Understanding Work-Study: How To Earn Money While Attending College

Financial aid for college makes it easier to pay for school. Aside from scholarships, grants, and student loans, you may be eligible for the federal work-study program. College students with financial need can qualify for the program, which offers an award amount you can earn with part-time employment.

In the 2021-22 academic year, there were approximately 431,000 federal work-study (FWS) recipients, according to a 2024 report from the National Association of Student Financial Aid Administrators. Getting a work-study job can help pay for expenses, but there are some nuances.

What is work-study?

Work-study is a type of financial aid that gives students with financial need the opportunity to work part-time. Through the federal work-study program, you're awarded an amount that you can earn through employment. The idea is to provide financial assistance through a job to help with your everyday expenses and offset costs, potentially reducing your need for student loans.

However, you're typically responsible for applying for and securing a position, which can be either on or off campus. Undergraduate as well as graduate students — whether part-time or full-time — may qualify for work-study if they demonstrate financial need. However, funds for the program are limited, and an offer of work-study doesn't guarantee you a position.

How does the federal work-study program work?

If you're interested in learning how to apply for work-study, you must submit the Free Application for Federal Student Aid (FAFSA). The main work-study eligibility requirement is financial need. Whether you're an undergraduate or graduate student, attending school part-time or full-time, if you demonstrate financial need then you may qualify for work-study.

It's best to submit the FAFSA early, and in the application, note that you're interested in federal work-study. If work-study is part of your financial aid package, you'll receive a specific award amount that caps how much you can earn overall. The amount you earn through work hours can't exceed that number. You'll be paid at least monthly, either by direct deposit or paycheck.

Work-study amounts vary by person and school. The amount is determined by factors like your family's income and size (if you're a dependent student) and your year in school. While you can earn up to that set amount, your pay rate depends on the job. Hourly rates start at the federal minimum wage but could be higher based on the position. Typically, the program recommends a position that would be a good complement to your studies.

If you don't get a part-time job through the federal work-study program or aren't interested in getting one, you forfeit that financial aid for the year.

Benefits of participating in work-study

Though it's not “free money” like grants or scholarships, work-study is a valuable type of aid. The benefits of work-study jobs include:

• Develop skills and experience: The federal work-study program can help you land a job, gain experience, and develop professional and time-management skills, which is a bonus if you have little-to-no work experience. After graduation, this can set you apart in your job search.
• Reduce reliance on student loans: One of the primary benefits of work-study jobs is that it reduces your reliance on student loans by providing employment opportunities and income. The money you earn may not be a ton, but it can cover small day-to-day expenses, which could allow you to borrow less. The lower the amount you borrow, the more you'll save in interest.
• Doesn't affect financial aid: One of the best benefits of work-study jobs is that the income you earn won't impact your eligibility for financial aid in future years.
• Convenient and flexible: Employers participating in the work-study program may be more flexible with your hours. Plus, you may find a job on your school's campus, which can make juggling school and work easier.
• Part-time work: To ensure you're not overextended while you're in school, all work-study jobs are part-time. How many hours you're offered depends on your school and role, but you could get around 15 to 20 hours per week.

How work-study affects your financial aid

While you should report the income from work-study on the FAFSA, the income you earn through the work-study program isn't included in your overall income that determines your aid. In other words, your work-study earnings won't be a factor in calculating your financial aid for the following year.

From a tax standpoint, the funds you earn through work-study are taxable at the federal and state levels. However, FICA taxes (Social Security and Medicare) aren't withheld while you're in school and working, as there's a student exception according to the Internal Revenue Service (IRS).

Work-study vs. traditional part-time jobs

Work-study jobs have some limitations in that there are only so many jobs, and there are funding limits. You could secure a traditional part-time job, but keep in mind that the money you earn through a part-time job is considered regular income, which could affect how much financial aid you receive in future academic years.

You may have more options and potentially earn more with a traditional part-time job, but it might reduce your eligibility for financial aid. When evaluating your job prospects while in school, consider how they can impact your aid, how much you can earn, the flexibility, and if they're related to your degree.