 75 percent of students employees’ wages, which counts as part of their financial aid packages. The standard FWS award was once able to cover over 90 percent of the tuition and fees of an average four-year public institution. Over time, however, the ability of FW to offset college costs has weakened, and the average award of $1,550 per year now covers about 16 percent of tuition and fees at public four-year institutions.. Despite mainly maintaining bipartisan support for decades, the program is now facing greater scrutiny – for both its flaws and its potential – in a shifting postsecondary education landscape.

This post highlights four things to know about student employment as they relate to the Federal Work-Study policy debate.

#1: There are two key areas of proposed federal reform

Updates to the funding formula: Most policymakers seem to widely agree that the FWS program’s current funding distribution formula is inequitable and needs to better target low-income students. The two-part formula is composed of a campus “base guarantee” and a “fair funding formula”. Initially created in 1979, the base guarantee was intended to serve as a temporary solution to quell institutional concerns about how implementation of a new process might affect funding levels. The provision ensures that institutions receive 100 percent of the total funds they received in the determined “base year”, which has been adjusted over time and is now fiscal year 1999. By continuing to use an archaic formula based on historical participation in FWS, more funding goes to older, private institutions in the Northeast that enroll a smaller percent of low-income students than institutions in other sectors. One way to spot the inequitable pattern is to examine the percent distribution of federal aid funds by sector. A 2018 College Board report on trends in student aid shows that 34 percent of total Pell grant funds went to public two-year institutions and 16 percent went to private nonprofit institutions in 2016-17; conversely, only 18 percent of total FWS funds went to public two-year institutions compared to 41 percent received by private nonprofit institutions.

With the base guarantee accounting for approximately 67 percent of all funding, the fair funding formula allocates the rest of the funds based on the aggregate level of student need at an institution. If institutional need is greater than its base guarantee, then additional funds will be given to reduce the shortfall. Similar to the base guarantee, the fair funding formula is problematic in that it favors high-tuition institutions who tend to have large gaps between average estimated family income and cost of attendance but whose students may have more income than their counterparts at lower cost institutions. The “Opportunities for Success Act”, “Aim Higher Act,” and “PROSPER Act” all call for the elimination of the base guarantee as well as an increase in program funding levels as an effort to reach more low-income students.

Expanding eligibility to private sector: Another area for proposed reform is with expanding FWS eligibility to more off-campus, private sector jobs. Federal guidance about FWS states that a school must, “[t]o the maximum extent practicable,” provide jobs that “complement and reinforce each recipient’s educational program or career goals.” However, some argue that this expectation of FWS jobs falls short in reality. Recently introduced by Senators Kirsten Gillibrand (D-NY) and Pat Toomey (R-PA), the “Classrooms to Careers Act” focuses on changes to FWS that would allow students to work full-time for up to 6-months in off-campus, cooperative education programs. FWS jobs would be required to comply with the requirements of the Workforce Innovation and Opportunity Act. Some applicable requirements include aligning jobs with skills needed in state or regional industries, enabling students to obtain at least one postsecondary credential, and providing students with career or educational goal counseling. 

In May, the US Education Department announced plans to launch a new experimental sites initiative that will expand the use of FWS dollars to include private sector jobs that are not currently eligible under the program. The pilot initiative will remove the current law’s limit that institutions only use up to 25 percent of funds for off-campus, for-profit jobs, and it eliminates the requirement that seven percent of funds go towards community service jobs. ED plans to test the effectiveness of the experiment at improving student completion rates, work-readiness outcomes, and level of employer engagement by comparing results between similar groups of institutions and/or students.

Proposals that encourage institutions to spend a greater proportion of funds in the private sector rather than in on-campus or community service positions raise the question about whether certain types of FWS jobs are worthwhile for students and are able to prepare them for careers after graduation.

#2: Not all student employees are part of the FWS program.

Work-study is only one type of campus-based student employment opportunity. Colleges and universities typically fund student employment positions using a mix of institution-wide, individual department, and FWS funds. According to NASPA’s national research study on student employment, only 25 percent of public four-year institutions reported that program funding relies primarily on FWS dollars, compared to 36 percent of private four-year institutions and 67 percent of public two-year institutions. Moreover, some student employees may work multiple on-campus jobs that include a mix FWS and institution-funded positions, which can vary in structure, responsibilities, and conditions. Institutions and policymakers that intend to assess the delivery of FWS and its impact on students should analyze aggregate and disaggregate data that includes positions funded by both FWS and those solely funded by the institution. Such analyses should also hold other factors of the employment experience constant.

#3: Many FWS job options are intentionally connected to student learning outcomes.

While there are instances where schools can be doing more to deliver consistently high-quality employment opportunities to students, claims that most FWS options are irrelevant to student learning are largely oversimplified. There is little compelling evidence to suggest that students employed in FWS-funded jobs are not gaining transferable workplace skills, or that off-campus positions are more conducive to student success than campus-based opportunities.

Some institutions may offer FWS positions that have very obvious connections to a student’s career and may help with relevant technical skill development, such as a student with an accounting major working on campus as an accounting assistant. Other types of positions, however, can also offer immense value and career relevance for students when learning outcomes are clearly articulated and reinforced through professional development programming. Using the accounting student example, that same student could work in a campus library position and develop a variety of competencies that employers in the accounting field desire, such as systems management, organization, communication, and problem-solving skills. By having intentional conversations about learning and career goals, supervisors can help support student employee growth and tailor job responsibilities accordingly. Every student has a different circumstance that can make some positions more appealing than others, but on-campus FWS jobs should not be ruled out as viable options that can give students access to valuable learning opportunities and exposure to professional environments. 

#4: Student employment programs vary in opportunities and operations.

There is no single standard for what a FWS program looks like in practice. Some institutions may house the majority of student employment management functions out of a stand-alone office, while others might be in career services, financial aid, human resources, or spread out responsibilities across several services. Given the discretion granted to institutions about FWS program implementation, a variety of impactful, campus-level actions can be taken to elevate campus employment and promote student success. Meaningful change is happening on the ground at colleges and universities that policymakers should be mindful of as they consider the future of FWS.

NASPA’s research study of on-campus student employment found that when survey respondents were asked about the top three areas that their institutions want to invest in within the next three to five years, answers slightly varied by institution type. Respondents from public two-year institutions included “increase student employee hourly wage” in their top three selection, while public four-year institutions selected “data collection and analysis” and private four-year schools chose “increase number and quality of professional development opportunities for supervisors of student employees.” Each particular institution’s goals, context, and external environmental factors can influence the priorities and investment choices regarding student employment.

Institutions are finding innovative ways to design and manage FWS-funded positions to help maximize the benefits of campus employment for all students. Examples of supportive practices being embedded into campus programs include offering student employee orientation and handbook resource guides, requiring student employee-supervisor reflection on learning and feedback sessions, and embedding learning outcomes into job descriptions and professional development workshops.

As higher education administrators weigh in on FWS reform proposals, there may be opportunities for sharing of lessons learned and promising practices worth adapting and scaling on a national scale. Additionally, institutions looking to further develop improvement plans for their programs can use NASPA’s On-Campus Student Employment Self-Assessment Rubric to guide discussions and identify strengths and areas for focused attention.