NAICU Washington Update

UPDATED: Federal Work-Study Program Experimentation

June 24, 2019

**UPDATE (July 3, 2019)**
  1. The application deadline participate in the experimental initiative has been extended to September 23, 2019 (the previous deadline was July 8, 2019).
  2. The Education Department is hosting a webinar on this topic on July 11, 2019, from 1:30-3:00 pm (Eastern).

The U.S. Department of Education announced a new Experimental Sites Initiative (ESI) to allow institutions participating in Federal Work-Study (FWS) more flexibility to use that program to collaborate with industry partners. Institutions seeking a waiver from the traditional FWS requirements can apply to the Department to participate in the experimental initiative through July 8, 2019. More information regarding the application and submission requirements can be found in the Federal Register.

According to the Department, the ESI initiative proposes to allow colleges and universities to use their FWS allocations in four different ways:
  1. Removing limits on the portion of an institution’s FWS funds that may support students employed by private-sector companies.
  2. Increasing the number of hours per week an FWS student who is enrolled in a work-based learning program may work.
  3. Reducing the share of wages that must be covered by private-sector employers.
  4. Allowing institutions to pay low-income students for work experiences required by their program, such as student teaching and clinical rotations.

Current Law

Under current statutory and regulatory requirements, a school participating in FWS may use no more than 25 percent of its total current year initial allocations to pay wages to students employed with private, for-profit organizations. The ESI parameters would allow an institution to use all of its federal FWS allocation to support students employed by private-sector companies. 

Colleges and universities are also currently required to determine the number of hours a student is allowed to work based on the student’s financial need and on how the combination of work and study hours will affect the student’s health and academic progress. There are no statutory or regulatory limits on the number of hours per week or per payment period a student may work, provided no overaward occurs. 

For off-campus FWS jobs with private, for-profit organizations, the federal share of wages paid to students is limited to 50 percent. The for-profit organization must provide a nonfederal share of at least 50 percent. The ESI experiment would lift these requirements for small businesses, allowing a federal share of up to 75 percent of compensation.

Current regulations restrict students in FWS programs to part-time employment. The Department is proposing in its ESI experiment to waive these restrictions to enable full-time employment opportunities related to the student’s academic program (e.g., relevant apprenticeships, clinical rotations, or student teaching).

Job Location and Development (JLD) Program

The Department also proposes expanding the Job Location and Development (JLD) Program. The JLD Program locates and develops off-campus job opportunities for students who are currently enrolled in eligible institutions of higher education and who want jobs regardless of financial need. This means that jobs may be located and developed under the JLD Program for FWS and non-FWS eligible students. Currently an institution may use up to 10 percent of its annual FWS allocation, but no more than $75,000, to support its JLD Program. The ESI initiative proposes to allow participating colleges to request flexibility in its application, to be approved by the Department. No specific funding cap is specified in the Department’s announcement.

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