Tag: Pell

  • OPINION: Workforce Pell can lead to good jobs for students if they get the support needed for long-term success

    OPINION: Workforce Pell can lead to good jobs for students if they get the support needed for long-term success

    by Alexander Mayer, The Hechinger Report
    December 16, 2025

    Ohio resident Megan Cutright lost her hospitality job during the pandemic. At her daughter’s urging, she found her way to Lorain County Community College in Ohio and onto a new career path.  

    Community colleges will soon have a new opportunity to help more students like Megan achieve their career goals. Starting next summer, federal funds will be available through a program known as Workforce Pell, which extends federal aid to career-focused education and training programs that last between eight and 15 weeks. 

    Members of Congress advocating for Pell Grants to cover shorter programs have consistently highlighted Workforce Pell’s potential, noting that the extension will lead to “good-paying jobs.”  

    That could happen. But it will only happen if states and colleges thoughtfully consider the supports students need for success.  

    This is important, because helping students pay for workforce programs is not enough. They also need support and wraparound services, much like the kind Megan was offered at Lorain, where her program followed an evidence-based model known as ASAP that assigns each student a career adviser. 

    Related: Interested in innovations in higher education? Subscribe to our free biweekly higher education newsletter. 

    Megan’s adviser “helped me from day one,” she said, in a story posted on the college’s website. “I told her I was interested in the radiologic technology program but that I had no idea where to start. We just did everything together.”  

    Megan went on to secure a job as an assistant in the radiology department at her local hospital, where she had interned as a student. She knew what steps she needed to take because her community college supported and advised her, using an evidence-backed practice, illustrating something we have learned from the experience of the community colleges that use the ASAP model: Support is invaluable.  

    Megan also knew that her path to a full-time position in radiologic technology required her to pass a licensure test — scheduled for four days after graduation.  

    The students who will enroll in Workforce Pell programs deserve the same careful attention. To ensure that Workforce Pell is effective for students, we should follow the same three critical steps that helped drive the expansion of ASAP and brought it to Megan’s college: (1) experiment to see what works, (2) collect and follow the data and (3) ensure that colleges learn from each other to apply what works. 

    Before ASAP was developed, the higher education community had some ideas about what might work to help students complete their degrees and get good jobs. When colleges and researchers worked together to test these ideas and gathered reliable data, though, they learned that those strategies only helped students at the margins. 

    There was no solid evidence about what worked to make big, lasting improvements in college completion until the City University of New York (CUNY) worked with researchers at MDRC to test ASAP and its combination of longer-lasting strategies. They kept a close eye on the data and learned that while some strategies didn’t produce big effects on their own, the combined ASAP approach resulted in significant improvements in student outcomes, nearly doubling the three-year college completion rate.  

    CUNY and MDRC shared what they learned with higher education leaders and policymakers, inspiring other community colleges to try out the model. Those colleges started seeing results too, and the model kept spreading. Today, ASAP is used in more than 50 colleges in seven states. And it’s paying off — in Ohio, for example, students who received ASAP services ended up earning significantly more than those who did not. 

    That same experimentation and learning mindset will be needed for Workforce Pell, because while short-term training can lead to good careers, it’s far from guaranteed.  

    For example, phlebotomy technician programs are popular, but without additional training or credentials they often don’t lead to jobs that pay well. Similarly, students who complete short-term programs in information technology, welding and construction-related skills can continue to acquire stackable credentials that substantially increase their earning potential, although that also doesn’t happen automatically. The complexity of the credentialing marketplace can make it impossible for students and families to assess programs and make good decisions without help.  

    Related: OPINION: Too many college graduates are stranded before their careers can even begin. We can’t let that happen 

    A big question for Workforce Pell will be how to make sure students understand how to get onto a career path and continue advancing their wider career aspirations. Workforce Pell grants are designed to help students with low incomes overcome financial barriers, but these same students often face other barriers.  

    That’s why colleges should experiment with supports like career advising to help students identify stepping-stones to a good career, along with placement services to help them navigate the job market. In addition, states must expand their data collection efforts to formally include noncredit programs. Some, including Iowa, Louisiana and Virginia, have already made considerable progress linking their education and workforce systems.  

    Offering student support services and setting up data systems requires resources, but Workforce Pell will bring new funds to states and colleges that are currently financing job training programs. Philanthropy can also help by providing resources to test out what works best to get students through short-term programs and onto solid career paths.  

    Sharing what works — and what doesn’t — will be critical to the success of Workforce Pell in the long-term. The same spirit of learning that fueled innovation around the ASAP model should be embedded in Workforce Pell from the start.  

    Alexander Mayer is director of postsecondary education at MDRC, the nonprofit research association. 

    Contact the opinion editor at [email protected]. 

    This story about Workforce Pell was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for Hechinger’s weekly newsletter. 

