Unemployment Compensation (UC):
Eligibility for Students Under State and
Federal Laws
Julie M. Whittaker
Specialist in Income Security
Alan Eder
PMF Intern
September 7, 2012
Congressional Research Service
7-5700
www.crs.gov
R42707
CRS Report for Congress
Pr
epared for Members and Committees of Congress
UC Eligibility for Students Under State and Federal Laws
Summary
The recent economic recession and subsequent recovery period has produced one of the most
challenging labor markets in recent decades. Many workers lost their jobs during this time period,
as others were just entering the market for the first time. As a strategy to cope with the difficult
employment situation, many individuals entered school to acquire skills to become more
competitive, while others never left, remaining in school to postpone the employment search.
However, due to the prolonged nature of the recovery, many students and workers remain jobless
and struggle to find work. According to Bureau of Labor Statistics (BLS) data, in July 2012,
approximately 12.8 million workers remained jobless, of which almost 2.1 million individuals
aged 20 to 24 were unemployed.
Those that have gone back to school, and have now graduated, still face a competitive job market,
and may need to search for work for a prolonged period of time. According to BLS data, in June
2012, there were approximately 3.4 unemployed workers for every available job, and almost 40%
of the unemployed have been jobless for more than six months. Because of this economic
climate, Congress has been interested in not only job creation and how students are coping with
the competitive job market, but whether they are receiving income support during times of
unemployment in order to cope.
Unemployment Compensation (UC) is a joint federal-state program that provides income support
payments to eligible workers who lose their jobs through no fault of their own. Federal law sets
out broad guidelines with regard to how the UC program operates and how it should be
administered. State laws establish eligibility criteria for who qualifies for the program. In the case
of a student who becomes unemployed, eligibility would depend on how their respective state
treats students within the UC system.
Most states disqualify students from UC benefits while they are in school or disqualify
individuals from UC benefits if they leave work to attend school. This is typically due to the
presumption that students would be unavailable for work during the time that they are in school.
However, exceptions and variations exist from state to state. Many workers who lost their jobs
and remain in school may be eligible for UC benefits depending on their circumstances and how
their respective states treats students.
This report describes these state variations in further detail and how states consider students
within the framework of their own unique UC programs.
Congressional Research Service
UC Eligibility for Students Under State and Federal Laws
Contents
Introduction...................................................................................................................................... 1
General Eligibility Criteria .............................................................................................................. 2
Recently Unemployed Graduates .............................................................................................. 2
Federal Unemployment Tax Act Eligibility Restrictions........................................................... 3
Student Eligibility...................................................................................................................... 3
School Personnel ....................................................................................................................... 3
Eligibility While Attending School.................................................................................................. 4
Disqualification for Leaving Work to Attend School ...................................................................... 6
Approved Training........................................................................................................................... 8
Conclusion ....................................................................................................................................... 8
Tables
Table 1. Exceptions to UC Benefit Disqualification While Attending School ................................ 4
Table 2. UC Eligibility for Individuals Who Leave Work to Attend School ................................... 6
Contacts
Author Contact Information............................................................................................................. 9
Congressional Research Service
UC Eligibility for Students Under State and Federal Laws
Introduction
With the official end of the most recent recession in June 2009, congressional interest remains
heightened with regard to job creation and the income security of the workers in this country.
Traditionally, the path to high wage growth and secure employment for workers has been to
pursue and complete education through vocational, post-secondary schools, or other institutions.
However, employment prospects remain dim for the growing number of recent graduates. Many
young workers who have lost their jobs or are still in school face challenges such as
unemployment, or if they have a job, underemployment. In July 2012, among individuals aged 20
to 24 in the United States, the unemployment rate was 13.5%.1
Workers who have lost their job through no fault of their own often rely on Unemployment
Compensation (UC) benefits for income support during periods of unemployment. Current
graduating students, as well as recent graduates from years past, may have worked during
previous periods, or worked while they were attending school. If they earned sufficient wages to
qualify for UC benefits, they may be eligible to receive this form of income support if they
became subsequently unemployed (depending on state considerations).2 However, students who
worked previously, or are concurrently working and attending school, may face barriers and
impediments to their UC claims once they are unemployed.
This can occur in a number of ways. For example, a student could be attending school full-time,
while also working full-time in covered employment, and then lose his or her job. In addition, a
worker could have a job in covered employment, and also start school, and subsequently lose his
or her job. In both cases, the individual may apply for UC benefits, but the eligibility for those
benefits may differ according to the governing state.
