Can I Collect Unemployment While on a Work Study Program?

A work-study student employee who lost a previous full-time job is not restricted from unemployment benefits as long as he meets the requirements, and he must have lost his full-time job through no fault of his own to qualify for unemployment benefits.

COVID-19 (Coronavirus) Federal Work-Study Update

Federal Work-Study offers part-time jobs for students who need additional funds to pay for education expenses. Students whose Federal Work-Study jobs are affected by COVID-19 may be eligible to continue earning wages, as this scenario is considered a "disaster" in some cases.

For example, if a student is enrolled in a Federal-Work Study program at a campus or employer that closes because of the coronavirus, the school may continue paying the student his or her wages if the scenario meets one of three requirements, according to the Office of Postsecondary Eduction:

  • If the closure occurred after the beginning of the term.
  • If the institution is continuing to pay its other employees (including faculty and staff).
  • If the institution continues to meet its institutional wage share requirement. 

Students who couldn't begin an academic term because of COVID-19 are not eligible for Federal Work-Study wages during that term.

However, policies may vary from institution to institution. If you're enrolled in Federal Work-Study, contact your school's financial aid office to determine if you're eligible to continue earning wages.

Work-Study and Unemployment

Employers must pay state and federal unemployment insurance taxes for traditional, full-time employees in the event these employees ever become unemployed. Employers are not required to pay these taxes for nontraditional, temporary employees, such as work-study student employees. Since work-study jobs are considered non-permanent jobs, work-study student employees are not entitled to unemployment benefits from their work-study job alone. If a work-study student held a full-time job prior to his work-study position and meets the requirements for unemployment benefits through that job, he can collect unemployment benefits while on a work-study program.

Reporting Work-Study Earnings

While work-study income does not count toward qualifying for unemployment benefits, a work-study student who qualifies for unemployment compensation via another job must report his wages from his work-study position to his local unemployment office. Failure to report your work-study wages during the weeks you receive unemployment compensation is considered fraud, and you could face penalties and a back-pay order where you must pay back any benefits you received to your state’s labor board.

Work Availability

All unemployment recipients must be available for re-employment opportunities, including college students. If a job opportunity arises that interferes with your class schedule and your current work-study position, you must either rearrange your schedule to accommodate the work hours required for the job, even if accepting the job offer requires that you drop a course or leave school entirely, according to Michigan‘s Unemployment Insurance Agency. Otherwise, your state labor department will reduce your benefits or stop them altogether if you refuse a re-employment opportunity.

Considerations

Some states provide unemployment benefits for students who are enrolled in state-approved school or training programs, regardless of whether they receive work-study income or not. For example, New Jersey’s Department of Labor and Workforce Development provides unemployment benefits for students who are attending school or training programs that are state-approved to improve the student’s employment opportunities. These rules vary by state, as each state administers its own unemployment insurance program, so check with your state’s labor board or employment division for further details.