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  • Pell Grant program faces up to $11B annual budget shortfall

    Pell Grant program faces up to $11B annual budget shortfall

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    Dive Brief: 

    • The Pell Grant program faces a 10-year shortfall of up to $97 billion, with the recent expansion to include short-term workforce programs adding to existing structural funding problems, according to a Friday analysis from the nonprofit Committee for a Responsible Federal Budget. 
    • The massive spending package Republicans passed this summer, called the One Big Beautiful Bill Act, gave the Pell Grant program $10.5 billion in one-time funding to avoid a looming budget shortfall. However, this will only delay the shortfall, according to analysts.
    • CRFB expects the Pell Grant program’s costs to exceed its funding by $6 billion to $11 billion each year over the next decade. “The underlying structural gap between costs and appropriations remains unaddressed, and in fact was made worse under OBBBA,” the analysts said.

    Dive Insight:  

    Before Republicans passed their spending package, the Pell Grant program was expected to deplete its reserves by the 2025 fiscal year. With the $10.5 billion infusion, lawmakers staved off that crisis — but only by about two years, according to CRFB’s analysis. 

    That’s in part because the legislative package also expands Pell Grant funding to programs as short as eight weeks, starting in July 2026. CRFB pointed to Congressional Budget Office data estimating that the expansion, known as Workforce Pell, will add about $2 billion to the program’s costs over the next decade. 

    But authors of Friday’s analysis expect this number to be much higher —  $6 billion or more — depending on how many students apply for Workforce Pell, how states and institutions carry out the program, and how the U.S. Department of Education interprets and enforces the accountability measures established by Congress. 

    “History suggests that when new eligibility is created, enrollment often exceeds initial projections,” analysts said, citing a 2020 report on proposals at the time for short-term Pell from New America, a left-leaning think tank.

    In 2008, lawmakers expanded Pell Grants to be available year-round. At the time, the CBO estimated the program would cost $2.6 billion over the next five years. But in 2011, a U.S. Education Department official testified before Congress that the program expansion was costing 10 times higher annually than expected. 

    Similarly, in 2005, Congress lifted restrictions on federal student aid flowing to fully online colleges. While the Education Department expected the change to cost $697 million over 10 years, online-only colleges received “billions in federal aid dollars” in the 2018-19 award year alone, New America found. 

    In Friday’s analysis, researchers estimated the Pell Grant program would face a $61 billion 10-year shortfall if lawmakers keep its appropriations adjusted for inflation and maintain the maximum award of $7,395. If lawmakers keep both appropriations and the maximum award flat, that shortfall would reach $88 billion. 

    Moreover, the shortfall would hit $97 billion if lawmakers raise Pell Grant funding and the maximum award in line with inflation and Workforce Pell enrollment outpaces expectations, the researchers estimated. 

    The Education Department is meeting this week with selected students, employers, college officials and other stakeholders in a process known as negotiated rulemaking to work out regulations for implementing the new program. Under the 2025 statute, short-term programs must have a 70% job placement rate and a 70% graduation rate to be eligible for Pell Grants. 

    In a draft of regulatory language released last week, the Education Department proposed that, for the first couple years of the program, job placements would count regardless of what fields students enter. However, after the 2027-28 award year, programs would have to show that at least 70% of their students land jobs specifically in fields for which they were being trained.

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  • Education Department outlines potential Workforce Pell regulations

    Education Department outlines potential Workforce Pell regulations

    The U.S. Department of Education recently released a draft proposal of regulatory language that outlines how short-term programs could become — and remain — eligible for the newly created Workforce Pell Grants. 

    The Workforce Pell program will allow students in programs as short as eight weeks to receive Pell Grants. It was created as part of the massive spending and tax package that Republicans passed this summer and takes effect in July 2026. 

    The Education Department released the draft proposal ahead of negotiations next week to hash out the regulatory language governing how the program will operate. 

    In a process known as negotiated rulemaking, stakeholders representing different groups affected by the regulations are to meet Monday to begin discussing the policy details of the Workforce Pell program. Participants include students, employers and college officials. 

    If they reach consensus on regulatory language, the Education Department will have to use that when formally proposing regulations for Workforce Pell. If the stakeholders don’t reach consensus, the agency will be free to write its own regulations. 

    The draft proposal outlines the steps state officials will have to take for workforce programs to begin qualifying for Workforce Pell Grants and what student outcome metrics they would need to hit to remain eligible for the grants. 

    How would programs get approved for Workforce Pell?

    The massive budget bill expands Pell Grants to certain workforce-training programs lasting between eight to 15 weeks. For programs to be eligible, governors must consult with state boards to determine if they prepare students to enroll in a related certificate or degree program, meet employers’ hiring needs, and provide training for high-skill, high-wage or in-demand occupations, among other requirements.

    Under the Education Department’s draft proposal, each state’s governor would work with its workforce development board to establish which occupations are considered high-skill, high-wage or in-demand and publicly share how the state made those determinations. Governors would also have to seek feedback from employers to develop a written policy for determining whether programs meet local hiring needs. 

