Federal Work-Study isn’t working

As conversations about the reauthorization of the Higher Education Act heat up on both ends of Capitol Hill, Congress should consider updating a program that could support low income students and help them explore careers. The Federal Work-Study program is currently not doing either task well.

Currently, Federal Work-Study money goes disproportionately to private, nonprofit colleges in the north east. While only 16 percent of students attend private, non-profit colleges, those colleges they receive 39 percent of the funding. 

The result is that one in four work study awards went to students who didn’t qualify for a Pell grant and attended a private nonprofit school. Graduate students also receive Federal Work-Study to the tune of over a hundred million dollars.

This is indefensible. Not only does it take the subsidy from those who need to most but higher income students don’t even seem to benefit much from the subsidy. Evidence shows that low-income students — the ones who would be working an unsubsidized job without the program — are the ones who see increased completion rates when participating in Federal Work-Study. 

About 80 percent of community college students work but only two percent receive Federal Work-Study. This seems like a lost opportunity to support the work experience and completion of community college students.

 Federal Work-Study also fails to connect students with jobs that help them gain experience in their chosen fields. Sure, on-campus jobs may help students learn general employability skills but we know that students with internships directly related to their work interests enter the labor market with a leg up. Unfortunately, many times low-income students can’t afford to take internship opportunities because they are low-paid or not paid at all. Federal Work-Study could help address that inequality, if students had the opportunity to get a job related to their major.

For the program to reach its full potential, we need to solve the misallocation of Federal Work-Study and help it connect students to careers. 

First, the misallocation. The three colleges with the largest allocations are New York University, Columbia, and the University of Southern California. Right now, one formula — the one that allocates the majority of the money — has little to do with serving low-income students. Instead, it rewards longevity in the program. Over time, we should get rid of that formula entirely. 

The other “fair-share” formula gives the most work-study funding to high-priced colleges. If we’re serious about using FWS to lower financial barriers for students, the funding should move entirely to the fair-share formula but the formula should cap the tuition and fees considered at the 25th percentile of all colleges so low-priced institutions, who serve more low-income students, get a fair allocation. At the same time, Federal Work-Study should also stop going to graduate students. 

According to a 2015 analysis by Robert Kelchen, an assistant professor at Seton Hall University, this change would increase the share of Work Study funds going to community colleges to almost 40 percent and decrease the percent going to private non-profits to around 14 percent, which is consistent with enrollment in these sectors overall. 

Colleges should also be encouraged to align these work experiences with what students want to do after graduation. One way to do this is to make work study flexible enough to support innovative types of work-based learning like apprenticeships. Apprenticeships provide a structured, paid pathway of mentored work experience with related classroom instruction. 

And while apprenticeship is currently not common in the United States outside of the building trades, this promising model is spreading to fields that require degrees like health care, finance, and education. Policy should support this spread by providing subsidies for apprentices’ tuition rather than subsidizing wages. 

Every country in the world with a robust apprenticeship system uses public funds to support tuition costs. Allowing Federal Work-Study money to cover tuition for students who are also apprentices would help scale these programs and, in the end, provide more pathways connecting students to the labor market. 

As Lyndon B. Johnson said when he signed the bill containing Federal Work-Study into law: “to thousands of young people education will be available…education is no longer a luxury. Education in this day and age is a necessity.” But for Federal Work-Study to fulfill this promise, it needs to focus on the students who need it most and be flexible enough to support innovative work-based learning opportunities. 

Iris Palmer is a senior advisor of Higher Education and Workforce Education Policy Program at New America.