Federal Work Study as an Ever Decreasing Percentage of Tuition

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It’s rarer than ever to hear someone say “I worked my way through college.” With  tuition rates rising at nearly double the rate of general inflation, a student working under the Federal Work Study Program cannot realistically make a substantial dent in the tuition bill, let alone have money left over to pay the sum of room and board, books, a laptop, and minimal spending cash.

The federal minimum wage is $7.25/hour effective July 24,2009. Let’s assume the student gets paid the relatively generous amount of $11/hour for a library job, and works 20 hours a week term-time (a difficult amount to guarantee, given the student’s need to, well, study during the term). That’s $187 a week given a tax rate of 15% (yes, work study is subject to federal and state income taxes). There are roughly 40 school weeks in a year. The student can make up to $7480 a year, and that’s by working 20 hours a week in addition to being a full-time student. The student can cover 28% of  tuition, room and board at an average private four year university (averaging $26,273 in 2009) or 15.3% of the tuition, room and board at Harvard ($48868 in 2009).

In 1980, the average annual cost of tuition, room and board at an average private 4-year institution was $3499 and $11000 at Harvard. The federal minimum wage was $3.10.hour, and lets again assume the student gets paid a proportionally generous amount of $4.55/hour for the library job. That’s $77.35 a week given a tax rate of 15%, and after 40 school weeks of 20 hours a week of library work, the student could have made a total of $3094. The student could have covered 88% of the annual  private 4-year college bill or 28% of the Harvard bill.

The proportion of college tuition, room and board that a student can pay by working is not what it used to be and it will only get worse at the current rate of tuition inflation. For this reason, I have personally never bothered taking on a work-study job to help with tuition bills. It’s mathematically impossible to make an real impact by doing so.

http://www.flickr.com/photos/foreversouls/ / CC BY-SA 2.0

John is the co-founder and CEO of Blueleaf and is an active startup advisor. He is also an experienced entrepreneur and senior executive. As part of 6 founding teams, he has led the product management, marketing, and finance functions. His background in banking and wealth management has shaped the vision for Blueleaf.
  • Avanti3258 June 30, 2012, 2:22 pm

    Who guaranteed anyone room, board or Harvard? Who ever said you must finish your degree in 4 years?  Many of us lived at home. Drove a scooter or beater. Took 7 years to get through school? A local school.