How Much Can You Earn With Federal Work Study?
Explore the earning potential of Federal Work Study. Get a comprehensive understanding of its financial structure and how it integrates with your student aid.
Federal Work-Study (FWS) is a federal student aid program designed to provide part-time employment opportunities for eligible undergraduate and graduate students. It helps students with demonstrated financial need earn money for educational expenses and gain valuable work experience. FWS encourages employment in positions related to a student’s field of study or involving community service.
What Federal Work Study Is
The Federal Work-Study program is a federal financial aid program administered by participating educational institutions. It provides students with part-time jobs to earn income for their education. The program is need-based, with eligibility based on a student’s financial circumstances rather than academic merit. While the federal government provides funding, individual schools manage the program and allocate funds to eligible students.
Work-study positions can be located on campus within various university departments, such as libraries, administrative offices, or research labs. Additionally, some opportunities exist off-campus with non-profit organizations or public agencies. These off-campus roles often involve community service, providing students with a chance to give back while earning wages. The program focuses on creating employment that complements a student’s academic schedule, ensuring that work hours do not interfere with studies.
How Work Study Funding is Determined
The process for determining a student’s Federal Work-Study award begins with the Free Application for Federal Student Aid (FAFSA). For the 2024-25 award year, the Expected Family Contribution (EFC) was replaced by the Student Aid Index (SAI) as the metric for assessing financial need. The SAI is an eligibility index number calculated from the FAFSA data, including family size, income, and assets.
A student’s financial need is determined by subtracting their Student Aid Index (SAI) from the Cost of Attendance (COA) at their chosen institution. The COA represents the total estimated cost of attending a particular school for an academic year, encompassing tuition, fees, room, board, books, supplies, transportation, and personal expenses.
Colleges receive a limited allocation of federal work-study funds each year, which they distribute among their eligible students. Therefore, even if a student demonstrates financial need, an award is not guaranteed due to funding limitations. The specific work-study amount offered to a student is typically outlined in their financial aid offer letter from the school. This amount represents the maximum a student is permitted to earn through the program during the academic year, not a lump sum payment.
How Work Study Earnings are Paid
Work-study earnings are paid directly to the student for hours worked, mirroring the structure of a regular job. Students typically receive an hourly wage for their work, which must be at least the federal minimum wage of $7.25 per hour, as established by the Fair Labor Standards Act (FLSA). However, if a state or local minimum wage is higher, the student must be paid the higher rate.
Earnings are disbursed through regular paychecks, commonly on a bi-weekly or monthly basis, depending on the institution’s payroll schedule. These wages are subject to federal and state income taxes, similar to other employment income. Students generally receive a Form W-2 from their employer for tax reporting purposes at the end of the calendar year.
A notable distinction for student workers is that their work-study earnings are often exempt from Federal Insurance Contributions Act (FICA) taxes, which include Social Security and Medicare taxes. This exemption typically applies if the student is enrolled at least half-time and their employment is primarily for educational purposes, rather than being a career employee. Importantly, work-study funds are paid directly to the student and are not automatically applied to tuition bills or other institutional charges. Students have the flexibility to use these earned funds for any educational or living expenses they deem necessary.
Work Study and Your Financial Aid
Federal Work-Study earnings are categorized as earned income, distinguishing them from gift aid such as grants or scholarships, which do not require repayment or work. While work-study provides financial assistance, it requires active participation through employment. For the current award year, work-study earnings generally do not reduce other forms of financial aid a student receives, including grants, scholarships, or loans. This means a student can earn money through work-study without negatively impacting their existing financial aid package.
A significant benefit of the Federal Work-Study program relates to future financial aid eligibility. When completing the FAFSA for subsequent academic years, a portion of Federal Work-Study earnings is typically excluded from income calculations. This exclusion can be advantageous as it helps maintain a student’s demonstrated financial need, potentially preserving eligibility for other need-based aid in future years. This unique treatment ensures that earning money through the program does not penalize students by reducing their overall aid eligibility in the long term.