Many states disqualify workers from UC benefits for school attendance, although some states
make exceptions for certain students, typically those receiving approved training or training under
Trade Adjustment Assistance for Workers (TAA) program, which provides federal assistance to
workers adversely affected by foreign trade. This report examines the treatment of students as a
special group within the UC system, and how states define student eligibility for their respective
state UC programs.3
1 Bureau of Labor Statistics (BLS), Economic News Release, Table A-10, selected unemployment indicators,
seasonally adjusted, at http://www.bls.gov/news.release/empsit.t10.htm.
2 For a discussion on qualifying wages for UC benefits, see CRS Report RL33362, Unemployment Insurance:
Programs and Benefits, by Julie M. Whittaker and Katelin P. Isaacs. A comprehensive list of states’ qualifying wages
can be found at http://www.workforcesecurity.doleta.gov/unemploy/pdf/uilawcompar/2012/monetary.pdf, Table 3-3.
3 The Employment and Training Administration (ETA) within U.S. Department of Labor (DOL) publishes an annual
Comparison of State Unemployment Insurance Laws. The information provided in this report is based in large part on
information from this comparison guide. The guide is issued for reference and research purposes and includes the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. States annually provide updates and corrections. State
laws are generally reflected in the comparison guide, but it does not provide an official interpretation of each state’s
laws. For the full text of state law, the state statute should be consulted. For official interpretations of state law, the
individual state’s rules and regulations, administrative and court decisions, and opinions of attorneys general should be
consulted. The current Comparison of State Unemployment Insurance Laws can be found at http://ows.doleta.gov/
unemploy/comparison2012.asp.
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UC Eligibility for Students Under State and Federal Laws
General Eligibility Criteria
UC is a joint federal-state program that provides unemployment benefits to eligible workers. The
U.S. Department of Labor (DOL) administers the federal portion of the UC system, which
operates in each state, the District of Columbia, Puerto Rico, and the Virgin Islands. The UC
program is financed by federal taxes under the Federal Unemployment Tax Act (FUTA) and by
state payroll taxes under the State Unemployment Tax Acts (SUTA).4 In addition to establishing
how the UC program is financed, these laws also establish certain criteria for UC eligibility.
Federal law excludes few positions or types of workers from coverage (with certain exceptions
such as the self-employed or others as noted below). Because federal law provides broad
guidelines for UC coverage, eligibility, and determination, specifics of each UC program are left
to the determination of each state. Although general similarities exist between states, each state
establishing its own criteria results in essentially 53 different UC programs.
State laws and program regulations determine UC benefit eligibility, payments, and duration.
Generally, UC benefits are available to eligible workers who have lost their jobs through no fault
of their own and are willing, able, and available to work. In addition, UC eligibility is typically
based on attaining qualified wages and employment covered in a 12-month period (called a base
period) prior to unemployment. All states require a worker to earn a certain amount of wages or to
work a certain period of time (or both) within the base period to be monetarily eligible to receive
any UC benefits.5
Recently Unemployed Graduates
Nothing in federal law precludes recent graduates from receiving UC benefits if unemployed.
However, the likelihood of a recent unemployed graduate receiving UC benefits is low. Recent
college graduates and younger individuals may not be receiving UC benefits for a number of
reasons,6 but basic criteria noted above often dictates eligibility. Generally, to be eligible for UC
benefits, a recent graduate would need to have worked in covered employment, earned sufficient
wages in his or her base period, and left his or her work involuntarily.
In July 2012, the unemployment rate for individuals 20 to 24 years of age was 13.5%, with about
2.1 million individuals in this age group unemployed in the United States. Moreover, during that
month, individuals 24 years of age or under received 8.9% of total UC benefits, yet made up
27.4% of the unemployed population.7 Although younger workers generally earn lower wages
and would likely therefore receive less return in UC benefits, this difference is substantial.
4 For more information on UC financing, and the operation of FUTA and SUTA, see CRS Report RS22077,
Unemployment Compensation (UC) and the Unemployment Trust Fund (UTF): Funding UC Benefits, by Julie M.
Whittaker.
5 For a broader discussion on the UC Program, eligibility, and determination of UC benefits, see CRS Report RL33362,
Unemployment Insurance: Programs and Benefits, by Julie M. Whittaker and Katelin P. Isaacs.
