EnterChapterTitle: Federal Work-Study Program
SectionTitle: Calculating FWS Awards
NEED ANALYSIS FORMULAS
[[COA - EFC = Financial Need]]
As stated earlier, a student must have financial need to be eligible for
a Federal Work-Study (FWS) job; that is, the student's cost of
attendance (COA) must be more than the amount of his or her
Expected Family Contribution (EFC) as calculated by the Federal
Need Analysis Methodology. Procedures for determining a student's
COA and eligibility for aid from Student Financial Assistance (SFA)
Programs are discussed in Chapter 2, Section 2. A financial aid
administrator may not award FWS employment to a student if that
award, when combined with all other resources, would exceed the
student's need. Resources, as defined in the campus-based
regulations, are listed in Chapter 5, Section 2. Additional
information about resources and overawards, as they apply to the
FWS Program, is included below.
DETERMINING MAXIMUM FWS ELIGIBILITY
[[Financial need - Other resources = Maximum FWS award]]
In determining the maximum FWS award a student is eligible to
receive, the aid administrator must take into account the following
- those resources the aid administrator can reasonably anticipate at
the time aid is awarded to the student,
- those the school makes available to its students, or
- those the aid administrator knows about.
The sum of a student's FWS award plus other resources may not
exceed his or her financial need.
[[Treatment of non-need-earnings]]
NON-NEED-BASED earnings, such as earnings from a job a student
locates on his or her own with a private employer, are not considered
to be a resource for the current award year because they will be
reported on the Free Application for Federal Student Aid (FAFSA)
for the subsequent award year and will be used to determine the EFC
for the subsequent award year. Only net income from NEED-
BASED employment is considered as a resource. Examples of need-
based employment would be employment under the U.S. Department
of Veterans Affairs' work-study program and employment with a
state if that employment is based on the student's need for assistance
to pay for educational expenses.
The school monitors each student's net income from need-based
sources to determine whether the student's need has been met. The
school does so by examining the school's payroll records of
disbursements to the student under the FWS Program and any other
need-based employment program. The school's FWS fiscal records
must be reconciled at least monthly.
EARNINGS APPLIED TO COST OF ATTENDANCE
[[Treatment of taxes and job-related costs]]
Not all of a student's FWS earnings are available to the student for
educational expenses. Some of the student's expenses may be job
related. Therefore, to determine the net amount of a student's FWS
earnings that will be available to help pay for his or her COA, the
school must subtract estimated taxes and job-related costs from the
student's gross FWS earnings. Examples of job-related costs include
uniforms, the cost of meals at work, and transportation to and from
work. During vacation periods, room and board may also be
considered job-related costs if the student is paying them ONLY
because he or she has an FWS job.
For example, to earn a net FWS award of $1,000, a student with a
Social Security tax of 7.65% and $100 in job-related expenses may
earn up to $1,176.50 in gross earnings ($1,000 + $76.50 + $100).
Only the net earnings of $1,000 are available to count toward the
student's need for federal student aid and to help pay for the student's
COA. Federal and state income taxes paid may also be withheld from
a student's wages. In some cases, these should also be deducted from
the student's gross income to calculate the net amount available to
the student; however, if the aid administrator is certain that the
student's federal taxes paid will be refunded by the Internal Revenue
Service (IRS), the school should not subtract these amounts from the
gross wages when calculating the net wages available to the student
for the FWS award. Similarly, if the aid administrator is certain that
the student's state taxes withheld will be refunded by the state, the
school should not subtract these amounts from the gross wages when
calculating the net wages available to the student for the FWS award.
Only taxes the student will actually pay (those that will be withheld
and NOT refunded) should be subtracted.
[[Working during a period of nonattendance]]
If the student works during a vacation or other period when he or she
is not attending classes, his or her net FWS earnings (earnings minus
taxes and job-related expenses) from that period must be counted
toward payment of the student's COA for the NEXT enrollment
period (refer to "FWS Employment During Period of Non-
enrollment" in Section 4 of this chapter).
A school is encouraged to tell each FWS recipient how much of his
or her earnings it estimates to be counted toward payment of his or
her COA. Of course, at the end of a student's employment, the school
will need to review the estimate to see if it was accurate and to make
adjustments if it was not.
FWS OVERAWARDS AND RESOURCES
New CFR Part 673, published in the Federal Register November 27,
1996, eliminates duplicate provisions and consolidates common
provisions of the campus-based programs. Regulatory provisions
regarding overaward and resources, formerly in 34 CFR 674.14,
675.14, and 676.14, are now in CFR 673.5. A list of resources and a
detailed discussion of the treatment of overawards in the campus-
based programs, including FWS, is included in Chapter 5, Section 2,
"Resources and Overawards."