When academically qualified people do not have the financial resources needed to enroll and succeed in college, higher education fails to fulfill the promise of promoting social mobility—and may actually serve to reinforce social inequities. The cost of college attendance is rising faster than family incomes, and increases in federal, state, and institutional grants have been insufficient to meet all students’ demonstrated financial needs. Between 2008–09 and 2017–18, average tuition and fees increased in constant dollars by 36 percent at public four-year institutions and 34 percent at public two-year institutions, while median family income rose by only 8 percent. The maximum federal Pell Grant covered 60 percent of tuition and fees at public four-year institutions in 2018–19, down from 92 percent in 1998–99. Full-time, dependent undergraduate students in the lowest family-income quartile averaged $9,143 in unmet financial need in 2016, up 149 percent (in constant dollars) from $3,665 in 1990.

Students who do not have sufficient savings, wealth, or access to other financial resources have few options for paying costs that are not covered by grants: they can take on loans, get a job, or do both. While these options pay off for many students, a higher education finance system that requires the use of loans and paid employment disproportionately disadvantages individuals from groups that continue to be underrepresented in and underserved by higher education.

Growth in student loan debt is well documented. As of the second quarter of 2019, total outstanding student loan debt in the United States exceeded $1.6 trillion and represented the largest source of nonhousing debt for American households. Annual total borrowing among undergraduate and graduate students from federal and nonfederal sources increased 101 percent (by $53 billion) in constant dollars from 1998–99 to 2018–19.

Many individuals who use loans to pay college costs complete their educational programs, obtain jobs with sufficiently high earnings, and repay their loans. But the implications of borrowing vary across groups and are especially problematic for students who do not complete their degree. The Institute for College Access and Success reports lower loan repayment rates for Pell Grant recipients, first-generation students, and black and Hispanic students as well as for students who attend for-profit institutions. Black students also average higher rates and amounts of federal loans and experience higher default rates.

Like taking on loans, working for pay can have benefits. Paid employment can provide students with money they need to stay enrolled, and it can build human capital and improve labor-market outcomes. An exploratory study by Anne-Marie Nuñez and Vanessa A. Sansone found that first-generation Latinx students developed new relationships, skills, and knowledge through work and experienced satisfaction and enjoyment from working. But working can also have harmful consequences. And, as with loans, the negative implications of paid employment are more commonly experienced by students from underserved and underrepresented groups.

The circumstances of working students today can undermine the mission of higher education for multiple reasons.

1. Many undergraduates are working more than twenty hours per week.

The US Department of Education reported that, in 2017, 43 percent of all full-time undergraduate students and 81 percent of part-time students were employed while enrolled (see table). The proportion of full-time students working for pay was higher in 2017 than in 2010, when 41 percent were employed, but lower than in 2005, when 50 percent worked for pay while enrolled. Employment rates for part-time students follow a similar fluctuating pattern: 86 percent in 2005, 75 percent in 2010, and 81 percent in 2017. In all, more than 11.4 million undergraduate students (58 percent) worked for pay while enrolled in 2017.

Descriptive and correlational studies of national data sets consistently show that students who work fifteen to twenty hours per week, especially on campus, tend to have better outcomes than those who do not work and those who work more than twenty hours per week. But many students are working more than this recommended level. According to the US Department of Education, in 2017, 63 percent of undergraduates who worked and were enrolled full time and 88 percent of those who worked and were enrolled part time worked more than twenty hours per week. For all working students in 2016, the average number of hours worked per week was 28.3, with full-time students averaging 24.8 hours of work per week and part-time students averaging 33.1 hours, according to our analysis of data from the National Postsecondary Student Aid Study (NPSAS).

2. Working for pay is more common among undergraduates from underserved groups.

The financial need to work while enrolled, with all its negative consequences, disproportionately burdens students from historically underserved groups. While students from all family backgrounds work for pay, students from low-income families are more likely to do so—and, among those who are employed, work more hours on average—than their higher-income peers. The US Department of Education reports that, in 2017, 16 percent of black full-time students and 13 percent of Hispanic full-time students worked at least thirty-five hours per week while enrolled, compared with 9 percent of white full-time students.