6 For more information on young individuals, or “disconnected” youth, see CRS Report R40535, Disconnected Youth:
A Look at 16- to 24-Year Olds Who Are Not Working or In School, by Adrienne L. Fernandes-Alcantara and Thomas
Gabe.
7 Congressional Research Service (CRS) calculations using Current Population Survey (CPS) data for July 2012.
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UC Eligibility for Students Under State and Federal Laws
Approximately 1 in 10 unemployed workers aged 16 to 24 receives unemployment insurance.8
Moreover, recent testimony before the Joint Economic Committee of Congress suggested that
individuals graduating from college during a large recession are likely to face reduced earnings
that persist for up to 10 years compared with graduates during a boom economy.9
Federal Unemployment Tax Act Eligibility Restrictions
UC benefits are financed through employer taxes that are established by federal and state law.
Federal taxes on employers are provided under the authority of the Federal Unemployment Tax
Act (FUTA), whereas state taxes are provided under the authority of the State Unemployment Tax
Acts (SUTA). Federal law defines which jobs a state UC program must cover and provides broad
guidelines concerning benefit eligibility, in order for the state’s employers to avoid paying the
maximum FUTA tax rate on each employee’s annual pay.10 State laws govern student eligibility,
but FUTA provides further guidelines concerning the eligibility of school personnel for UC
benefits.
Student Eligibility
Most states disqualify workers from UC benefits if attending school and some states extend this
disqualification to vacation periods. The typical presumption behind this policy is that students
are unable or unavailable to accept full-time work while in school. Workers must have established
wages prior to receiving UC benefits, and the sufficiency of earned wages often depends on the
part-time or full-time status of their job. States vary in how they establish definitions of a student,
as well as whether they distinguish between part-time and full-time students for the purposes of
UC benefits eligibility. In addition, states differ in how they establish these policies, whether
through statute, regulation, or case law.
School Personnel
FUTA requires states to disqualify school employees from UC benefits if they are unemployed
between school terms or vacation periods. This denial applies if the individual has a contract or
reasonable assurance of returning to work when the school reopens. This denial applies to
instructional, research, or principal administrative employees.
FUTA also requires states to deny benefits to these school personnel if they perform services in
regular, but not successive, years or terms. For example, school personnel who only work during
8 Maria E. Enchautegui, Disadvantaged Workers and the Unemployment Insurance Program, Urban Institute,
Washington, DC, June 2012, p. 6, http://www.urban.org/UploadedPDF/412620-Disadvantaged-Workers-and-the-
Unemployment-Insurance-Program.pdf. Calculation is based on 2008 Survey of Income and Program Participation
(SIPP) Panel, 2010 data.
9 From Philip Oreopoulos, Till von Wachter, and Andrew Heisz, “The Short- and Long-Term Career Effects of
Graduating in a Recession: Hysteresis and Heterogeneity in the Market for College Graduates,” Institute for Study of
Labor Discussion Paper, no. 3578 (June 2008). Till von Wachter, an Economist at Columbia University, provided this
analysis as part of testimony submitted to the U.S. Congress, Joint Economic Committee on “Long Term
Unemployment: Causes, Consequences, and Solutions,” April 29, 2010, p. 5. The testimony can be found at
http://www.columbia.edu/~vw2112/testimony_JEC_vonWachter_29April2010.pdf.
10 For more information on FUTA and SUTA, and a broader discussion on covered jobs, see CRS Report RL33362,
Unemployment Insurance: Programs and Benefits, by Julie M. Whittaker and Katelin P. Isaacs.
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UC Eligibility for Students Under State and Federal Laws
the academic year would not be eligible for UC benefits during the summer period. In this case,
personnel are not eligible for compensation during the entire period between the regular but non-
successive academic years or terms. This denial also applies to vacation or holiday periods within
school years or terms.11
The report further discusses how states treat students in two circumstances: whether they qualify
for UC benefits while attending school (e.g., a student loses his or her job while in school) or
whether they qualify for UC benefits if leaving work to attend school.
Eligibility While Attending School
Most states disqualify students from UC benefits while they are attending school. States policies
tend to presume that students will be unavailable for full-time work because school hours often
overlap with standard work hours. In addition, many students, if working part-time, would likely
have insufficient prior earnings to qualify for UC benefits. However, if certain conditions are met,
some states may allow students to remain eligible for UC benefits.
