How Subsidies work

What are wage subsidies and how do they work?

What are wage subsidies?

Wage subsidies are financial incentives that help employers offset the cost of hiring certain workers, such as students in internship positions. These subsidies can come in the form of direct payments, reimbursements, or tax credits. In work-study programs, they typically cover a percentage of student wages, making paid work opportunities more accessible.

Who funds them?

Wage subsidies are funded by federal, state, and local governments, as well as some nonprofit and private organizations. The Federal Work-Study (FWS) program is backed by the U.S. Department of Education, while many states run their own State Work-Study (SWS) programs with independent funding. Some cities, foundations, and industry groups also provide wage subsidies to support workforce development.

Why do they exist?

These programs reduce financial barriers to employment, encourage skill development, and help students gain real-world experience. They also support workforce development by connecting employers with emerging talent and investing in future economic growth. Many are designed to assist underserved populations and foster partnerships between businesses, educational institutions, and government agencies.

Who can participate in them?

Employers, including universities, nonprofits, government agencies, and private businesses, can apply if they meet program requirements. Students must typically qualify based on financial need for federal work-study, while state and private programs may have broader eligibility.

How are subsidies used at Folio?

Folio is approved for several subsidy programs that reach tens of thousands of students. When you hire through Folio, you’re gaining access to these programs without having to manage a competitive application or burdensome reporting requirements.

Pay range is one of several data points Folio uses in developing a match score between a job and a candidate: when you post a job with your max budget, Folio matches students who are either a) unsubsidized and willing to work for that amount, or b) are subsidized and will receive their (higher) minimum rate partially paid by you and partially paid by a subsidy partner.

For example, if your max out of pocket for a full stack software engineer is $20/hr, you can find a great unsubsidized undergrad intern for $20/hr, or you can unlock an exceptional subsidized grad student who requires $40/hr.

What wage subsidy programs are available?

Currently, Folio works with the following programs and adds more every month:

State	Program Name	Program Type	Accessible Through Folio?
Maryland	Maryland Technology Internship Program	State Workforce Program	Yes
Pennsylvania	PA State Work-Study Program (SWSP)	State Work Study	Yes
Indiana	EARN Indiana	State Work Study	Yes
Michigan	Michigan Steam Ahead	NGO	Yes
Minnesota	SciTech Internship Program	NGO	Yes
Texas	Texas Internship Challenge	State Workforce Program	Yes
Illinois	Illinois Institute of Technology	Federal Work Study	Yes
New York	Monroe College	Federal Work Study	Yes
New York	Touro University	Federal Work Study	Pending

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