Now more than ever, limited federal student aid dollars must reach those who need it most. Particularly in tough economic times, people with education or training beyond high school not only make more money, but they also are more likely to find work. Yet, rising costs push college out of reach for more and more young people across the country.Undergraduate tuition rose 25% at private institutions and 37% at public institutions between the school years of 1999-2000 and 2009-2010 (adjusted for inflation).
The Federal Work Study Program (FWS) has the potential to help make a college education attainable for more young adults. It allocates $1 billion each year to colleges, which in turn subsidize jobs for 1.5 million students working their way through school. Ideally, FWS helps low- and middle-income students cover tuition, books, room, and board while providing valuable work experience.
However, the current funding formula fails to target the neediest individuals or properly incentivize colleges to prepare students for future employment. Instead it simply funds schools based on how long they have participated in the program. Expensive private schools also subsidize many relatively well off students. As a result, students from families earning over $100,000 per year receive greater FWS awards than students from families earning less than $40,000.
President Obama recently outlined a plan to double FWS grants to schools, but in exchange, the institutions would have to curb tuition growth, better target student aid, and increase graduation rates. In order to implement these goals, Young Invincibles recommends that Congress take the following steps:
- Eliminate the reward for longevity in FWS;
- Determine need for FWS based on a student’s income, not the school’s cost; and
- Strengthen the work experience requirement.
As long as Congress maintains funding for aid such as Pell grants, investing in and streamlining FWS can boost completion rates, increase student skills, and reduce debt levels. To read the entire brief, click here.