Exceptions to disqualification for UC benefits vary considerably. Almost 45% of states allow
students to remain eligible for UC benefits if school attendance does not interfere with the ability
and availability to accept suitable work or the student can demonstrate that he or she is seeking
and able to accept full-time work. In addition, almost one-third of states allow students to qualify
while in school if they are attending an approved training program or can demonstrate that they
are willing to quit school or adjust class hours if suitable work is offered. A small minority of
states have stricter UC eligibility requirements and do not provide exceptions for students to
qualify for UC benefits. Conversely, a few states have little restriction on UC eligibility for
students attending school. Table 1 shows the variation among the states.
Table 1. Exceptions to UC Benefit Disqualification While Attending School
School
attendance
Willing to quit
does not
school or
Earned
interfere with
attending
sufficient
Othera
Not UC
availability or
training
wages while in
eligible
student must
(vocational,
school
seek full-time
approved, or
work
TAA)
Alabama
X
Alaska X
Arizona
X
Arkansasb X
Californiab
X
Coloradob
X
Connecticutb
X
Delaware
X
District of
X
Columbia
11 U.S. Department of Labor, Employment and Training Administration, Comparison of State Unemployment
Insurance Laws, Washington, DC, 2012, Section 5, p. 37-38.
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School
attendance
Willing to quit
does not
school or
Earned
interfere with
attending
sufficient
Othera
Not UC
availability or
training
wages while in
eligible
student must
(vocational,
school
seek full-time
approved, or
work
TAA)
Florida X
Georgia X
Hawaii X
Idahob
X
Illinoisb X
Indiana X
Iowa X
Kansasb
X
Kentucky
X
Louisianab
X
Maine
X
Maryland
X
Massachusettsd
X
Michigan X
Minnesotab
X
Mississippi
X
Missouri X
Montana
X
Nebraskab
X
Nevada X
New
X
Hampshire
New Jerseyb
X
New Mexicob
X
New York
X
North
Carolina
X
North Dakotab
X
Ohiob X
Oklahomab
X
Oregon
X
Pennsylvania
X
Puerto
Rico
X
Rhode
Island
X
South Carolina
X
South
Dakota
X
Tennessee
X
Texasb
X
Utahd
X
Vermont
X
Virginia X
Virgin
Islands
X
Washingtonb
X
West Virginia
X
Wisconsin
X
Wyoming X
Total 24
17
4 5 3
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Source: Congressional Research Services (CRS) table compiled from Comparison of State Unemployment
Insurance Laws, 2012, U.S. Department of Labor, Employment and Training Administration, pages 5-34 to 5-37.
a. The U.S. Virgin Islands do not have restrictions on UC eligibility for students attending school. Delaware
and North Carolina do not disqualify workers from UC benefits solely on the basis of school attendance.
New Mexico and Vermont provide exceptions for individuals seeking part-time work. Information was
unavailable for Puerto Rico.
b. State statute specifically mentions students.
c. Must be available for work and wil ing to quit school, except for approved training.
d. Regulation specifically mentions students.
As Table 1 shows, just three states (Alabama, New York, and South Carolina) do not provide an
exception to benefits disqualification if attending school. Many state UC programs will consider
students eligible if certain conditions are met, namely through the combination of availability for
work or seeking full-time work, or if the student is attending appropriate training. A few states
specify that a student may be eligible if a major part of his or her base period wages was for
services performed while in school.
Disqualification for Leaving Work to Attend School
State laws vary with respect to workers remaining eligible for UC benefits while leaving their
jobs to attend school. Just over half the states, including the District of Columbia, disqualify
individuals from UC benefits for leaving work to attend school. However, many states make
exceptions for students leaving work to attend approved training sessions, union apprenticeships,
or training under TAA. About one-third of states allow students to remain eligible for UC benefits
if leaving work and pursuing one of these forms of training. Finally, a small contingent of states
do not disqualify students from UC benefits for leaving work to attend school. Table 2 shows
variation among the states.
