How Much Does Work Study Pay and How Does It Work?
Understand the complete financial picture of federal work-study. Learn how this aid program empowers students to earn money for college.
Work-study is a federal financial aid program offering part-time employment to students with demonstrated financial need. It allows individuals to earn money to help cover educational expenses. This program provides an opportunity to gain work experience while pursuing higher education.
Determining Your Work-Study Eligibility and Award Amount
Eligibility Requirements
Eligibility for the Federal Work-Study program is determined through the Free Application for Federal Student Aid (FAFSA). Students must complete the FAFSA and indicate their interest in work-study to be considered for the program.
Award Calculation
Financial aid offices use factors such as the student’s Cost of Attendance (COA) and Expected Family Contribution (EFC) to determine the total work-study award amount. The COA includes tuition, fees, room, board, and other educational expenses, while the EFC represents what a student and their family are expected to contribute towards these costs. The work-study award represents the maximum amount a student can earn, not a guaranteed sum. Students typically receive notification of their work-study award as part of their comprehensive financial aid package.
Understanding Your Work-Study Pay Rate
The hourly pay rate for a work-study job is influenced by several factors. Federal law mandates that students earn at least the current federal minimum wage. If a state or local minimum wage is higher than the federal minimum, the higher rate applies.
Institutional policies also play a role in setting pay scales for work-study positions. The specific nature of the job, including required skills, responsibilities, and complexity of duties, can further impact the hourly rate. Undergraduate students are generally paid hourly, while graduate students may be paid hourly or receive a salary.
How Work-Study Funds Are Paid
Work-study earnings are paid directly to the student through a payroll system, much like a standard part-time job. Common payment methods include direct deposit into a bank account or a physical paycheck. Payment frequencies typically align with institutional payroll schedules, such as weekly, bi-weekly, or monthly. Work-study funds are disbursed directly to the student and are not automatically applied to tuition, fees, or other university charges.
Tax Implications of Work-Study Earnings
Work-study earnings are generally considered taxable income for federal income tax purposes. These earnings may also be subject to state and local income taxes, depending on jurisdiction. Students will receive a Form W-2 from their institution or employer detailing their total earnings and any taxes withheld for the year.
Students may need to file an income tax return, depending on their total annual income from all sources. While work-study earnings are taxable, students enrolled at least half-time and working on campus are typically exempt from Federal Insurance Contributions Act (FICA) taxes, which include Social Security and Medicare taxes. Students may also be eligible for education tax credits, such as the American Opportunity Tax Credit, if their work-study earnings are used for qualified education expenses.