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Being smart about work-study at college

The following story is from the The Wall Street Journal

Federal work-study is one of the more commonly misunderstood components of financial aid.

But for eligible students, these part-time jobs can be an opportunity to borrow less for college and to gain responsibility and experience. Here are several points for families to keep in mind about the ins and outs of work-study.

Eligibility
Federal work-study jobs are available at participating schools for full-time or part-time undergraduate, graduate or professional students who demonstrate financial need. In the past few years, more than 3,000 colleges were allocated federal work-study funds, according to the Education Department. Each school sets its own criteria for need and how the money is apportioned.

How and when to apply
To apply for work-study, students need to complete the Free Application for Federal Student Aid, or Fafsa—the government form for financial-aid consideration—and should answer yes to the question: "Are you interested in being considered for work-study?"

Answering yes won't guarantee a position, but some schools will award work-study only to students who expressly indicate a desire for it. So it is best to say yes if there is any chance the student might want this type of position, says Karen McCarthy, director of policy analysis at the National Association of Student Financial Aid Administrators.

It is important to fill out the Fafsa as soon as possible. Schools that participate in work-study have limited funds to award to eligible students, and some do so on a first-come, first-served-basis. Students who have already submitted a Fafsa for the coming school year should contact their school's financial-aid office if they didn't indicate their preference on the form but want to be considered for work-study opportunities.

Federal work-study isn't guaranteed from year to year, so even students who were awarded this type of aid in the past need to go through the process.

Award particulars
Students who qualify will be notified in their financial-aid-award letter, which most colleges send around the same time as admission-offer letters. The amount offered is typically the maximum that can be earned through work-study for the academic year.

The total a student can receive each year depends on when the student applies for aid, the student's need and the school's funding level. In 2016-17, the average federal work-study award was $1,759, according to Education Department data.

Students don't have to accept an award, but experts recommend doing so unless they are absolutely sure they won't be using it. Students aren't always offered positions they like right away, but if they turn down the award prematurely there is a chance that money will no longer be available later in the year when more desirable opportunities may arise, Ms. McCarthy says.

Also keep in mind that work-study funds aren't distributed upfront to help students pay their tuition bill; students have to work to receive any money.

Finding a work-study job
Each school's work-study process can be different, so students need to make sure they understand their own school's rules.

For example, some schools direct students to a list of jobs, but leave it up to the student to interview and find the right one. Other institutions go a little further and help place the students in jobs, Ms. McCarthy says.

Students can also search for off-campus work-study opportunities, which aren't always as well advertised as on-campus jobs, says Abril Hunt, an outreach manager who focuses on financial literacy for ECMC, a nonprofit that helps students and families plan and pay for college. Also, if a particular job piques a student's interest, the student can always speak to the financial-aid office to see if it can be approved under the work-study program, she says.

How students get paid
Work-study students will be paid at least once a month, and they can arrange to have the money paid directly to them, deposited in their bank or paid to the school on their behalf. Students will earn at least the current federal minimum wage of $7.25 an hour; they may earn more depending on the type of work and the skills required for the position.

Schools set their own rules about how many hours students can work for these jobs. A rule of thumb is 10 to 20 hours a week, but that can vary. Some employers will continue to employ students privately even after they have exceeded their allocated work-study amount, but that depends on the employer.

Tax and financial-aid issues
Students with income levels that require them to file taxes have to report the earnings from their federal work-study on their income taxes. But those earnings don't count against a student when he or she applies for financial aid for the next year.

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