Table 2. UC Eligibility for Individuals Who Leave Work to Attend School
Eligible if
Eligible if
No Restrictions
attending
attending TAA
Not UC Eligible
approved training
training
Alabama X
Alaska
X
Arizona
X
Arkansas X
California X
Coloradoa
X
Connecticuta
X
Delaware X
District of
X
Columbia
Florida
X
Georgia
X
Hawaii
X
Idaho
X
Illinois
X
Indiana
X
Iowa
X
Kansas
X
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Eligible if
Eligible if
No Restrictions
attending
attending TAA
Not UC Eligible
approved training
training
Kentucky X
Louisiana X
Maine
X
Marylanda X
Massachusetts
X
Michigana X
Minnesota X
Mississippi X
Missouri X
Montana X
Nebraska X
Nevada
X
New Hampshire
X
New Jersey
X
New Mexico
X
New York
X
North Carolina
X
North Dakota
X
Ohio
X
Oklahoma X
Oregonb
X
Pennsylvania
X
Puerto Ricoc
Rhode Island
X
South Carolina
X
South Dakota
X
Tennessee X
Texasa
X
Utahd
X
Vermont X
Virginiae X
Virgin Islands
X
Washington
X
West Virginiaa
X
Wisconsin X
Wyoming X
Total 8
8
9
27
Source: Congressional Research Services (CRS) table compiled from Comparison of State Unemployment
Insurance Laws, 2012, U.S. Department of Labor, Employment and Training Administration, pages 5-34 to 5-37.
a. State statute specifically mentions students.
b. Disqualified for leaving work, unless required by law to attend school. Regulation specifically mentions
students.
c. Information not available.
d. Regulations specifically mentions students.
e. Based upon case law.
As Table 2 shows, most states disqualify students if they leave their jobs to attend school. The
main exceptions to this policy are if the student is leaving work to attend approved training or
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training under TAA. Only eight states have no restrictions on students leaving work and
remaining eligible for UC benefits.
Approved Training
Individual states approve the training programs they deem appropriate for students to attend and
remain eligible for UC benefits. Typically, state workforce agencies determine the training
providers that would be qualified to provide educational programs. These programs generally
include those provided by a state under the Workforce Investment Act (WIA), the Trade
Adjustment Assistance for Workers (TAA) program, and potentially other state-approved training
programs.
The Workforce Investment Act of 1998 (WIA; P.L. 105-220) is the primary federal program that
supports workforce development. Title I of WIA authorizes state formula grants to provide job
training and related services to unemployed or underemployed individuals. These programs are
primarily administered through the Employment and Training Administration of DOL, but
operated in partnership with each state.12 TAA, on the other hand, provides federal assistance to
workers who have been adversely affected by foreign trade. The Trade Adjustment Assistance
Extension Act of 2011 (TAAEA; Title II of P.L. 112-40) most recently authorized TAA.13
Because approved training is granted at the discretion of each state, the types of training offered
vary widely, even under programs eligible through WIA and TAA. Approved training is
constituted by both public and private options. These options can include employer-based
training, remedial programs, prerequisite education or coursework required to enroll in an
approved training program, technical skills classes, and various trade and vocational courses.
Training providers may have an agreement or contract with state workforce agencies to provide
these particular programs. They can be delivered in a number of ways, either through the
classroom, via correspondence or web-based applications, or apprenticeships.
Conclusion
The treatment of students within the UC program varies by state. Only a few states allow students
to attend school and qualify for UC benefits if unemployed. Generally, in approximately half the
states, students must be able to show that they are available for and seeking full-time work to be
eligible for UC benefits. This can be a high standard to meet, as many students are attending
school full-time. In addition, some states require that students demonstrate that they would be
willing to quit school to work if offered a job.
In the instance of workers leaving their jobs to attend school, states are less flexible in allowing
individuals to continue receiving UC benefits. Generally, about one-third of states allow
individuals to remain benefits eligible only if they are taking training courses under TAA, WIA,
or other state-approved program.
12 For more information about training under WIA, see CRS Report R41135, The Workforce Investment Act and the
One-Stop Delivery System, by David H. Bradley.
13 For more information on training available under TAA, see CRS Report R42012, Trade Adjustment Assistance for
Workers, by Benjamin Collins.
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The content of approved training classes varies from state to state. Typically, each state workforce
agency is granted discretion as to what constitutes approved training for the purposes of attending
school and remaining benefits eligible. States identify training providers that are eligible or
qualified to receive funds under WIA or TAA.
Author Contact Information
Julie M. Whittaker
Alan Eder
Specialist in Income Security
PMF Intern
jwhittaker@crs.loc.gov, 7-2587
aeder@crs.loc.gov, 7-9453
Congressional Research Service
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