Suggest federal work-study be adjusted to remain competitive with the expected increase.
For students, it's a potential windfall. But for colleges, a long-discussed increase in the federal minimum wage may become the latest challenge for the federal work-study program, which offers low-income students an opportunity for additional financial aid in exchange for part-time work
The U.S. House and Senate have each approved an increase in the minimum wage, from $5.15 to $7.25 an hour, which would increase pay rates for many students. While Congress is still debating the fine points of the bill, many higher education organizations say work-study will need more federal support to pay the higher wages.
"When Congress raises the minimum wage, we want to maintain the same number of jobs," says Larry Zaglaniczny, the congressional relations director at the National Association of Student Financial Aid Administrators in Washington, D.C. Congress and President Bush have frozen program funding at $980 million in recent years, but Zaglaniczny says advocates are seeking a sizable increase, to $1.25 billion next year.
Under work-study, the federal government provides up to 75 percent of the cost of on-campus jobs for lowerincome students. Colleges and universities put up the other 25 percent. But while federal funding has remained stagnant, many colleges already have had to increase their financial commitments. According to Zaglaniczny, 22 states have enacted minimum wage increases above the $5.15 federal rate.
"Students with eligibility, qualifications and experience may not be hired because the increased wages use up the allocated funds at a faster pace," says David Sheridan, dean of enrollment management at Union County College in Cranford, N.J. "This has already happened in states with minimum wages in excess of the federal figure."
Aid directors say they don't want students to languish at low-paid jobs. But they also recognize that the situation presents a budget challenge.
"Most financial aid administrators support increases in the minimum wage," says Sheridan, calling it an essential ingredient of economic justice. "We would just like to see lawmakers increase allocations for the program to correspond with increases in the minimum wage, knowing that's what many of the students are being paid."
At a time when some states set minimum wages higher than the national level, it appears fewer students are participating in the program. …