Students who are classified as independent for financial aid purposes more commonly work for pay while enrolled than students who are classified as financially dependent (69 percent versus 59 percent in 2015–16, according to our analysis of 2016 NPSAS data). Working undergraduates who are independent also average more hours of work per week than working-dependent undergraduates (33.8 versus 22.1). Among working students, nearly three quarters (71 percent) of those who were also single parents with a dependent child worked thirty or more hours per week in 2016, compared with 50 percent of all working students.

3. Working for pay while enrolled is more common at under-resourced institutions.

The rate of employment and the rate of working more than twenty hours per week are higher among full-time students attending two-year institutions than among those attending four-year institutions. In 2017, 50 percent of full-time students at two-year institutions worked, and 72 percent of these working students worked more than twenty hours per week, according to the US Department of Education. By comparison, 41 percent of full-time students at four-year institutions worked; 60 percent of these students worked at least twenty hours per week.

Two-year institutions, as well as for-profit and less selective four-year institutions, enroll higher shares of students from low-income families. The Center for Community College Student Engagement reported that nearly half (46 percent) of Pell Grant recipients attending public two-year colleges in 2017 worked more than twenty hours per week.

4. Working while enrolled can be harmful to student outcomes.

Working can have costs, as time spent working reduces time available for educational activities. Research has shown that working more than twenty hours per week is associated with lower grades and retention rates. Studies also show that working may slow the rate of credit-hour accumulation, encourage part-time rather than full-time enrollment, and reduce the likelihood of completing a bachelor’s degree within six years. These outcomes lengthen the time to degree, which can increase opportunity and other college costs. Reducing enrollment to less than half time reduces eligibility for federal Pell Grants and other aid. And the need to allocate time to paid employment may create stress, especially for students who are also parents or other caregivers. A disproportionate share of single parents enrolled in college are black and American Indian women.

5. Students from low-income families and other underserved groups are less likely to have jobs that advance career-related knowledge and skills.

While any employment may improve conscientiousness, teamwork, and other occupational skills, not all jobs will advance career-related knowledge and skills. About a quarter (26 percent) of working students under the age of thirty held a job in the food and personal services industries in 2012, according to data in Learning While Earning, a report from Georgetown University’s Center on Education and the Workforce; only 6 percent held managerial positions. In addition to working more hours on average than their higher-income peers, students from lower-income families are also less likely to have paid internships or other positions related to their career goals.

In a 2016 study, Judith Scott-Clayton and Veronica Minaya of Columbia University found that students with on-campus work locations and major- or career-related positions had higher rates of bachelor’s degree completion than students with other employment. Yet students from lower-income families and other underserved groups are less likely to hold on-campus and major-related jobs.

Ensuring that Work “Works”
Higher rates and intensity of employment among students from underserved backgrounds and those attending under-resourced institutions suggest that employment during college is serving to reinforce inequity in higher education opportunity, experiences, and outcomes. Changes in public policy and institutional practice are needed if higher education is to address these inequities. These efforts should focus on reducing the financial need to work and on minimizing the harm, while maximizing the benefits, of work.

Reducing the Need to Work
Even with current levels of employment, many students are struggling to make ends meet. In the 2015 National Survey of Student Engagement, most seniors at four-year institutions (63 percent) reported being “worried about having enough money” and half (48 percent) reported that they “did not participate in [unspecified] activities due to lack of money.” Reports of financial stress were more common among first-generation, black, and Hispanic students and among students over the age of twenty-four. More than a third (38 percent) of Pell Grant recipients at community colleges who worked more than twenty hours per week reported “running out of money” at least six times in a year, even though 46 percent worked more than twenty hours per week, according to the Center for Community College Student Engagement; only 22 percent reported having access to cash, credit, or other sources of funds for an “unexpected need.”

