Reevaluation of federal work-study policy could mean changes to W&L program

Undergraduate and law students at W&L could be among those affected by the reallocation of federal funds

Gus Cross, Contributing Writer

The U.S. Department of Education program that funds over $1 billion for work-study programs in America’s colleges and universities is under scrutiny, with a measure currently in Congress to shift money to institutions with more low-income students.

Tim Powers, of the National Association of Independent Colleges and Universities (NAICU), is worried about what this might mean for small private colleges like Washington and Lee.

“What we don’t want to have happen is to re-slice an existing pie, and divvy up a pie in such a way that we have winners and losers,” said Powers. “We think the conversation should really be about making the pie bigger.”

The bill–known as the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act–appears to do both. Approximately $1.72 billion would be added to the Federal Work-Study program (FWS), but the total amount would also be distributed more to some kinds of post-secondary schools, such as community colleges.

But Powers said that even if this act becomes authorized as is, there is no guarantee that the full amount will be allocated during appropriations.

“The challenge is that just because you authorize a higher number doesn’t mean that when the appropriations committees are actually sending the money out that program will actually get that increase in spending,” he said.

A change in the formula is viewed by supporters as a solution–giving more funding to community and two-year colleges who are often presumed to have a greater number of low-income students.

David Baime, a policy analyst at the American Association of Community Colleges (AACC), said his organization has long been in support of FWS reform as the current formula does not support the needs of students.

“The question is, to what extent does the institutional allocation reflect the actual student need across the country,” he said. “These formulas don’t really reflect student need, and that is why we support changing them.”

Baime said the current formula protects funding for existing recipient institutions. A formula change would “unquestionably” create a better benefit for community colleges.

Additionally, if the PROSPER Act passes, the requirement of colleges and universities to dedicate at least seven percent of FWS funds to community service jobs would be eliminated.

The current FWS program often requires institutions of higher education to contribute up to 25 percent of FWS funds, the other 75 percent provided by the government. Often referred to as institutional match, under the PROSPER Act this local portion would increase to 50 percent.

The American Association of Collegiate Registrars and Admissions Officers (AACRAO) made estimates for how the new formula, along with the elimination of Supplemental Education Opportunity Grants (SEOGs), would affect over 3,000 higher education institutions.

According to information made available by Washington and Lee’s Office of Financial Aid, W&L students receiving some form of financial assistance are eligible for work-study positions, which exist in many administrative offices, academic departments and athletic programs across campus. In some cases, in compliance with the federal work-study program, students can also work off-campus for organizations benefiting the local community.

James Kaster, the director of Washington and Lee’s Financial Aid office, said the change will prevent Washington and Lee from continuing to receive funds based off of its allocation history.

The AACRAO estimates show Washington and Lee’s FWS funds have slowly been decreasing since at least the 2015-2016 school year. Under the new formula, Washington and Lee’s funds would continue to decrease by about $28,000 every year. The institutional match increase will add to the hurdle of keeping FWS at Washington and Lee alive.

“This won’t affect which students are accepted to Washington and Lee,” Kaster said. “It would mean the University would decide if it will contribute more to Federal Work-Study or revamp its institutional work-study program.”

Kaster said a revamp would set Washington and Lee back a few hundred thousand dollars, but not millions. He does predict if the PROSPER Act passes as is, Washington and Lee will most likely have to end its institutional summer work-study program for community service jobs, which provides funding for many law students.

Work-study for students during the academic year should be unaffected, he said, as eliminating the summer community service program would allow the university to redirect funds so there would not be any cuts to work-study funding in the academic year. The need for cutbacks during the academic year in the bill would mean many students could potentially transfer from FWS to institutional work-study funding.

With an endowment approaching $2 billion, the cost would not be as great as other institutions with much smaller endowments.

Powers said there is a large misperception that all independent, private institutions serve exclusively high-income students and are well-endowed. The reality is different. For one thing, the median endowment for a private non-profit college is $29 million.

“We have got the W&Ls and the University of Richmond[s] of the world that have larger endowments,” he said. “Most of our institutions are places that are tuition-dependent and very reliant on the ability to access federal funds that they can then leverage to get out to their students.”

The Prosper Act also proposes eliminating FWS funds for all graduate students. Washington and Lee law student Jacob Robertson will be working for a public defender office this summer. He said he is lucky because he will be receiving FWS funding because the public defender office will not able to pay him.

“Working for free for me is kind of a non-option,” he said. “Federal work-study is a really great program because it pays enough to let you, and requires you to, save a little bit of money for your loans for the next year.”

He said knowing he will be receiving funding removes a large burden. But, only so many law students are able to receive FWS funding for their summer jobs. Those that don’t receive it have to scrape together whatever funding they can find. Without any funding, working for a public defender office or a similar charitable organization would be extremely challenging.

“What you are being asked to do is devote 40 hours a week for 12 to 14 weeks for free while also paying to relocate, which often includes paying two different rents,” said Robertson. “It adds up quickly.”

Robertson said about a quarter of the law students at Washington and Lee work for large law firms that can pay their interns and some interns can make up to $30,000 in a summer. But some people are not interested in the private sector.

“If you are working in a branch of law that you aren’t very interested in, then you aren’t going to be a very good lawyer,” he said.

That is why Robertson thinks work-study funding is so important, because it allows law students to work for the firms they are interested in and do not have to worry about incurring debt.

The summary of the bill says it is “consistent with the President’s call to bolster effective workforce development program.” President Donald Trump’s education budget did propose an increase of FWS funding. However, it also called for a large decrease in the number of students receiving FWS funding by nearly 500,000.

The PROSPER Act does not mention reducing the number of FWS recipients but does follow Trump’s proposal to eliminate SEOGs. In theory, the money which previously went toward SEOGs would be reapplied to the FWS program.

“It is great that the intention is to take the money from some of these other programs that they are eliminating and put it into work-study,” Powers said. “But if they don’t actually do that, and they are just eliminating these programs and spending the same amount of money in work-study, then what have we actually accomplished than actually making college less affordable?”

The contingency between the PROSPER Act solely being an authorization bill and having no guarantee the appropriations committees in Congress will fully give out the authorized funds is a worry for NAICU.

“It is hard for us to get on board with these changes when a lot of our institutions would face significant hurdles and hardships if they somehow no longer had access to even a couple of thousand dollars,” Powers said.

But hope still remains for Powers and many other institutions who worry about what will happen with funding. On Friday, March 23, Congress passed an omnibus spending bill that authorized a large increase in funds going toward the FWS program, $140 million to be exact.

“Congress deserves a lot of credit for that and we are very appreciative of the willingness of Congress to look holistically at the benefit of these programs,” he said.

Powers said although the PROSPER Act leaves a lot of uncertainty for financial aid going down the road, Congress’s recent decision to give more to FWS and SEOGs speaks positively to their efforts to promote college affordability and accessibility.

“At the end of the day, if students can’t attend college, everyone will suffer. The economy will suffer. Individual families will suffer.”

This story was has been adapted from being reported during winter term as part of JOUR395: Reporting on Education.