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Using a work study to reduce student debt Thumbnail

Using a work study to reduce student debt

You’ve probably heard of students using a work study as an on-campus job to reduce the cost of college. Most kids don’t get jazzed up about the thoughts of an on-campus job. For some students, it may even trigger dark fears of washing dishes in the school cafeteria. What your child should know, however, is that federal work study opportunities operate a bit differently. They encourage work related to your student’s course of study as well as enriching community service work. More importantly, these jobs can serve a large role in cutting down your child’s student loans after college. So how do they work and how can your student apply?

Let’s start with the basics: Work studies are federally funded jobs that allow students to work part time while taking classes on campus. It’s a federally funded program, so the schools themselves are actually not the ones making the payment. Instead, the schools have the job of determining which students should be eligible to receive this federal work study award.

Financial aid offices classify work studies as “awards”, as they can be directly used to reduce the cost of college. The student will have the choice to be paid directly as an hourly wage, or direct the school to use the money to pay for things like tuition or room and board directly.

Work study awards are not eligible for every student. In fact, for your child to qualify, they must demonstrate that they have a financial need. While not all students will qualify, we highly encourage that all students apply. Student interest is indicated by checking a box when filling out the FAFSA financial aid form.

With the families that we work with, we typically encourage all students to express interest in a work study when filling out the FAFSA. Why? If your child decides against participating in the work study, they can simply turn down the award at a later date without penalty. Students that have been selected to receive a work study will receive indication on their financial aid award statement along with the other scholarships and financial aid grants that they may receive.

Why take it if your student receives a work study? We know that students balance a busy schedule with a full course load as it is. However, we’ve found that it’s a great way for students to earn work experience, help build out their resume and most of all help to kill off some of their debt post grad!

Our general rule of thumb: Think of every $10,000 of student debt as a $100 monthly payment coming out of school. Work study opportunities may only account to small chunks at a time in an overall debt load. However, for the student that earns $2,500 annually through work study positions, $100 extra per month can go a long way to helping them survive on their first job out of school.

Work study jobs themselves may be in a variety of fields covering anything from tutoring to administrative roles. While the lists vary by school, you should know that as a federally funded program, your child won’t be making less than the federal minimum wage (Currently $7.25).

For families fighting to reduce the cost of college, federal work studies are a great resource that otherwise may be left untapped. If you have questions regarding whether federal work studies may be a good fit for your child, feel free to reach out.


All the best,

Andrew Holmes, Certified College Planning Specialist™




Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.




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