As you fill out the FAFSA each year, you may notice a question that asks whether or not you are interested in Federal Work Study (FWS). I never checked this box when I was in school, and to this day it remains one of my biggest financial aid regrets.
Just what is work study, and how can the Federal Work Study program help you pay for college or graduate school? Read on to find out.
Federal Work Study is a form of financial aid
What is work study, exactly? As opposed to scholarships, grants, and loans — which simply require that you meet the eligibility criteria and make satisfactory academic progress — work study requires that you work at a job, either on or off campus, to earn the money.
Like scholarships and grants (but unlike loans), work study is a type of financial aid that does not have to be paid back. Undergraduate, graduate, and professional students in financial need are eligible for the work study program.
Although the rules of the Federal Work Study program state that you can only work part-time, you are guaranteed to make the federal minimum wage, which is currently $7.25 per hour. Additionally, work-study aid is exempt from FICA taxes, which means that your paychecks will be bigger because Social Security and Medicaid taxes will not be withheld.
Benefits of Federal Work Study
In addition to decreasing the amount of loans that you will need to take out to pay for school, there are many additional benefits to the work study program. Here are just a few:
1. You’ll work in a job that interests you.
Unlike most federal aid, which is awarded directly to the student, work-study funds are given to institutions of higher education to be allocated at their discretion. However, one of the stipulations of the funds is that they should be used to provide jobs that are related to students’ courses of study.
For example, you might be assigned to work in the front office of the department of your major. You could also work off-campus in a job that relates to your course of study, depending on the relationships that your university has built with other organizations in your community.
This means your job will be relevant to what you are studying. Beats waiting tables or slinging coffee, doesn’t it?
2. Your employer is required to work around your school schedule.
While most part-time jobs allow you to indicate your availability, there’s no guarantee you’ll get your requested hours. Even worse, taking extra time off to study for finals or an important test could be frowned upon.
This could force you to decide between earning the money you need to pay your bills and doing well academically. Unlike many off-campus jobs, work study employers are understanding of your situation, and they will work with you to come up with a schedule that allows you to put in the hours you need while still succeeding in school.
3. The work takes place during normal business hours during the semester.
Because work study aid is awarded on a semester-to-semester basis, you will not be asked to work during holidays or school breaks. So if you want to go home to visit family between semesters or take the summer off to participate in an internship, you will not need to make separate arrangements with your employer.
Additionally, because most FWS jobs take place on campus, it’s unlikely that you will be asked to work in the evenings or on the weekends. Instead, you can tell your employer when you are on campus and put in shifts before, between, or after classes.
This allows you to use your time efficiently by reducing the need to commute and taking advantage of times when you were on campus anyway.
The downsides to federal work study
Although the work study program has many advantages, there are a few things you need to know in order to make the most out of this program.
1. Funding is limited.
Institutions receiving FWS funds from the government receive a set amount that is awarded on a first-come, first-served basis. Once a college or university’s funds for a particular academic year have been allocated, no more is available until the next academic year.
It’s extremely important to fill out the FAFSA as soon as possible so that you are at the top of your school’s list to receive these funds. If you wait too long, the funding may be given to other interested students, and you may miss out on aid you might otherwise have been eligible for.
2. You won’t make enough to live off of.
If you’re hoping to completely offset your cost of living by participating in this program, think again. You will almost certainly not be offered more than 20 hours per week. And even with FICA taxes withheld, $7.25 an hour is probably not enough to live off of.
Is work study for you?
The program is not designed to fully cover your cost of living. Instead, the aim of FWS is to reduce your student loan burden so you can pay them off faster after graduation, and to provide professional experience in a job that is related to your major.
I know of several students who went on to work for the university as full-time staff members after graduating as a direct result of the time that they spent in the federal work-study program. While it may not be a full-time job while you’re still in school, it can lead to full-time work after graduation.
If you are interested in reducing your student loan burden after graduation, check the Federal Work Study box on the FAFSA. It pays — literally!
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2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 5/18/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
3 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
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4 Important Disclosures for Discover.
Lowest APRs shown are available for the most creditworthy applicants.
5 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
6 Important Disclosures for Citizens.
Undergraduate Rate Disclosure: Variable interest rates range from 3.54%- 6.40% (3.54% – 6.40% APR). Fixed interest rates range from 3.79% – 6.65% (3.79% – 6.65% APR).
Graduate Rate Disclosure: Variable interest rates range from 2.72% – 6.11% (2.72% – 6.11% APR). Fixed interest rates range from 3.49% – 6.36% (3.49%-6.36% APR).
Business/Law Rate Disclosure: Variable interest rates range from 1.47% – 8.35% (1.47% – 8.20% APR). Fixed interest rates range from 4.45% – 10.74% (4.45% – 10.59% APR).
Medical/Dental Rate Disclosure: Variable interest rates range from 1.47% – 7.25% (1.47% – 7.10% APR). Fixed interest rates range from 4.40% – 9.64% (4.40% – 9.49% APR).
Parent Loan Rate Disclosure: Variable interest rates range from 3.09%-6.23% (3.09%-6.23% APR). Fixed interest rates range from 5.48%-8.52% (5.48%-8.52% APR).
Bar Study Rate Disclosure: Variable interest rates range from 4.79% – 9.93% (4.79% – 9.85% APR). Fixed interest rates range from 7.39% – 12.94% (7.39% – 12.82% APR).
Medical Residency Rate Disclosure: Variable interest rates range from 3.88% – 7.38% (3.88% – 7.04% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).
Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of May 1, 2020, the one-month LIBOR rate is 0.44%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.
Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
|2.00% – 10.01%*,1||Undergraduate and Graduate|
|1.49% – 11.98%2||Undergraduate, Graduate, and Parents|
|3.18% – 13.92%3||Undergraduate and Graduate|
|2.09% – 11.49%4||Undergraduate and Graduate|
|3.52% – 9.50%5||Undergraduate and Graduate|
|3.54% – 6.40%6||Undergraduate and Graduate|