In July, NASFAA’s Campus-Based Allocation Task Force released a report with recommended changes to the allocation formula for Federal Work-Study (FWS), among other campus-based aid programs. In a new report out this week, policy organization Young Invincibles (YI) takes a similar look at the formula behind the decades-old financial aid staple.
“Federal Work-Study has allowed students to gain experience and assistance in paying for their college education for over fifty years,” YI says in “A Federal Work Study Reform Agenda to Better Serve Low-Income Students.” “Despite this success, FWS needs restructuring to better serve low-income students.”
In the report, YI outlines five steps it thinks could improve the program:
The current allocation formula inhibits new institutions from receiving significant FWS funding and leads to disparities among private and public colleges, YI argues.
“The existing formula limits the ability of the federal government to target funds effectively to institutions,” YI argues. “Institutions with higher costs of attendance generally receive more FWS dollars than those with lower costs of attendance, regardless of the amount of low-income students enrolled.”
YI’s proposed formula eliminates the current base guarantee and fair share structure and instead, “rewards institutions that enroll and graduate Pell eligible students in proportionally high numbers,” according to the report. It would begin with a ranking of institutions based on graduation rates of Pell recipients (an issue U.S. News & World Report has separately begun to examine), and would hold schools to various requirements to remain eligible for funds. The proposal would also eliminate graduate students from FWS eligibility.
YI’s proposed formula would most benefit community colleges, according to the report, which notes that under the current formula, those institutions receive 16 percent of FWS funding.
NASFAA’s task force also recommend retooling the FWS allocation formula by eliminating the Base Guarantee, which creates an “inequitable” situation, “because growing schools, serving needier student populations, cannot increase their funding because other institutions’ funding levels are largely protected,” its report states. The NASFAA task force recommendation would allocate all FWS funds on the basis of the current fair share formula.
For more on FWS, take a look at how the program has shaped the careers of many NASFAA members, and share your thoughts on the program’s past and future in the comments section below.
Publication Date: 9/23/2014