Workforce Development

Work Study and College Affordability: Time for a Closer Look

May 31, 2017  • Stanley S. Litow

The Future of Work Initiative seeks to highlight innovation, promote best practices, and foster debate around policies that address challenges facing the 21st century workforce. By featuring guest blog posts from experts, policymakers and business leaders, we seek to prompt deeper discussion about how to restore the promise of work in the context of a rapidly changing economy. Note that the opinions expressed in guest blog posts are the authors’ own and do not reflect the views of the Aspen Institute.

The discussion about college affordability these days has focused on reducing or eliminating tuition entirely. While a few states – notably New York through the Excelsior Scholarship – are making headway, the country has a long way to go to make college more affordable. Most people focus on Pell grants and loans when they think about tuition assistance. But there is another effective approach that dates back over half a century.

When President Lyndon Johnson championed College Work-Study 50 years ago, the program had a simple goal – to provide students with federally subsidized employment to help them pay for college. While working to help pay for college was not new, it was a new idea to use a federal subsidy to offset wages. Federal Work-Study appealed to a broad spectrum of legislators on both sides of the aisle, and the longevity of its bipartisan support has been a high point of President Johnson’s now-too-often-maligned Great Society. With the issue of college affordability more important than ever, perhaps it’s time to take a renewed look at Work-Study. This is especially important as work experience – especially the right work experience – can enhance a students’ ability to make the effective transition from college to career. For these reasons, it is important that we give Work-Study a refresh and bring it into the 21st century.

Federal Work-Study hasn’t changed much since 1965. Through the program, the federal government distributes nearly $1 billion annually to about 3,500 colleges and universities. These funds provide roughly 700,000 students with around $2,700 in wages to help pay for college. Schools get a 75 percent federal subsidy, which means they pay students only 25 cents out of every dollar for their work – quite a bargain for employers. But what is the real value of work-study jobs for students?

Total wages for Federal Work-Study jobs are quite low. The law mandates only that wages not go lower than the federal minimum wage, currently only $7.25 per hour. And most of the employers that benefit from this cheap labor are the schools themselves, where the overwhelming majority of Work-Study jobs take place – mostly in school libraries and cafeterias for low wages. The schools benefit from their students’ cheap labor, but the students miss out on opportunities to prepare for meaningful careers or even to earn decent enough wages to make a dent in their tuition. It’s time for this to change.

For starters, that $1 billion in annual federal funding could cover more students by splitting the wage subsidy evenly. Given the changes in the labor market since 1965, it is not a particularly heavy lift for employers to pay 50 cents on the dollar for work performed by Work-Study students. Next, Work-Study jobs should pay at least $10 per hour, and perhaps more. This higher wage would give the average student more than $4,000 per year to help with tuition, also to help with books and other expenses (which are often forgotten in the free tuition conversation). While employers would pay half of the increase in Work-Study wages, they would still pay only $5 per hour for student workers – quite a bargain. And this one change – under existing federal funding – could increase from 700,000 to more than one million the number of students who benefit from Federal Work-Study.

But perhaps just as important as raising wages is raising the value of Work-Study positions. We can, and should, broaden the employer base offering Work-Study jobs, which would improve the job-market relevance of the work and its link to post-graduation career opportunities. Entrepreneurs, large and small companies, social enterprises, not-for-profits, and governments should all be encouraged to offer Work-Study positions during the summer and part time during the school year, thereby offering students access to meaningful employment, mentors, and a link to subsequent career opportunities. This change would add a 21st century benefit beyond providing income to help pay college costs; it would help prepare students for today’s workplace.

Advances in technology could breathe new life into Work-Study, and raise its awareness among growth-industry employers. Online marketing could advertise and stimulate an increase in higher wages and higher-quality off-campus positions during both the school term and summer vacation. Students on a Work-Study assignment might even create a job-placement app for their fellow students. A digitally enabled Work-Study network could be beneficial to all stakeholders, including students, employers, and industry mentors. And the actual jobs could be structured – indeed, should be structured – to build students’ skills. Work-Study jobs could provide students with college credits (as many credit-bearing internship programs already do) to shorten time to graduation, and prepare students for post-college careers. Finally, instead of being subject to potential budget cuts, the initial success of these revisions to Work-Study would inspire legislators to invest even more in the program as it delivers even greater return on the federal investment.

America’s education programs must keep pace with the times. We’re already seeing breakthrough success in the P-TECH grade 9 to 14 model initially designed by IBM, which is connecting high school to college and career and is spreading across the US. And at the college level, we must take steps to ensure that our investment in America’s young people pays meaningful dividends for them and for the nation.

With youth unemployment at record levels while tens of thousands of well-paying jobs remain unfilled because of lack of skills, an updated approach to Work-Study could provide a “triple benefit.” First, greater employer participation would substantially increase the number of students who benefit from the program. Second, students would earn more to help pay for college, and owe less upon graduation. And third – and perhaps most important – an updated College Work Study program would increase the likelihood of larger numbers of students graduating college with the skills they need to enter well-paying careers. Higher earners would generate higher tax revenues, higher economic returns, and a greater societal benefit for us all.

Stanley S. Litow leads corporate citizenship and corporate affairs at IBM. Prior to joining IBM, Mr. Litow was deputy chancellor of the New York City Schools.