    As established in the spending bill, short-term programs must then receive approval from the Education Department’s secretary before they can qualify for Workforce Pell. Under the statute, programs have to exist for at least one year before they can get approval. 

    The Education Department’s proposal adds that the secretary wouldn’t be able to approve a program until “one year after the Governor determines that the program met all applicable requirements.” 

    This means that “all programs would need to wait an additional year before becoming eligible, even if they had already existed for more than a year,” according to a Thursday analysis of the draft from James Hermes, associate vice president of government relations at the American Association of Community Colleges. 

    AACC plans to work with negotiators to push for that provision to be changed, Hermes said. 

    How will programs maintain eligibility?

    Under the Education Department’s draft language, programs would need to maintain a job placement rate of 70% to remain eligible during the first two years of the Workforce Pell program. But after the 2027-28 award year, they would need 70% of their graduates to specifically land jobs in fields for which they’re being trained, according to the proposal. 

    During each award year for Workforce Pell, the statute bars programs from posting tuition and fee prices that are higher than the “value-added” earnings of their students. It calculates that difference by subtracting 150% of the federal poverty line from the median earnings of students who completed their program three years prior. 

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  • How rare are colleges that enroll and graduate high shares of Pell Grant students?

    How rare are colleges that enroll and graduate high shares of Pell Grant students?

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    When it comes to colleges where Pell Grant recipients are at least 55% likely to graduate, there are not a whole lot throughout the U.S. In fact, nearly half of states — many of them Southern with some of the highest poverty rates in the country — don’t have any at all.

    That’s what Becca Spindel Bassett, higher education professor at the University of Arkansas, discovered in a recent analysis in which she sought to identify and map institutions of higher education that she describes as “equity engines.” 

    These are colleges where at least 34% of the students receive Pell Grants and at least 55% of those Pell Grant recipients earn a bachelor’s degree within six years.

    Out of the 1,584 public and private nonprofit four-year institutions that Bassett studied nationwide, she found only 91 — or less than 6% — that qualified for her “equity engine” distinction. 

    And they’re all clustered in 26 states, resulting in what Bassett calls a “spatial injustice” for low-income students who live in one of the states without any equity engines or in areas with limited access to such institutions.

    The almost eight dozen existing equity engines represent a diverse range of institutional types, including regional public universities, small Christian colleges and historically Black institutions. 

    As for whether states can invest more in colleges that are close to being equity engines — a key recommendation of Bassett’s study — it all depends.

    “It’s worth noting that over half of Equity Engines are private colleges and universities, so their relationship to the state and dependency on state funding varies,” Bassett said in an email to Higher Ed Dive.

    But improving Pell graduation rates isn’t only a question of funding models, she said. 

    Leaders at aspiring equity engines can learn best practices and approaches from these colleges and should be prepared to enact “organizational learning and change,” Bassett said. However, much is unknown about what enables colleges to become equity engines, including whether it depends on their programs and services or their policy and funding environments. 

    While Bassett’s study doesn’t answer those questions, a forthcoming book will describe how two of the colleges she identified as equity engines were able to achieve their results, she said. 

    Michael Itzkowitz, founder and president of the HEA Group, a higher ed-focused research firm and consultancy, said in an email that identifying colleges with strong graduation rates is a “good first step” because students who earn a degree “typically earn more than those who do not.” 

    However, Itzkowitz, who under former President Barack Obama served as the director of The College Scorecard — an online federal tool with various data on higher education institutions — added that it’s also critical to consider whether graduates are actually better off economically since “not all institutions and degrees are created equal.”

    “Students who earn a credential at one institution may experience wildly different outcomes if they earned the same degree elsewhere,” he said.

    David Hawkins, chief education and policy officer at the National Association for College Admission Counseling, said in an email that colleges would do well to emulate the equity engines Bassett identified, such as the University of Illinois Chicago. Bassett’s study calls the university a “major driver” of bachelor’s degree completion among Pell Grant recipients in the state, noting those students have a 58% six-year graduation rate.

    Among other things, Hawkins said, such institutions deploy a wide range of services — such as evening or online courses for working students, and transportation to campus — that have been proven to help low-income students cross the finish line.

     “From my perspective, the United States will only remain competitive if we can invest in a postsecondary infrastructure that serves all students who seek opportunity through higher education,” Hawkins said.  

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  • Are States Prepared for Workforce Pell?

    Are States Prepared for Workforce Pell?

    Thanks to the One Big Beautiful Bill Act becoming law this summer, workforce Pell is now a reality and federal aid dollars are expected to flow to low-income students in short-term programs as soon as next July.

    But now comes the hard work of figuring out which programs are eligible—and some states aren’t ready, according to a new report from the State Noncredit Data Project, which helps community college systems track data related to noncredit programs. Not all states collect the data needed to make that determination, and some offer programs that wouldn’t make the cut, the report concluded.

