Higher Ed Groups Weigh In on Minimum Wage Debate
Suggest federal work-study be adjusted to remain competitive
with the expected increase.
By Charles Dervarics
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 lower-income 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. U.S. Department of Education data show that work-study’s $1 billion budget was enough to serve 970,000 recipients back in 2002. The number of students served through the program then dipped to 826,000 in 2004 before rebounding somewhat. For 2008, the government projects that work-study’s $980 million budget will serve 880,000 low-income students.
The federal minimum wage had no effect on these declines in participation. The government’s basic wage rate has not changed since 1997.
On Capitol Hill, the proposed legislation would increase the minimum hourly wage to $5.85 within 60 days of enactment and $6.55 within 12 months. The wage would move to $7.25 the next year.
Needy students say such increases are long overdue. “Many students aren’t taking work-study jobs because they’re not paid enough,” says Rebecca Thompson, a recent graduate of Northern Michigan University who spent five years in work-study jobs.
Thompson, now the legislative director of the United States Student Association, says her many work-study jobs — including working as a receptionist and cafeteria worker — all paid the federal minimum of $5.15 an hour. Since work-study jobs were available only 20 hours a week, Thompson took jobs at a local hotel as well as other locations off campus.
“If there had been more money available for work-study, I wouldn’t have had to work off campus,” she says. At USSA, Thompson now supports the budget increase favored by many higher education groups.
The job fills an important role, she says, because it allows students to work on campus and take off whenever they have a class. “You can’t do that in an off-campus job,” she says.
But the work-study program looks much different in California, where the state’s minimum wage increased to $7.50 an hour this year and will jump again to $8 an hour in 2008. Under law, work-study programs must pay the prevailing state or local wage if higher than the federal rate.
Most experts predict Congress will finalize the wage increase, currently being held up over a partisan dispute about including tax breaks with the bill. “It could drag on for a long time,” Zaglaniczny says. Meanwhile, advocates still are seeking the additional funding for work-study.
© Copyright 2005 by DiverseEducation.com