The following strategies may help to reduce students’ financial need to work more than twenty hours per week, while still ensuring that they have the financial resources needed to enroll, engage, and persist to degree completion.

1. Reduce unmet financial need.

Federal, state, and local public policy makers can reduce unmet financial need by appropriating more resources to institutions, which can then be used to keep tuition low, and allocate more need-based grant aid. Institutional leaders can reduce unmet financial need by maximizing the availability of need-based grant aid, limiting merit-based grant aid, and controlling costs. Offering additional need-based aid to low-income students has been shown to reduce employment rates and number of hours worked and increase the likelihood of on-time degree completion.

2. Do not penalize students who work for pay in financial aid calculations.

Students should work to cover their own contribution to the Expected Family Contribution, as well as unanticipated costs that arise while enrolled. Student earnings from work should not be viewed as a way to cover costs that are omitted from an institution’s official cost of attendance or for covering unmet need. Working should provide a mechanism for paying unanticipated costs without influencing the availability of resources to pay the costs needed to stay enrolled.

3. Help students make individually appropriate decisions about federal loans and work.

Whether because of risk or loan aversion or because of incomplete or inaccurate information, some students do not use federal loans. Higher rates of loan aversion have been observed among men and Hispanic students. K–12 and higher education counselors and administrators should educate students, especially those from underserved groups, about the costs and benefits of paid employment and different types of loans and discuss how working more than twenty hours per week may increase time to degree, reduce the likelihood of completion, and result in other costs.

4. Ensure that students apply for and receive the need-based grant aid for which they are eligible.

Not all students who are eligible for need-based aid apply for and receive the aid. In 2011–12, in part because of a lack of clear information, approximately 20 percent of all undergraduates, and 16 percent of those with incomes below $30,000, did not file a Free Application for Federal Student Aid (FAFSA), a condition for receiving most federal and state need-based aid. The Institute for College Access and Success reports FAFSA verification may also limit aid receipt and enrollment, especially for low-income students.

Minimizing Harm, Maximizing Benefits
Colleges and universities should also act to minimize the harm and maximize the benefits of working. The following strategies may help.

1. Increase the availability of on-campus and major-related employment.

Institutions should identify on-campus employment opportunities for students that are related to their major field and provide opportunities to build career-related knowledge and skills. Descriptive analyses suggest that academic outcomes are better for students who are employed on campus rather than off campus.

2. Ensure that high-quality academic and other supports are available to working students.

Creating an institutional environment that promotes success for working students requires a campus-wide effort. Observers have recommended that institutions support working students by offering courses in the evenings, on weekends, and online; making available future course schedules; offering access to academic advising, office hours, and other support services at night and on weekends; offering online course registration and virtual academic advising; providing child-care options; and designating space for working students to study. Institutions may also connect employment and educational experiences through career counseling and occupational placement.

3. Recognize differences in employment-related needs and experiences.

Institutions should also recognize differences in the supports needed by different groups of working students, as, for example, the experiences, needs, and goals of working adult part-time students are different from those of working full-time students who are still dependents. The Learning While Earning report recommends that institutions develop collaborations with area employers in order to provide adult working students with “convenient learning options; child care; affordable transportation options; employment partnership agreements; access to healthcare insurance; paid sick, maternity, and paternity leave; financial literacy and wealth building information and retirement and investment options; and tuition assistance.”

Colleges and universities, especially those that enroll high shares of working adults, should also consider mechanisms for awarding credit for work and other prior experiences. These mechanisms include the College Board’s College-Level Examination Program and the American Council on Education’s College Credit Recommendation Service.

Conclusion
Employment during college too often contributes to inequity in higher education opportunity, experiences, and outcomes. More can and should be done to ensure that all students—especially students who must work for pay while enrolled—can fully engage in the academic experience, realize the potential benefits of working, and make timely progress to degree completion.