Money earned through a federal work-study job is not counted as income in calculating your financial aid in subsequent years.
However, it is income for the purpose of income taxes. It’s not a loan. It’s a job. You earn the money as you work. Your job has nothing to do with the “FAFSA system.” The person sitting next to you doing the exact same job may not be on work-study. What makes it “work-study” is that part of your earnings is subsidized by the federal government, so it costs the employer less to hire you (the employer pays only part of your salary).