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Work-study aided with stimulus

BY ANNA LOTHSON | MARCH 2, 2009 7:30 AM

Out of the $53 billion set aside in the federal stimulus package for education, work-study programs will receive a hefty $200 million — an allocation many expect to pave the way for more UI students in the universitywide program.

Based on financial need, the work-study program at the UI always has more applicants than the number of available jobs, said Cindy Seyfer, an associate director of the Office of Student Financial Aid.

“Work-study may become more popular over the next year as employers are looking at ways to crunch budgets,” she said, noting that last year 1,757 UI students were enrolled in the program and nearly 1,200 are so far this year — a number she expects to rise.

“It encourages those students to work as opposed to taking out more loans,” she said.

Last year’s numbers showed a savings of $2.6 million for the university, because the federal government covers 50 percent of the wages a student earns.

“It’s always a program that people have a lot of faith and respect for,” Seyfer said. “It’s working to cover the costs of education, and that’s something to be commended.”

Since 2005, the appropriations allocated each year have been reduced by more than $9 million, according to the U.S. Department of Education’s website, but the $200 billion increase will make available funding for the program topple well over the $1 billion mark.

Mark Warner, the director of Student Financial Aid, said the additional increase could mean vast savings for many university employers, because increasing the number of students in the work study program would decrease the amount of wages they are responsible for.

And because the university has no control over how much the federal government’s allocation increase for the program will be, without the additional funding, the UI would foot more of the bill — which could have taken away grant or scholarship money.

“Given the economic downturn, we may see a larger number of students applying for financial aid,” Warner said, and tuition increases — such as next year’s hike of $232 to $1,500 for residents and out-of-state UI students respectively — amplify the demand for federal resources.

While Warner said the amount available for student aid correlates with tuition raises, his department is constantly hoping for more federal assistance.

In fact, he said, when determining budget scenarios for the university’s financial-aid sector, they anticipate benefiting from the federal stimulus allocations.

As a result, Warner said, the funding increases in the recently passed stimulus plan were a factor in determining budget scenarios for student financial aid next year, noting the $200 billion increase for work-study will, without a doubt, positively affect the UI’s ability to both save money and offer need-based students more opportunities.

Overall, UI Provost Wallace Loh said, financial-aid options will most likely increase despite budget crunches.

“It’s not going to flatline; it actually will go up,” he said, noting increased funding for some financial aid programs may affect other areas of the university. “Other things might have to be cut more deeply.”


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