Work study is a pool of money the federal government gives a school. The pool is finite. Unfortunately, because schools do not know who will attend, who will accept work study if offered, who will actually find a work study job, or how much the student will actually earn through work study (can’t be more than offered, but could be less) … it is a real balancing act to award work study funding.
Schools award more than the pool they have been given by the feds! Sometimes they end up with unused work study funding at the end of the year, but they don’t get the money until it is spent, so they don’t actually have to “return” anything.
However, if they don’t use all the pool of funding, it is possible that the pool may be smaller next year as a result. But if they spend MORE than their allotted funding, the school has to pay the difference to the student. So you see … it’s an art, not a science … and reducing a particular student’s work study funding really doesn’t necessarily mean that the school has any more to award to anyone else (although they may find out midyear that they DO have some more they can award).