Student Financial Aid News

On Friday, July 24, the national minimum wage increased by 70 cents – from $6.55 per hour to $7.25 per hour.

From NASFAA:

By a vote of 264 to 153, the House passed its FY 2010 Labor, HHS, and Education appropriations spending bill (H.R. 3293) on Friday. The bill would provide level funding for most Title IV discretionary programs. The bill would set the appropriated amount of the Pell Grant to a maximum award of $4,860. A scheduled mandatory increase from the College Cost Reduction and Access Act (CCRAA) would add an additional $690 to the appropriated amount, bringing the total Federal Pell Grant to $5,550 for the 2010-11 award year.

The appropriations bill would also provide $868 million for the TRIO programs and $333 million for GEAR UP, $20 million above FY 2009 levels. Those increases are estimated to assist 51,000 additional disadvantaged and first-generation college students prepare and complete college, according to a House Bill Summary.

Commentary

While nice, the Pell Grant increase doesn’t substantially change access for students, going from $5,350 to $5,550, a $200 increase, or about 4%. GIven that tuition rises nationally anywhere from 3% – 7%, this isn’t enough to keep up with inflating college costs.

Students, especially those with greater need, will continue to need to hunt for scholarships.

Scholarship Search Update

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Download your free copy here, or watch the video!

News You Can Use

For anyone working in food service or any profession in which tips are a vital part of your income, one little realized part of tip-based professions is that minimum wage laws must still be met.

From the Department of Labor:

Question: Is it legal for waiters and waitresses to be paid below the minimum wage?

Answer: According to the Fair Labor Standards Act, tipped employees are individuals engaged in occupations in which they customarily and regularly receive more than $30 a month in tips. The employer may consider tips as part of wages, but the employer must pay at least $2.13 an hour in direct wages.

An employer may credit a portion of a tipped employee’s tips against the federal minimum wage of $7.25 per hour effective July 24, 2009. An employer must pay at least $2.13 per hour. However, if an employee’s tips combined with the employer’s wage of $2.13 per hour do not equal the hourly minimum wage, the employer is required to make up the difference.

The employer who elects to use the tip credit provision must inform the employee in advance and must be able to show that the employee receives at least the applicable minimum wage (see above) when direct wages and the tip credit allowance are combined. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the minimum hourly wage, the employer must make up the difference. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.

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If you’re working and not making minimum wage, your employer MUST make up the difference by law. With the recent minimum wage increase, you should be earning at least $7.25/hour nationally.

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