Should Student Employment be Subsidized?

By Betsy Prueter

A recently released study from the Community College Research Center at Teacher’s College looked at the effects of the federal work-study (FWS) program on academic and employment outcomes. Low-income students at public colleges benefit the most from the program but they are the least likely to receive FWS grants.

Among the major findings from the report:

  • Roughly 700,000 full-time, first-year undergraduates receive FWS grants each year but these recipients tend to be concentrated in private, four-year institutions.
    • 25% of students at private schools received FWS last year, compared to 6% of students at public colleges.
  • FWS offers some clear benefits to its participants, including increased likelihood of graduating and getting a job.
    • In fact, FWS participants are 3.2 percentage points more likely to earn a degree in six years and 2.4 percentage points more likely to be employed after graduation.
    • Additionally, FWS students have access to “better jobs”- meaning they are more likely to be on campus (so commuting isn’t an issue and scheduling may be more flexible) and are often tied to the student’s major field of study.
    • FWS students, on average, work fewer hours per week compared to working non- participants (11 hours compared to 18 hours).
  • The study did point to two drawbacks of the program. First, participants’ GPA dipped slightly in the first year (not enough however, to trump the graduation and employment effects). Second, FWS participants are much more likely to borrow money during their first year of college than similar students who were not in the program.
    • FWS participants carried a debt load after graduation that was $6,000 more than students who were non participants.
  • Despite the concern over the correlation between FWS and the likelihood of taking out student loans, overall, the FWS program does not appear to have substantial drawbacks.