Employer internship guides

FWS: Federal Work Study

Brown_arrow_21 Written by Nathan Parcells on Nov 13, 2010

State and Federal Programs that Can Subsidize Your Intern Salary Costs

Work-study programs are setup to help students who have financial need get hired for internships and other part-time work.  Federal and state legislators allocate millions of dollars for various programs each year which is then passed on to businesses that employ financial need students.  Below we explain everything you need to know about work-study and how it can help your organization save anywhere from 25 to 100% on intern salaries by hiring work-study students.

How it works:

Current work study options are divided into two main categories: federally funded work-study and state funded work-study. In addition, these two programs are often further supported by individual universities who add their own funds to the mix.  Each of these programs has different eligibility rules and is disbursed differently making them better or worse for different companies.  Ultimately, if you discover that your company is eligible to receive reimbursement AND you hire a student who has financial need, then you will likely save thousands of dollars on your intern salary costs.

The Federal Work Study Program -- From Washington DC to Local Universities, to Your Pocket:

The federal program is funded by the federal government but managed and disbursed by individual universities.  In 2009 the federal government allocated $980,492,000 of funding towards work-study plus an additional $200,000,000 in the Recovery Act.  Every year, these funds are then distributed to all the different colleges and universities in the country in an annual grant process.  After receiving their federal funds, universities manage the money and broker how much is ultimately awarded to employers and students.

In general, federal funds are only for non-profits and offer 75% reimbursement of intern salary costs. However, frequently universities will choose to add their own money to their federally allocated money, and such schools can dedicate a percentage of their total work-study budget to for-profit businesses.

State Work Study Programs:

Currently, nine states have their own, self-funded work study programs.  States that create their own work-study programs also create their own rules and instruments for disbursement, making them more flexible and easier to access than the federal program.  In fact every state that has a state work-study program has chosen to offer funding to both for-profit businesses and non-profits.

So it is important to note whether or not your state has its own program, as by and large state programs are more streamlined and easier to access than federal work study.

What this means for your organization:

If you are hiring in a state that has a state funded program you benefit from a much more streamlined process and from the fact that funds are available for both for-profit and non-profit organizations.

If you are hiring in a state that does NOT have a state program, your only option is to access federal money or on occasion money budgeted by individual universities.  This means as a non-profit organization you still have a very high chance to receive significant reimbursement and a s a for-profit organization you may be eligible to receive some funding.

The Student Variable:

It is important to note that after determining whether or not your state has a state program, and whether or not your organization is eligible, all funding decisions ultimately depend on how much money remains in the funding pool, as well as the level of need of the candidate you are hiring.   You will not be reimbursed for every intern you hire, but only for financially eligible students.

Next Steps:

View our work-study calculator to see if your state has a state work study program, and determine how much you could save if you hire a work-study student.

Cover image: Julie70 via Creative Commons

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