Spending stimulus money difficult for departments

Students who may be struggling to pay for college have been thrown a life preserver by the federal government, but only for the 2009-2010 school year.

That life preserver is a provision within the federal economic-stimulus law that adds an additional $200 million to the Federal Work-Study program on top of the annual (average) $980 million the program has received in years past. This pushes the work-study budget to more than $1 billion, a level not seen since before 2001. The deluge of funds should help an additional 130,000 students nationwide.

St. Thomas has received $500,000 for the program in addition to the budget before the stimulus, but spending the money isn’t as simple as it seems.

“That’s been the challenge,” said Paula Benson, assistant director of financial aid. “Getting departments aware of the funds that are available. Getting them to think outside the box and be creative about meeting their needs and students needs and how we can do that by hiring additional work-study students in departments.”

One part of the problem is that the stimulus law was passed months after departments had submitted their budgets for approval in November 2008. The other part of the problem is that this surplus of funds is expected to last for only this school year.

“We think the funds may be temporary,” Benson said. “We don’t know what Congress will offer next year. Congress could change its mind. We’re hopeful.”

As a result, departments have been scrambling to come up with ways to spend the money. Benson said it’s difficult because the funds are probably for only one year.

“Departments have to think about the long term too and it’s hard to say I’m going to hire additional work-study students this year, but then next year have to cut back,” she said. “That’s why we’re encouraging more ‘Let’s think outside the box,’ get projects done that have needed to be done for a while.”

A process is in place where departments can lobby for the funds to be added to their budgets, Benson said.

“We’ve had lots of conversations with departments about how they might use some of these dollars and it’s been really good. We still have funds to commit to departments.”

In some ways it is more expensive for universities not to use the work-study dollars than to give the money back.

“If we didn’t match it then we would be giving up the money,” Benson said. “The half million we got from the federal government this year as a result of the stimulus package plus our normal allocation, that’s a huge amount of dollars to give up. I think the benefit outweighs the cost.”

The program works by paying 75 percent of a student’s wages and the other 25 percent is paid by the university. The money is tax-free and can be used to pay for tuition or other expenses a student may have. Students are chosen for the program on the basis of financial aid and by filling out the Free Application for Federal Student Aid. Awards of either $2,500 or $3,000 are given for each aid year.

The program is just as beneficial for universities as it is for students. The Chronicle of Higher Education reported that some universities are planning on using the work-study funds to replace non-work-study student jobs in order to offset budget cuts that were a result of the economic recession.

That means there is no real gain in on-campus jobs at some universities. But, this is not the case at St. Thomas.

“[St. Thomas] runs a little differently on work-study than other universities,” said Alissa Begin, a human resources specialist at St. Thomas. “We tell most students if they want to find a job on campus, whether or not they have work-study funds available, they should be able to find a job.

There are funds for both work-study students and non-work study students, Begin said, and that’s a little different than other universities.

St. Thomas still has a significant amount of money left in the program to be given out to departments and students.

Matt Wolfgram can be reached at mnwolfgram@stthomas.edu.