Does Work Study Affect Financial Aid?

Federal Work-Study is a program designed to help students finance their education through part-time employment. This federal student aid initiative allows eligible undergraduate and graduate students to earn money to cover educational expenses and gain valuable work experience.

Understanding How Work-Study is Awarded

Federal Work-Study is a type of financial aid that differs from grants or loans as it must be earned. The program provides funds for part-time jobs, typically on campus or with approved non-profit organizations. Eligibility is determined by a student’s demonstrated financial need, assessed through the Free Application for Federal Student Aid (FAFSA).

Colleges and universities include a Federal Work-Study offer as part of a student’s overall financial aid package. The award letter specifies the maximum a student can earn for that academic year. Students are paid directly for hours worked, usually through a regular paycheck, rather than funds being applied directly to tuition. This earned money can be used for various educational expenses such as books, supplies, transportation, or living costs. Schools ensure students are paid at least minimum wage, with the federal government subsidizing a portion of the wages.

Work-Study’s Interaction with Your Current Financial Aid Package

Many students are concerned about how accepting Federal Work-Study might affect their other financial aid for the current academic year. Work-study is designed to help meet a student’s calculated financial need and is already integrated into the total aid offer.

Accepting Federal Work-Study funds does not lead to a reduction in other aid components, such as grants or scholarships, for the current award year. Instead, it provides an opportunity to earn money that can lessen the need for student loans or out-of-pocket payments. Students are paid only for the hours they work, and if they do not earn the full awarded amount, the remaining balance is not converted into other aid.

Impact of Work-Study Earnings on Future Financial Aid

Federal Work-Study earnings are treated favorably when applying for financial aid in subsequent years. Unlike income from regular jobs, work-study earnings are excluded from income calculations on the Free Application for Federal Student Aid (FAFSA). This exclusion means the money earned through work-study does not negatively impact a student’s Expected Family Contribution (EFC) or Student Aid Index (SAI) for future aid eligibility.

When completing the FAFSA, students report their income, including any work-study earnings. The system is designed to identify and exclude these specific earnings from the calculation that determines aid eligibility. Educational institutions report the total gross amount of a student’s Federal Work-Study earnings to the Department of Education, ensuring proper accounting for the exclusion. This policy allows students to earn money to support their current educational costs without jeopardizing their eligibility for need-based financial aid in future academic periods.