How Does Federal Work-Study Pay?

Federal Work-Study (FWS) is a federal financial aid program that helps eligible college students earn money for educational expenses. It provides part-time employment, often on campus or at non-profit organizations, allowing students to gain valuable work experience while studying. Unlike grants or loans, FWS funds are earned through work performed, similar to a regular job, rather than disbursed as a lump sum.

Earning Federal Work-Study Funds

Students earn Federal Work-Study funds by working in approved positions, often on campus or with eligible off-campus employers such as public agencies or non-profit organizations. These jobs generally complement a student’s educational program or career goals, or involve community service. Undergraduate students are paid an hourly wage, while graduate students may be paid hourly or a salary. All FWS jobs must pay at least the current federal minimum wage, or a higher state or local minimum wage if applicable.

The amount a student can earn through FWS is limited by their specific award, determined by their financial aid package and financial need. Schools and employers monitor student earnings to ensure they do not exceed this awarded limit for the academic year. Once a student has earned their full FWS award, they cannot be paid further through the FWS program for that award year, though they might continue working in a non-FWS capacity if the employer permits. Work-study positions are part-time, with schools setting limits on weekly hours, often around 20 hours per week during class sessions, to balance work with academic progress.

Receiving Your Federal Work-Study Pay

Students receive their FWS pay directly, much like any other employee. The school acts as the employer responsible for issuing payments. Payments are distributed on a regular schedule, such as bi-weekly or monthly, rather than as a single payment at the beginning of the semester.

Most institutions offer direct deposit as the primary method for receiving FWS wages, which is a secure and efficient way for students to access their earnings. Physical checks may also be an option at some schools. Students set up their preferred payment method through the school’s financial aid or payroll office. Along with their pay, students should receive pay stubs or have access to online portals to review their earnings, hours worked, and any deductions. While FWS funds are paid directly to the student, some schools may allow students to authorize the direct application of these funds to their institutional accounts for billed expenses like tuition or fees.

Understanding Tax and Aid Implications

Federal Work-Study earnings are considered taxable income by both federal and state governments. Students will receive a Form W-2 from their institution at the end of the calendar year, detailing their total FWS earnings and any taxes withheld. Students may be required to file a tax return if their total income, including FWS earnings, exceeds certain IRS thresholds.

FWS earnings are treated favorably in future financial aid calculations. While FWS income is reported on the Free Application for Federal Student Aid (FAFSA), it is excluded from the income calculation when determining a student’s eligibility for federal student aid in the next academic year. This exclusion prevents FWS earnings from negatively impacting future financial aid awards. Earning FWS funds does not reduce other financial aid components, such as grants or loans, that a student has already been awarded for the current academic year; it serves as supplemental income. FWS earnings are exempt from Federal Insurance Contributions Act (FICA) taxes (Social Security and Medicare) if the student is enrolled at least half-time and the work is performed on campus.