The Federal Work-Study (FWS) program has long been a valuable resource for college students, providing part-time employment to help pay for education expenses while gaining work experience.
But in recent years, a series of legislative changes and budget proposals have reshaped how FWS works—and created uncertainty about its future. With student interest in work-study programs rising, it’s essential to understand what’s changed, what’s coming, and how students can prepare.
A refresher: What is Federal Work-Study?
Federal Work-Study is a federal financial aid program designed to help students with demonstrated financial need cover education costs while gaining valuable work experience. It provides part-time jobs for both undergraduate and graduate students, allowing them to earn money to help offset tuition, books, and living expenses. Jobs are typically located on campus, though off-campus community service positions may also be available.
The program is structured to ensure students not only receive financial assistance but also develop professional skills, time management, and work habits that will serve them beyond college. Wages are paid at least at the federal minimum wage, though some positions—especially those requiring specialized skills—may pay more.
For a deeper dive into how FWS works, read our post: What Is the Federal Work-Study Program?
FAFSA Simplification Act: Key changes for 2024–2025
The FAFSA Simplification Act, rolled out for the 2024–2025 award year, significantly altered how work-study interacts with financial aid:
- No FAFSA interest question: Students are no longer asked whether they are interested in FWS on the FAFSA. Instead, colleges automatically determine eligibility based on financial need. This ensures that more students are considered for FWS without the risk of accidentally overlooking the checkbox in prior versions of the form.
- No impact on future aid: Previously, FWS income could reduce a student’s financial aid eligibility in the following year. Under the new law, earnings from work-study no longer count against students in aid calculations. This change helps protect students from being penalized for working and allows them to pursue FWS without jeopardizing future awards.
- Institutional reporting requirements: Colleges must now report each student’s FWS earnings directly to the U.S. Department of Education, adding administrative responsibility for schools. While this increases oversight and accountability, it may also place new burdens on financial aid offices and payroll departments.
These changes are designed to simplify the financial aid process for students and create a fairer treatment of work-study income.
The One Big Beautiful Bill (OBBB) Act: Major changes starting in 2026
Signed into law in July 2025, the One Big Beautiful Bill (OBBB) Act introduces sweeping adjustments to FWS, effective July 2026:
- Shift in cost-sharing: The federal government’s share of FWS wages will drop from 75% to 25%, requiring colleges and universities to cover the remaining 75%. This change may lead schools to scale back the number of work-study jobs available, especially at smaller institutions with limited budgets. As a result, students could face more competition for fewer positions.
- Restrictions on job types: New Department of Education guidance prohibits the use of FWS funds for political activities, including roles such as voter registration drives or campaign-related work. Students who previously sought these civic engagement opportunities will need to look for alternative on-campus or community-based jobs.
- Program uncertainty: While the OBBB Act lays out structural changes, ongoing budget negotiations continue to raise questions about the program’s future. Colleges may be hesitant to expand or maintain FWS roles until the long-term funding picture becomes clearer.
These adjustments could make FWS jobs more limited, both in number and in scope.
Proposed budget cuts for 2026
Adding to the uncertainty, the fiscal year 2026 federal budget proposal includes significant reductions to student aid programs:
- Nearly $1 billion cut to FWS: The proposal would reduce federal funding for work-study by close to one billion dollars. Such a reduction could sharply decrease the number of funded positions nationwide and limit opportunities for students who rely on these jobs to cover living expenses.
- Elimination of the Federal Supplemental Educational Opportunity Grant (FSEOG): This program, which has long supplemented aid for low-income students, is slated for removal under the proposal. Its elimination would disproportionately affect students with the greatest financial need, who often depend on a combination of FSEOG and FWS support.
- Potential shift to state responsibility: The budget suggests shifting more responsibility for aid to individual states, raising concerns about the consistency of support across the country. States with fewer resources may be unable to fill the gap, creating uneven access to work-study opportunities.
While Congress will ultimately determine the budget, these proposals highlight the possibility of reduced federal investment in work-study and related aid programs.
What this means for students
For students who rely on FWS, these legislative and budget changes bring important considerations:
- Fewer jobs may be available: As institutions shoulder more of the cost, they may reduce the number of work-study positions. Students should anticipate more competition for available roles and may need to apply quickly once jobs are posted.
- Job types will be more limited: Roles tied to political or civic engagement activities are no longer eligible for FWS funding. This narrows opportunities for students who previously used work-study to pursue community organizing, advocacy, or government-related work experience.
- Future funding is uncertain: With federal budget debates ongoing, there is no guarantee that funding levels will remain stable. Students should understand that FWS, while valuable, may not be a guaranteed source of support throughout their college years.
- Increased institutional differences: Because the cost-sharing formula has changed, some colleges may reduce positions more than others depending on their budgets. This means the availability of FWS may vary significantly between institutions.
Students should not panic but should prepare for possible changes by exploring alternatives and staying proactive.
How students can respond
- Check with your financial aid office: Each institution will handle these changes differently. Confirm how your school is adjusting FWS positions and funding, and ask about any changes to award amounts or job availability.
- Explore alternative funding sources: Scholarships, grants, and non-FWS campus jobs can help fill potential gaps.
- Apply early: Even with fewer positions, work-study is still awarded on a first-come, first-served basis at many schools. File the FAFSA as soon as possible each year and stay aware of your school’s internal deadlines for applying for jobs.
- Diversify employment options: Students may want to consider part-time work outside of the FWS program, including campus-based jobs that are institutionally funded or off-campus opportunities that align with career goals.
- Stay informed: Track updates from the U.S. Department of Education and your institution. Policy changes are ongoing, and staying current is the best way to prepare.
Staying prepared amid Federal Work-Study changes
The Federal Work-Study program remains an important source of financial support and professional experience for many students. But legislative changes, cost shifts, and proposed funding cuts mean the program’s future is less certain than in past years.
By understanding recent updates and planning ahead, students can make informed financial decisions and ensure they are ready for any adjustments to the program. While the landscape may change, proactive preparation will help students continue to thrive in college and beyond.
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