• Mike Bink, AAMS®, CCFS®

Using Work Study to Help Pay for College


Paying for college hasn't always been as complex as it is today, and the financial burden to families used to be much less than it is now, Once upon a time, today’s parents could earn enough money through summer and part-time jobs to make a serious dent in their college costs, but that is no longer the case. Today, many college graduates will spend decades of their adulthood paying off the debt they amassed during their four years on campus.


According to a recent Forbes study, students would need to work a whopping 2,438 hours to pay for just one year of college. That’s one full-time job plus a part-time job while enrolled as a full-time student. Even the most highly-caffeinated, valedictorian-caliber students couldn’t pull that off. So, how can students contribute to the cost of college without pulling focus from schoolwork? One option families can consider is the Federal Work-Study program.


What is Federal Work-Study?

Work-study is a federal program that provides part-time jobs for undergraduate and graduate students with financial need. It’s available to both full-time and part-time students who attend institutions that participate in the program. Most of the job types available in work-study are either community-service oriented or extensions of the student’s field of study. While the financial value of work-study awards vary, Sallie Mae’s 2020 “How America Pays For College” study found the average work-study payout was $1,847.


Though a modest number, consider this: for every $10,000 in student loans, a student will pay approximately $100 per month after graduation. By working part-time, they could contribute $1,847 per year towards their tuition, lowering their student loan amount by nearly $7,500. And unlike regular part-time jobs, work-study income is also exempt from federal and state income taxes (for students working less than 20 hours a week, the typical limit of work-study hours).


Does Work-Study Reduce the Cost of College?

NO!!! Tuition and housing costs aren’t reduced on the front end and payments are typically sent directly to the student at least once a month. If a student chooses to apply work-study payments directly towards tuition and other direct costs for school they certainly can. But to say that work-study “reduces the cost of college” is just wrong. You simply worked for those dollars while in school and can choose to contribute those dollars to your education. In actuality, the vast majority of students use that hard earned cash for walking around money.


If you are looking at work study or any part time work while in school, it is a way to pay for college. It does not reduce the cost of college and should only be included in your college funding budget if the funds will go towards paying direct college costs.


How To Qualify For Work-Study

To maximize your chances of getting awarded work-study, we encourage you to fill out the FAFSA as early as possible. When you do, be sure to check “Yes” on the work-study box to indicate your interest in the program. While work-study is listed on many financial aid award letters, jobs aren’t guaranteed for everyone, so applying as early as possible is key. Also, as soon as you get on campus, we encourage you to visit the financial aid office to find out about available work-study positions and the process for applying for them.


Work-Study vs. Regular Employment?

There are three compelling reasons why work-study may be a better overall deal than regular employment — beyond the fact that the money is tax-free.

  1. Wages earned from work-study are not included in student earnings assessed by the FAFSA. This allows students and their families to remain eligible for additional financial aid while continuing to earn tax-free work-study stipends.

  2. Work-study jobs are custom built to fit the individual student’s class schedule, so they’ll avoid the stress of juggling hours with a regular employer off-campus.

  3. Some work-study jobs can actually be wonderful additions to a student’s resume. If the job is related to their particular field of study (and future career), it could make them increasingly appealing to potential employers.

Final Thoughts

Work-study can be a great way for a student to help pay for the overall cost of college and prepare students for the workforce, but it does not reduce the overall cost of college. A college funding advisor can help you determine if you will be eligible for work study, and how it will fit into your family's strategy for paying for college. To learn more about what your family's costs of college will be, and what strategies you can use to lower your costs as much as possible, schedule a free call with our team today!

AUTHOR

Mike Bink, AAMS®, CCFS®

Mike works with families to simplify the college funding process and is widely recognized as an expert in college planning. He is passionate about empowering families to become informed consumers of higher education so that they don't pay a penny more for college than they absolutely have to.

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