Why elite colleges with the fewest low-income students get the most work-study money.
Greg Noll, a senior at Columbia University, balances his engineering major with a federally subsidized “work-study” job at the university’s fitness center, where he fills spray bottles, wipes sweat off the machines, and picks up towels for twenty hours a week. The $9-an-hour wage he’s paid is underwritten by the federal work-study program, which was launched in 1964 to support low-income students who would not otherwise be able to afford college.
While Noll and his counterparts at Columbia and other pricey, top-tier private colleges and universities no doubt benefit from the program—Noll says he uses the money to buy books and food and to go out with his friends on the weekends—they are not necessarily the intended recipients of aid from the $1.2 billion federal program. Noll’s family, for instance, makes $140,000 a year, which he says, rightly, puts them squarely in the upper-middle class. In fact, researchers at the Community College Research Center at Teachers College, Columbia University, have found that only 43 percent of students who receive work study meet the federal definition of financial need as determined by whether they also receive Pell Grants. Work study “disproportionately benefits the students who need it the least,” says Rory O’Sullivan, research and policy director at the youth advocacy organization Young Invincibles.
A major source of the problem stems from the fact that the work-study program uses a fifty-year-old formula to determine how federal funds are allocated. Unlike other federal financial aid programs that distribute money according to how many students at a university actually need aid, money for the work-study program is based instead on how much a university received the previous year, and how much it charges for tuition.
That perpetuates a system under which the universities that get the lion’s share of federal dollars are not the ones with the most low-income students but, rather, those that have been participating in work study the longest and charge the highest tuition. Consequently, nearly half of work-study recipients attend private, nonprofit universities and colleges.
As the chart on page 18 shows, eight of the top ten schools receiving the largest amount of federal work-study money are private nonprofit institutions, including Columbia, Northwestern, New York University, and the University of Southern California. With the exception of tiny Berea College in Kentucky, these schools do a relatively poor job of serving low-income students. Out of 284 national universities on the Washington Monthly’s annual college rankings (September/October 2013), Columbia scores number 175; USC, number 243; Northwestern, number 246; and New York University, number 278 on measures of “social mobility”—that is, their record of recruiting and graduating low-income students and the net price of tuition they charge those students. Moreover, these schools are not lacking in dollars they could put toward student aid. Columbia University, number six on the top ten work-study list, received nearly $6.8 million in federal funds for work study, a figure that represents less than 1 percent of the annual return on its $8.2 billion endowment.
By contrast, less-prestigious state colleges and universities, which tend to serve students of more modest means, get relatively few work-study dollars. Florida State University, for instance, receives less than one-fifth as much work-study money as Columbia, even though Florida State is five times bigger and has a much higher proportion of low-income students, according to the Teachers College study. The same is true of community colleges, which were typically built in the late 1960s and ’70s, after the old-line schools first grabbed their self-perpetuating shares of work-study funds. Community colleges enroll 30 percent of all students, including many who have comparatively low incomes, but get only 16 percent of work-study money, according to the College Board. By comparison, private, nonprofit institutions enroll only 17 percent of all students but get 40 percent of the funding.
“Colleges that got the money from the beginning keep getting the money,” says Debbie Cochrane, research director at the Institute for College Access and Success. “It doesn’t go where the low-income students go. It’s counterintuitive.” Today, nearly one in four work-study recipients comes from a family that earns more than $80,000 a year, according to new figures from the U.S. Department of Education. By contrast, fewer than one in five students who get work-study money comes from a family that makes less than $20,000 a year.
The disparity in the allocation of work-study funds is exacerbated by a recent trend in which colleges and universities are increasingly steering their own financial aid to students from wealthy families who also fall above the standard of financial need. (Offering tuition discounts to students from affluent families who attend good suburban high schools raises universities up the all-important U.S. News & World Report college rankings, and taking those who can afford to pay the rest of the bill brings in more revenue than giving large amounts of aid for poorer students who can pay little.) Budget cuts from Congress’s sequestration have also worsened the problem. Last year, the work-study program was reduced by nearly $50 million, costing 33,000 students their work-study jobs in the fall.
For the 2010-11 school year, work-study aid went to more than 700,000 students, each of whom earned an average of a little more than $1,600 a year by working in dining halls, libraries, gyms, and other places, almost all of them on campus. (A small amount goes for paid off-campus internships and community service jobs.) In some instances, the institution shares the cost of the students’ salaries; in others, the government covers the full amount. In any case, $1,600 a year may not seem like a whole lot of money, but when it goes to lower-income students, it can significantly improve their odds of eventually earning a degree, says Michelle Asha Cooper, president of the Institute for Higher Education Policy.
Those on-campus work-study jobs aren’t the same as off-campus jobs at local fast-food joints, Cooper says. They’re in convenient locations, and students can often study while they’re at work—two factors that correlate with greater academic success. Studies have shown that when students are forced to take off-campus jobs, it can slow down and derail their path to graduation, Cooper says. “The more they work to pay for school, the less well they do,” she said. ‘If we enhance work study, we can do a lot to improve their academic outcomes.” Seventy-two percent of U.S. undergraduates currently work at least part-time while in school, most of them off-campus, and one in five works thirty-five hours a week or more, according to the U.S. Census Bureau.
Since the work-study program was established fifty years ago, “the world has changed,” says J. Noah Brown, president of the Association of Community College Trustees. Tuition has skyrocketed, putting higher education beyond the reach of many low-income students. To fix it, Brown says, the whole system needs to be revamped.
Reformers say the first step would be changing the formula so that work-study funds flow to schools based on how many low-income students they enroll, not how much money they got last year. The second would be allocating more funds, especially for students nearing graduation, to career-focused paid internships off-campus—positions that frequently lead to offers of full-time employment. The third step would be expanding the size of the overall work-study program, perhaps by asking companies that would benefit from more paid internships to underwrite part of the cost.
Last year, the Senate Education Committee began a series of hearings that will continue this year on updating the whole financial aid system. Critics of the current system hope work-study reform is on the agenda. But they also expect that the colleges and universities that currently receive the bulk of work-study dollars, and benefit from the free and cut-rate student labor that money underwrites, will lobby forcefully against any changes. “I would be surprised if they didn’t,” says O’Sullivan of Young Invincibles. “Institutions certainly get a big benefit from having students work and having the federal government pay for it, so there’s an incentive to holding on to that money.”
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