Breaking Down the PROSPER Act: "One Work-Study"

December 8, 2017

By Carrie Warick, Director of Policy and Advocacy 

This is the third installment in NCAN's blog series on various proposals contained in the Promoting Real Opportunity, Success, and Prosperity through Education Reform Act, or PROSPER ActThe billintroduced Dec. 1 by House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC), would reauthorize the Higher Education Act by streamlining the federal financial aid system, expanding the programs eligible to participate in it with a focus on workforce development, and reducing regulations.

Summary

The Federal Work-Study program allows institutions to provide funding for students to work, either on or off campus (with limitations), to earn money that can be used to defray the cost of a higher education. Institutions of higher education receive a lump sum of dollars from the federal government, and then determine which students are eligible for work-study awards based on their enrollment. Currently, the total lump sum for each college is determined in part by the length of time an institution has participated in the Federal Work-Study program. This formula gives an advantage to older institutions, including elite ones enrolling fewer low-income students, over younger colleges. 

Under the PROSPER Act, this allotment by historical participation would be phased out over five years. The replacement formula would determine institutional funding using two equally weighted factors: the total Pell Grant dollars sent to an institution, and the total need of an institution's undergraduate student body. The new program would be funded at $1.7 billion, nearly double the usual current funding of just under $1 billion. 

Additionally, the Federal Work-Study program would create a bonus fund that rewards institutions who have high Pell Grant recipient graduation rates. The limitations on types of employment are also lifted, allowing for a larger portion of off-campus jobs and removing the requirement that a proportion of jobs be focused on community service.

NCAN's Take

NCAN has long advocated for a change to the formula that allocates which institutions receive what portion of the Federal Work-Study student aid dollars. Increasing the overall size of the program and shifting to a formula that is half-based on the proportion of Pell Grant dollars going to an institution are both positive steps for increasing low-income student access to work-study jobs, which are proven to increase their chances of graduation when compared to other types of jobs. 

Member Feedback

“Aligning work-study with Pell Grant distribution makes sense, as does incentivizing institutions with higher Pell Grant graduation rates, as this means low-income students are getting the academic, financial, and social-emotional supports they need to persist to a degree on those campuses,” said Lee Friedman, chief executive officer of College Now Greater Cleveland, one of NCAN’s founding members.

More on the PROSPER Act

NCAN Members Urge Further Examination of HEA Proposals

Breaking Down the PROSPER Act: "One Grant"

Breaking Down the PROSPER Act: Consumer Information & FAFSA Simplification

Breaking Down the PROSPER Act: "One Loan"

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