    Under the legislation, short-term programs need to meet certain requirements to qualify for Pell money. For example, state governors need to verify they align with high-skill, high-wage or in-demand jobs. Programs also must be able to build toward a credit-bearing certificate or degree program and be “stackable and portable across more than one employer” unless preparing students for jobs with just one recognized credential. They have to exist for at least a year and meet outcomes goals, including completion and job-placement rates of at least 70 percent. And programs can’t charge tuition higher than graduates’ median “value-added earnings,” or the degree to which their income exceeds 150 percent of the federal poverty line three years out of the program.

    But some states collect more data than others on community colleges’ noncredit education, which encompasses many of the programs likely to qualify for workforce Pell, according to the report. It based its findings on course and program-level data from eight states: Iowa, Louisiana, Maryland, New Jersey, Oregon, South Carolina, Tennessee and Virginia.

    “What we’re going to see is varying degrees of difficulty” for different states, said co-author Mark D’Amico, a higher education professor at University of North Carolina at Charlotte. “States that have more robust data on noncredit community college education are going to be at a little bit of an advantage.”

    The report found that most states track basic metrics such as the length of a program. But two out of the eight states had no state-level data on noncredit credential outcomes. Half of the states didn’t collect any data on labor market outcomes like earnings and employment rates. And multiple states didn’t keep track of whether students completed credentials or went on to pursue credit-bearing programs. The report emphasized that while individual institutions might have more detailed data on their programs, gaps in statewide data could create challenges as states work with institutions to prove their programs’ eligibility for workforce Pell.

    “Most states have some of the fundamental data,” D’Amico said, “but I think when it comes to the credentials’ labor market outcomes, completion, stackability, those are going to be a little bit more difficult to identify.”

    The report predicted that some states, like Iowa, Louisiana and Virginia, may have an easier time proving which programs meet the criteria because they already have state funding for noncredit programs that requires colleges to report relevant data. For example, Iowa includes noncredit education in its state funding formula for workforce training programs, and Louisiana has a state scholarship for such programs.

    Co-author Michelle Van Noy, director of the Education and Employment Research Center at Rutgers University, said states’ data infrastructure for noncredit programs is still a “work in progress,” but she’s seen “quite a progression” in recent years. She’s optimistic they’ll continue to improve.

    “It is my hope that Workforce Pell implementation can be done in a way that will support the broader development of data and quality systems for noncredit education and nondegree credentials within states,” Van Noy wrote in an email to Inside Higher Ed.

    But data isn’t the only issue. The report also found that typical noncredit programs weren’t necessarily long enough to meet the standards for workforce Pell. Except for lengthier workforce programs at the Tennessee Colleges of Applied Technology, the median number of hours for occupational training programs ranged from 15 hours in New Jersey to 100 hours in Virginia, falling short of the 150-hour, eight-week threshold. Institutions could group their courses into longer programs in the coming months. But it’s not yet clear if making such a change would affect the requirement that programs exist for at least a year.

    “Anyone that may be thinking that all of a sudden, all noncredit programs are going to be eligible, the data show that’s not the case,” D’Amico said. “We’ll see what happens over time.”

    The report offered a set of recommendations for how states can ready themselves for workforce Pell. For example, it urged state officials to take stock of which metrics they still need to collect to fall in line with the policy’s guardrails and encouraged state and college officials to work together to start identifying programs that could be eligible. The report also suggested colleges consider reconfiguring programs so noncredit offerings serve as on-ramps to credit-bearing programs and meet other structural requirements.

    Further details about how workforce Pell will work are going to be hashed out in a negotiated rule-making process this fall, but D’Amico said states shouldn’t wait for that.

    “I would use the guardrails now, use the data that they have now, to begin to do that pre-identification” so they have “a little bit of time to begin to fill some of those gaps in existing data,” D’Amico said.

    He also hopes states’ preparation for workforce Pell pushes forward “a larger conversation” they’re already having about the quality of short-term noncredit programs over all.

    The overarching goal is “ensuring that noncredit programs are designed well, have credentials associated with them linked to further education and are really designed in a way that’s going to be beneficial to students and ultimately help the local and state economies that these programs are going to serve,” D’Amico said.

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  • How the Workforce Pell Grant Could Transform Higher Ed and Workforce Training

    How the Workforce Pell Grant Could Transform Higher Ed and Workforce Training

    Higher education is at an inflection point. As college enrollment continues to decline and pressure mounts to demonstrate return on investment, the federal government has responded with a potentially transformative shift: the creation of Workforce Pell Grants.

    Included in the sweeping One Big Beautiful Bill Act (OBBBA) recently signed into law, this expansion of Pell Grant eligibility could open the door to new student populations, new revenue streams, and new institutional strategies — if colleges and universities act quickly and strategically. 

    What is the Workplace Pell Grant? 

    Traditionally, Pell Grants have been limited to students enrolled in credit-bearing, degree-seeking programs. That changed with the passage of OBBBA. Workforce Pell expands access to federal financial aid for students enrolled in short-term, non-degree training programs that lead directly to high-demand jobs. 

