Why campus-based aid is so important

Even though the cost of attending a community college is the lowest of any higher education sector, financial aid remains a top priority for community colleges and their students. Without this aid, millions of students could not pursue a postsecondary education.

The Pell Grant program, which is the cornerstone of federal student aid, helps students cover their tuition and other college expenses at most community colleges. Last year, more than $8 billion in Pell grants was awarded to 2.5 million community college students. But, despite the fact that the maximum Pell Grant award exceeds the average cost of community college tuition and fees, the total cost of attendance (such as living expenses, books, equipment and transportation costs) far exceeds the current maximum award of $5,920. This is where campus-based programs, which are another form of financial assistance, can help community college students.

The two pillars

Campus-based aid includes the Federal Supplemental Educational Opportunity Grant (FSEOG) and the Federal Work-Study (FWS) programs, which award funds to institutions based on a federal formula in order to help exceptionally needy students.

The first priority for FSEOG awards is to Pell Grant recipients. The federal share of student awards under the FSEOG program cannot exceed 75 percent, with the participating institution covering the balance (such as 25 percent, unless a waiver is granted).

While the maximum award under FSEOG is $4,000, colleges rarely have enough funds to make even small grants to all their needy students. According to one community college administrator, there is never enough FSEOG funding to award even a modest amount to all Pell students with zero Expected Family Contributions (students who qualify as the neediest). The college runs out of funds, even with awards of only $500 per student. That said, the $500 award makes a huge difference for students who receive these grants.

The Federal Work-Study program works differently. It leverages resources from higher education institutions and the private sector to give students opportunities to earn money to pay for college. FWS funds help create partnerships among colleges, students, employers and communities, while enabling students to gain valuable work experience and earn wages.

Studies have shown that students who participate in the FWS program are more likely to stay in college.

“The unexpected benefit that I have seen from FWS over the past 31 years is that FWS also helps students ‘connect’ with the college,” said Joan Zanders, financial aid director at Northern Virginia Community College. “Those connections with supervisors and co-workers result in a higher persistence rate among work-study students than in the general student population.”

Under the FWS program, colleges provide on- and off-campus jobs for qualifying students. Generally, federal funds cover 75 percent of the student’s wages, with the college or off-campus employer covering the balance. The federal share of earned compensation can’t exceed 50 percent for employment at private for-profit organizations, but it may be up to 90 percent for wages at some jobs in the private nonprofit or public agency sector. And the federal share may be up to 100 percent for students working as math or reading tutors or employed by family literacy programs.

More support from Congress

Although community college students comprise 41 percent of all U.S. undergraduates, community colleges represented one quarter of the institutions awarded campus-based funds in the 2018-19 award year. They also received less in funding through the programs: For the 2018-19 award year, about $199 million (30 percent) of the $840 million for FSEOG will go to community colleges. FWS will receive $1.1 billion, with $190.4 million (17 percent) going to community colleges.

It’s because of the extra support that FSEOG and FWS provide to community college students that the American Association of Community Colleges and its member colleges are urging Congress to allocate more campus-based aid to community colleges as lawmakers work on their fiscal year 2019 appropriations bills.

About the Author

Laurie Quarles
is a legislative resource associate at the American Association of Community Colleges.