Decades ago, a young person could graduate from high school, join a company, and receive all the training on the job that she or he needed for a successful career. Today, the world is different. A young man with only a high school diploma now earns 75 cents on the inflation-adjusted dollar his father made in 1980. Even worse, a brutal recession and sluggish recovery has young people confronting double-digit unemployment rates. Fierce competition for entry-level positions requires our generation to not only acquire post-secondary education, but also gain on-the-job experience and skills. Approximately 79 percent of employers expect real-world experience from college graduates when they evaluate potential hires. Unfortunately, our higher education system is not built to meet this need, particularly for low-income students.
An updated Federal Work Study (FWS) program could help a great deal. Congress created FWS in 1964 as a part of the Economic Opportunity Act to allow low-income students to defer college costs by working while enrolled. In 2011-2012, the Department of Education allocated $972 million to over 3,000 schools, serving slightly more than 700,000 students. However, FWS could be more effective at serving those in need of financial support. Only 16 percent of institutions awarded Federal Work Study to every eligible student. During 2011-2012, only 16.4 percent of dependent students whose families make less than $20,000 received FWS aid, while 8.2 percent of dependent students with family incomes over $100,000 received FWS aid.
This report recommends reforming Federal Work Study to better serve low-income students working their way through school, and providing them with experience and skills for today’s economy.