    Under the law, students may now use Pell Grants to pay for qualifying workforce training programs that meet the following criteria: 

    • Are between 150 and 600 clock hours (roughly 8 to 15 weeks of instruction); 
    • Are offered by eligible institutions of higher education (IHEs) 
    • Lead to industry-recognized credentials tied to in-demand occupations as defined by the U.S. Department of Labor and/or state workforce boards. 

    This development reflects a growing bipartisan consensus that higher education must play a more responsive role in preparing learners for rapidly evolving labor market needs. 

    Why Workforce Pell matters for colleges and universities 

    The proposed expansion of Pell Grant funding isn’t just a policy update — it’s a strategic opportunity. Here are some key opportunities institutions should be paying attention to:

    1. New enrollment markets 

    Workforce Pell unlocks funding for adult learners, displaced workers, and non-traditional students who may not have the time, resources, or need to pursue a two- or four-year degree. For institutions facing enrollment declines, particularly at the community college level, this represents a powerful new market. 

    2. Revenue diversification 

    Short-term credentialing programs — especially those that can scale — offer a way to generate net new revenue without over-reliance on traditional tuition models. With federal aid now available, these programs become more accessible and financially sustainable. 

    3. Employer partnerships 

    The law encourages alignment between institutions and regional labor market demands. Institutions that already collaborate with employers or workforce boards will be well-positioned to fast-track qualifying programs and potentially receive direct funding support or partnership commitments. 

    4. Strategic positioning 

    Institutions that embrace short-term, skills-based credentialing can position themselves as hubs of workforce development and talent pipelines. This enhances their relevance with local governments, employers, and adult learners alike. 

    Ready for a Smarter Way Forward?

    Higher ed is hard — but you don’t have to figure it out alone. We can help you transform challenges into opportunities.

    How can institutions prepare for the Workplace Pell? 

    Now is the time for higher ed leaders and innovators to act on these policy changes. Here’s where you can start: 

    1. Audit existing offerings 

    Begin by reviewing current non-credit or certificate programs. Identify which ones could meet the new Workforce Pell criteria with limited modification—particularly programs already tied to industry credentials and high-demand jobs. 

    2. Build approval infrastructure 

    Programs must be approved by the U.S. Department of Education and/or state agencies. Start building a compliance plan, including documentation of program outcomes (e.g., job placement rates, earnings gains) and accreditation alignment. Consider appointing a cross-functional task force including financial aid, academic leadership, compliance, and workforce liaisons. 

    3. Seek out strategic partnerships 

    Engage with local employers, chambers of commerce, and workforce boards to validate demand and align curriculum. Public-private partnerships can strengthen program justification and outcomes data—key elements for gaining approval and maintaining eligibility. 

    4. Invest in marketing and outreach 

    Many potential Workforce Pell students are not currently in your database. Institutions must rethink marketing strategies to reach adult learners, incumbent workers, and individuals navigating career transitions. Messaging should highlight affordability, short duration, and job outcomes. 

    5. Track the data 

    Institutions must monitor the performance of Workforce Pell students and programs. The Department of Education will evaluate outcomes like employment rates and earnings. Underperforming programs may lose eligibility, so building robust reporting systems is not optional — it’s critical. 

    A new era of credentialing is coming 

    The Workplace Pell Grant represents more than a funding change — it’s a shift in federal policy philosophy. It signals growing recognition that short, focused training can be just as powerful as a traditional degree in driving upward mobility. 

    This policy has the potential to reshape the education market within a few years, favoring modular, job-connected learning and expanding access for nontraditional students. For institutions ready to lead, the opportunity is clear. 

    At Collegis, we partner with institutions to navigate policy shifts like the Workplace Pell with confidence, bringing the strategy, technology, and operational support needed to move quickly, ensure compliance, and deliver real impact. 

    The future of workforce-connected education is coming fast. Let’s lead it together. 

    Innovation Starts Here

    Higher ed is evolving — don’t get left behind. Explore how Collegis can help your institution thrive.

    Tricia serves as vice president and general counsel at Collegis Education, bringing years of deep experience in setting strategy, overseeing compliance, and leading policy development. She also directs contract and litigation management, driving efficiency and alignment across legal and operational functions.

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  • How Colleges and States Can Make Workforce Pell a Reality

    How Colleges and States Can Make Workforce Pell a Reality

    Community colleges secured a massive legislative win earlier this month after more than a decade of advocacy. Workforce Pell, at long last, is en route to become a reality.

    The One Big Beautiful Bill Act, signed into law July 4, extends Pell Grants to low-income students enrolled in eligible short-term programs, between eight and 15 weeks long. The policy shift is expected to put money in the pockets of hundreds of thousands of students per year to help them afford these quicker, increasingly popular programs—and bring an influx of funds to the institutions that offer them. 

    But realizing those gains will take some time, and with the policy scheduled to get off the ground next summer, some experts are worried a year won’t be long enough to parse the program’s details and ensure a smooth rollout.

    Lawmakers in Congress and colleges have been working toward some form of workforce Pell since former senator Mary Landrieu of Louisiana pushed it forward as a part of the JOBS Act in 2014.

