What is Work-Study?

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Carlos Paniagua Emiliano
Carlos Paniagua Emiliano
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Edited by
Daniel Kahn
Daniel Kahn
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Daniel is the co-founder and COO at Sparrow. Daniel is responsible for the day-to-day operations of a company, working closely with other members of the executive team to develop and implement strategies to support the growth and success of the company.
Daniel was a 2023 Forbes 30 Under 30 lister in the Education category.  Daniel was born and raised in Raleigh, North Carolina and graduated from Duke University in 2020.
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Camden Ford
Camden Ford
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Camden leads Sparrow’s business operations – everything from product management to business analytics. After graduating Cum Laude from Duke University where he studied Civil Engineering, Camden worked as a Consultant for A.T. Kearney where he worked in their Strategic Operations practice. With a strong background in analytics, Camden strives to deliver data-driven conclusions and insights.

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Updated
February 1, 2024

There’s no feeling like the feeling of finally getting your financial aid package. Congrats!

As you’re going through your financial aid package, you might see something along the lines of “Federal Work-Study” and an amount attached to it. What exactly does that mean?

In this article, we’ll break down what federal work-study is and if it’s a good idea to accept it.

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What Is Work-Study?

Work-study is a federal aid program that provides part-time jobs to undergraduate and graduate students with financial need. While work-study aid won’t completely cover the cost of college, it can help you lower the amount you need to borrow.

Who is Eligible for Work-Study?

To qualify for work-study, you must demonstrate financial need, which is determined by the information you provide on the FAFSA. Both full-time and part-time undergraduate, graduate, and professional students are eligible for the work-study program.

That said, you may qualify for work-study but be ineligible to receive it if your school does not participate in the federal work-study program. Around 3,400 postsecondary institutions participate.

Additionally, receiving federal work-study aid in your financial aid package does not guarantee you a job in the program. The funds will only be available to you if you secure a work-study job through your college or university.

Jobs in the Work-Study Program

If you receive federal work-study aid, it is your responsibility to find a job within the program if you actually want to receive the funds. The jobs available will differ from school to school, although most schools offer both on-campus and off-campus opportunities.

Some common on-campus opportunities include working as a library assistant, a department receptionist, or as a cashier at your school’s dining hall. Some common off-campus opportunities include working for non-profit organizations and public agencies, providing support in a variety of areas. That said, the exact work-study job you take on will depend on what your college/university offers and what off-campus opportunities are available to you.

Remember, just because you received work-study aid in your financial aid package does not mean that you will automatically get a job. Some schools might match students with a job on-campus or off-campus, but most will require that you seek out these opportunities for yourself. You should speak to your financial aid office to learn more about what the process looks like at your school and what opportunities are available.

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How Much Does Work-Study Pay?

The amount of money you make through a work-study job depends on when you applied for work-study, your level of financial need, and the funds your school has for the work-study program.

That said, jobs under the work-study program will pay at least $7.25 per hour, per federal regulations. If the state minimum wage is higher, you’ll earn at least that amount. According to a 2020 report by Sallie Mae, the average work-study award was about $1,847 for students with an eligible job.

Keep in mind that in order to receive the entire amount of work-study aid you are eligible to receive, you must work enough hours to earn it. For example, if you received up to $1,847 in work-study aid, and the wage of your work-study job is $7.25 per hour, you will need to work around 254 hours total to earn the entire aid award. That said, some colleges and universities may cap the amount of hours you can work per week, often to ensure that students can balance their paid work and their classwork. If you have questions about how much you can work, reach out to your school’s financial aid office.

What Can You Spend Work-Study Aid On?

Unlike other forms of financial aid, you’ll be paid directly by check or direct deposit into your bank account. However, you can always opt to have the money credited into your student account to cover the cost of tuition or housing.

Regardless, there really isn’t a requirement to use your work-study funds for anything specific, so feel free to spend your hard-earned money on groceries or other expenses you need to cover.

Should I Accept Federal Work-Study Aid? 

Before accepting any aid, weigh out all the financial aid offered to you and accept it intentionally. When it comes to it, accept your aid in the following order:

Scholarships/Grants (free money) → Work-Study (earned money) → Loans (borrowed money)

Always accept loans at the end as they may be more costly in the long run with the accrued interest that will add up post-graduation. Work-study will at least give you an opportunity to fund your education by way of a steady job on or off-campus. The less money you have to borrow, the better.

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Frequently Asked Questions About Federal Work-Study

Is Work-Study the Same as an Internship?

No, work-study is not the same as an internship. While work-study is a need-based, federally-run program. Internships are often conducted by public and private companies and do not consider your financial need when hiring. Also, while work-study jobs are always paid, internships are often unpaid opportunities.

What are the Disadvantages of Work-Study?

While there are few disadvantages of receiving work-study aid, some of the commonly reported ones are:

  • Jobs may be scarce or competitive to receive.
  • Compensation may be lower than other non-work-study jobs on or off campus.
  • There may be a cap on the number of hours you can work per week.

Does Work-Study Count as Income on the FAFSA?

Work-study funds are considered taxable income, however, it won’t be counted in the calculations that determine your financial aid eligibility in future years. So, make sure to report earned work-study aid as income, but rest assured that it won’t count against you when filing the FAFSA in future years.

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Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 11/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require full
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Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.

2 – Cosigner Release

Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.

3 – Autopay Rate Reduction

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.

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Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.

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Student Loan Origination (Private Student Loan) Interest Rate Disclosure:

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.94% APR to 16.74% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.87% APR to 17.10% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan origination loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.
Earnest Private Student Loans are made by One American Bank, Member FDIC, or FinWise Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Finwise Bank, 756 East Winchester, Suite 100, Murray, UT 84107
Earnest loans are serviced by Earnest Operations LLC, 535 Mission St., Suite 1663 San Francisco, CA 94105, NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). One American Bank, FinWise Bank, and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America. © 2024 Earnest LLC. All rights reserved.
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(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.

(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.

(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. 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 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.

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Variable APR
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College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community 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.

(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.

(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.

(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. 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 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.

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To Wrap Up 

Sometimes, participating or not participating in the program might impact a student’s decision to attend a certain college/university. But, you’re taking an important step in trying to learn more about what your aid means before accepting it. Way to be proactive in your collegiate journey!

If you haven’t already done so, fill out the FAFSA as soon as possible. Filling out the form sooner might mean more work-study aid. When it comes to the federal work-study program, it’s important to reach out to your college/university’s financial aid office to determine what jobs are available.

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