What Happens to Unused Work-Study Money?
Clarify how Federal Work-Study awards function. Understand what happens to unearned funds and their impact on your overall financial aid package.
Federal Work-Study (FWS) is a program designed to help eligible students finance their education through part-time employment. This form of financial aid allows students to earn money to cover various educational and living expenses, often through jobs located on campus or with approved off-campus organizations.
Understanding Work-Study Awards
Federal Work-Study is distinct from other forms of financial aid because it represents an opportunity to earn money, rather than a direct payment. Unlike grants or loans, work-study funds are earned through employment. The amount listed in a student’s financial aid offer signifies the maximum amount they are eligible to earn through work-study employment for a given academic year.
Students with financial need, determined by information provided on the Free Application for Federal Student Aid (FAFSA), are considered for work-study. Once awarded, students must secure an approved work-study job and work hours to receive their funds. Payments are made directly to the student. The hourly wage for work-study positions must be at least the federal minimum wage, and sometimes higher, depending on the job’s requirements.
What Happens to Unearned Work-Study Funds
If a student does not earn the full amount of their Federal Work-Study award, the unearned portion is simply not disbursed. The money is not converted into other aid or made available in any other form. The awarded amount is an earning ceiling, not a guaranteed sum of money that automatically becomes available.
The funds that are not earned by one student are generally reallocated by the institution, often to other eligible students who may need additional work-study opportunities. It is not a case of money being “lost” or “taken away” from the student, as the funds were never actually provided until hours were worked. Therefore, if a student works fewer hours than needed to reach their maximum award, the difference represents the unused portion of their earning potential within the program.
Work-Study and Your Financial Aid Package
Not earning the full Federal Work-Study award does not negatively impact other components of a student’s financial aid package. Grants, scholarships, and federal student loans already disbursed or committed for the current academic year are unaffected. This is because work-study is earned income, meaning funds are received only for hours worked, unlike other aid types which are awarded and disbursed based on enrollment and eligibility criteria.
Choosing not to utilize the full work-study award in one academic year does not affect a student’s eligibility for work-study or other financial aid in future years. The FAFSA does not count work-study earnings as regular income for subsequent years’ aid calculations, a notable program benefit. This ensures work-study participation in one year does not jeopardize future financial aid.