    Since then, multiple attempts to enact the Pell expansion have failed even as the idea gained more bipartisan support. And for a moment in late June, workforce Pell seemed dead in the water when a nonpartisan Senate official, known as the parliamentarian, claimed it violated the rules of the Senate’s reconciliation process. Senators ultimately kept it in their version of the bill but limited the new Pell funds to accredited providers, appeasing the parliamentarian.

    “We’re very thankful to the persistence of our champions in Congress on this legislation from both parties in both chambers, for the commitment they made to this legislation,” said David Baime, senior vice president of government relations at the American Association of Community Colleges, noting that while the bill was partisan, support for this provision has been “bipartisan all down the line.”

    Community college leaders are “extremely enthusiastic” about the policy change after the immense “political effort that’s gone into this,” he added. “We consistently hear reports from our campuses about the importance of finding financing sources for low-income students to participate in these programs.”

    Others, however, feel trepidation, as workforce Pell is on the precipice.

    Wesley Whistle, project director for student success and affordability at New America, a liberal think tank, said for-profit colleges and online program managers, which set up short-term online programs for community colleges and other institutions, have also been eagerly awaiting the policy shift. Despite safeguards built into the legislation, such as job-placement rates, he worries students will still be lured into subpar programs at for-profits or slapdash, mass-produced online programs also eligible for the funds.

    “I hope I’m wrong,” he said. “We’re talking about our most vulnerable students.”

    Despite the bill’s passage, debates over workforce Pell are hardly over. Now, the hard work of planning for implementation begins.

    What Happens Next

    Workforce Pell is slated to take effect next July. But for that to happen, numerous details need to be hashed out by the U.S. Department of Education, states and program providers in the coming months.

    Under the legislation, short-term programs need to meet a set of standards to be eligible for Pell money. And the task of making sure programs meet the qualifications is divvied up between states and the federal government.

    The Education Department is responsible for checking that programs have existed for at least a year, boast completion and job-placement rates of at least 70 percent, and charge tuitions below graduates’ median “value-added earnings,” or the degree to which their income exceeds 150 percent of the federal poverty line three years out of the program.

    State governors must ensure short-term programs prepare students for high-skill, high-wage or in-demand jobs. The resulting credentials also must be “stackable and portable across more than one employer,” unless preparing students for jobs with just one recognized credential. Credentials need to count toward academic credit for a certificate or degree program, as well.

    Still, many questions linger about how workforce Pell will operate—likely to be answered through negotiated rule making, a lengthy process by which the Education Department creates rules and regulations by convening and listening to key stakeholders and experts, as well as public comment.

    “There isn’t a lot of meat on the bones of the outline of what implementation would look like,” said Katie Spiker, chief of federal affairs for the National Skills Coalition, a research and advocacy organization focused on workforce training. “A whole lot of decisions and next steps … that will ultimately decide how impactful and effectively short-term Pell rolls out are still left to be determined.”

    For example, some states already have quality frameworks in place for short-term programs and have spent more than $5 billion subsidizing these programs; it’s unclear how federal workforce Pell will work alongside these existing state-level initiatives. The legislation also doesn’t say who’s involved in deciding how “high-skill, high-wage or in-demand” jobs are defined. Spiker hopes those decisions draw on input from business leaders, education providers and state workforce agencies to make “public workforce and education systems better aligned.”

    Whistle agreed some of the guardrails need ironing out. He was heartened to see a tuition limit based on graduates’ salaries—a new addition since earlier versions of the policy—but he finds aspects of the requirement murky. For example, bachelor’s degree holders qualify for workforce Pell under the law, so he worries their higher salaries could throw off the metric, intended to ensure tuitions are reasonable relative to what graduates will earn. The measure is also based on graduates’ earnings three years down the line, raising questions about how to ensure programs younger than three years don’t rip students off, he said.

    Colleges’ To-Do List

    As the department works through the policymaking process, colleges will also have their own work to do to get workforce Pell ready.

    Higher ed institutions that want to participate will need to collect the data to prove they meet eligibility metrics, said Jennifer Stiddard, senior director of government relations at Jobs for the Future, an organization focused on the intersection between education and the workforce. If they don’t have that data, they’ll need to build up the reporting infrastructure.

    In addition to measuring completion and job-placement rates, “do they think they have the data to prove a program is in demand?” Stiddard said. “Are they going to be able to demonstrate that the program articulates for credit?”

    She expects community college systems in some states will be more ready than others to answer those questions, based on their states’ existing investments in short-term programs. For example, Virginia community colleges already have outcomes data on hand because of the FastForward program, which offers short-term training for jobs locally in high demand, with the state covering much of the cost. Institutions in other states, like Indiana, Iowa, Louisiana, Michigan, North Carolina and Texas, may have a head start, as well, she said. And some colleges that are further behind could decide it’s not worth it.

    Baime, of AACC, said the association plans “to work as closely as we can with the administration to ensure that institutions are able to make their programs eligible as soon as possible.”

    Among community college leaders, “the overwhelming feeling, of course, is positive,” he added, “but there are issues of implementation that need to be ironed out sometime hopefully before next July 1 so we can get this program up and running.”

    An ‘Aggressive’ Timeline

    Some experts guffawed at the yearlong timeline set for implementing workforce Pell.

    Karishma Merchant, associate vice president of policy and advocacy at Jobs for the Future, called the July 2026 deadline “aggressive” but “possible” if the department gets started immediately. (Workforce Pell is just one item on the department’s task list for the next year, and experts are skeptical that the agency can get all the work done.)

    Even if the process could be done in a year, Spiker believes it shouldn’t be. She said a year doesn’t seem like an “effective and reasonable” amount of time to solicit feedback from different stakeholders and disentangle how the program aligns with the patchwork of existing state investments in short-term training.

    “We will be encouraging the department and states to take the time to be able to do a successful implementation that enables short-term Pell to grow over time and to serve more students and more workers, instead of pushing just to meet a relatively arbitrary timeline,” Spiker said.

    She emphasized that the process comes on the heels of drastic staff cuts at the Education Department and a larger plan to dismantle the agency, which so far includes shifting career and technical education and adult basic education programs to the Department of Labor.

    These changes are “taxing already on the agency,” she said, “and then to be spearheading an implementation simultaneous with all of those huge shifts … just makes the path forward even more difficult.”

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  • Pell Grant Dollars Are Left Unclaimed: What That Means for Students and States

    Pell Grant Dollars Are Left Unclaimed: What That Means for Students and States

    Title: Pell Dollars Left on the Table

    Authors: Louisa Woodhouse and Bill DeBaun

    Source: National College Attainment Network

    Pell Grants have long supported low-income students as they pursue higher education, increasing the financial capabilities and academic opportunities afforded to students. However, receiving federal financial aid through Pell Grants is dependent on filing the Free Application for Federal Student Aid (FAFSA), which can serve as a barrier to students.

    The National College Attainment Network (NCAN) has published a report on the unclaimed Pell Grants left on the table by high school graduates. Approximately 830,000 Pell Grant-eligible students did not complete FAFSA in the 2024 cycle, resulting in nearly $4.4 billion in unclaimed Pell Grant awards. These unclaimed funds are valuable to both students and states, with the ability to further the educational pursuits of low-income students and strengthen state economies.

    NCAN has run reports detailing the value of unclaimed Pell Grants over the past four years. Typically, nearly 60 percent of high school graduates complete the FAFSA by June 30, with completion rates trailing off markedly as students begin their summer.

    However, due to the technical challenges and delayed launch of FAFSA that occurred in the 2024 cycle, by the end of June, only 50 percent of high school graduates had completed the form. By August 30, 57 percent of students had filed the FAFSA, decreasing the amount of financial aid left on the table. The implications are clear: hindrance to the financial aid application process, whether that be through technical difficulties, decreased assistance, or short staffing, can result in many students losing access to Pell Grant funds.

    The impact of lower FAFSA completion rates, and therefore more unclaimed Pell Grants, is not felt exclusively by students but by states as well. In 2024, students in California and Texas each left nearly $550 million in Pell Grant awards unclaimed. While these states lose the most when FAFSA completion rates are low, they also stand to gain the most if completion rates increase.

    Analysis from NCAN finds that if FAFSA completion rates had increased by an additional 10 percentage points this year, California would have seen a $145 million increase in Pell Grant awards while Texas would have received an additional $130 million. The additional federal aid could translate into more students attending postsecondary institutions, filling workforce gaps and strengthening the states’ economies.

    In establishing the significance of increasing FAFSA filing rates for low-income students, NCAN offers commentary on how states can better support students, especially in the wake of potential policy changes directed at higher education. States can fund FAFSA completion efforts, providing additional in-school and online resources for students to access when filing. Additionally, FAFSA data sharing among states may enable high school counselors and local college access partners to better target students that could benefit from additional assistance.

    To read more about unclaimed Pell Grants and the role states can play on bolstering FAFSA completion rates, click here.

    —Julia Napier

    If you have any questions or comments about this blog post, please contact us.

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  • 13-Percentage-Point Gap in Pell vs. Non-Pell Completion

    13-Percentage-Point Gap in Pell vs. Non-Pell Completion

    A survey of community colleges finds, across five states, Pell Grant recipients have lower success rates compared to their peers.

    Eduard Figueres/iStock/Getty Images

    Low-income students can experience a variety of barriers to success in college, and new data from the Richmond Federal Reserve points to gaps in success and completion among Pell Grant recipients at community colleges, compared to their peers.

    An analysis of a 2024 survey of two-year public institutions in Maryland, North Carolina, South Carolina, Virginia and West Virginia identified a 13-percentage-point gap in success rates between Pell Grant recipients and those who do not receive the Pell Grant. Forty percent of Pell Grant students achieved at least one metric of success, versus 53 percent of non-Pell recipients.

    Methodology 

    The 2024 Survey of Community College Outcomes includes data from five states—Maryland, North Carolina, South Carolina, Virginia and West Virginia—and 121 colleges. Data includes all degree- or certificate-seeking students enrolled during the 2019–20 academic year, including dual-enrollment students.

    Around 34 percent of students included in the study received a Pell Grant while enrolled at a community college, (compared to the national average of 32 percent). Dual-enrollment students are not eligible for the Pell Grant.

    The background: Pell Grant recipients, who are low-income students enrolled in a college or university in the U.S., are more often to be enrolled at public institutions, and the greatest share are from families who earn less than $20,000 annually.

    Success, as defined by the Richmond Fed, means a degree- or certificate-seeking student at a community college completed one of the following over a four-year period following enrollment:

    • Earned an associate degree
    • Earned a diploma or credit-bearing certificate
    • Earned an industry- or employer- recognized licensure or credential
    • Transferred to a four-year institution prior to degree or award attainment
    • Persisted by completing at least 30 credit hours

    Over all, Pell and non-Pell students completed an associate degree at similar rates (19 percent), but Pell students were less likely to transfer (10 percent of Pell versus 20 percent of non-Pell) or complete a credential (6 percent versus 7 percent).

    Digging into the data: Researchers qualify that while there is a correlation between receiving a Pell Grant and graduation, that does not imply causation, or that receiving Pell Grant funding leads to lower outcomes.

    “Students who qualify for and receive Pell Grant funding may have substantively different characteristics than non-Pell students—differences that could be driving the differences in outcomes,” wrote Laura Dawson Ullrich, director of the Community College Initiative at the Richmond Fed, in a blog post.

    North Carolina was the only state with higher associate degree completion rates among Pell students, but this could be due to how the state classifies dual-enrollment students as degree-seeking and their ineligibility for the Pell Grant.

    South Carolina had the highest transfer rate among Pell (19.3 percent) and non-Pell recipients (27 percent), which could be a result of Clemson University and the University of South Carolina’s bridge programs with community colleges, Ullrich wrote.

    Low-income students are more likely to experience basic needs insecurity, which can hinder persistence and completion. The Richmond Fed plans to conduct more surveys focusing on wraparound student supports and how the existence of these resources may contribute to Pell Grant recipients’ success.

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  • More Pell Grant Recipients Enrolling at Top-Tier Universities

    More Pell Grant Recipients Enrolling at Top-Tier Universities

    Title: Achieving Greater Socioeconomic Diversity at Highly Endowed Colleges and Universities

    Author: Phillip Levine

    Source: Brookings Institution

    Since the 2014-15 academic year, the share of students receiving a Pell Grant at institutions with large endowments (over $250,000 and $500,000 per full-time equivalent student, respectively) has increased. Pell Grant recipience is often used as a proxy for low-income status, pointing to an increase in the socioeconomic diversity of highly endowed institutions in the past decade. To pinpoint the source of this increase, the author of a new Brookings Institution brief examines several variables: eligibility, admissions standards, and student application behavior.

    Importantly, the eligibility requirements to receive a Pell Grant have changed over the years. The maximum award amount increased during the Great Recession while incomes fell, raising the number of people who qualified. From the 2008-09 to 2010-11 academic years, the share of students receiving a Pell Grant at institutions with large and very large endowments jumped from 12 percent to 17 percent.

    According to the author, changes in eligibility can likely explain part of the increase in Pell Grant recipience during the Great Recession. Since then, however, the maximum award amount in real dollars has decreased, despite the share of students receiving Pell Grants at highly endowed institutions continuing to rise.

    Adjusting for inflation to 2023 dollars, in the 2013-14 academic year, the maximum award was $7,410. Ten years later, in the 2023-24 academic year, the maximum award was $7,395. Over this period, the economy recovered and the share of students receiving Pell Grants across higher education writ large decreased. Because the figures at these institutions diverge from national figures, eligibility changes—and therefore the number of people qualifying—are likely not the cause of the increase in Pell Grant recipients at highly endowed institutions over the past decade.

    Examining average SAT scores from institutions with large and very large endowments indicates that changing admissions standards for Pell Grant students is not the source of the rise in socioeconomic diversity.

    When comparing scores from 2007-08 and 2011-12 with those from 2015-16 and 2019-20, the gap between the average scores of students with and without a Pell Grant at institutions with very large endowments decreased from 72 points in 2008/2012 to 58 points in 2016/2020. At institutions with large endowments, the gap in scores between Pell Grant recipients and those not receiving a grant narrowed even more, from 98 points in 2008/2012 to 51 points in 2016/2020, representing a statistically significant change. The shrinking gaps suggest that admissions standards for Pell Grant recipients have not been lowered.

    Because eligibility and admissions standards cannot explain the increase in the share of students at highly endowed institutions, it is likely that a higher number of Pell Grant recipients are applying to highly endowed schools and then choosing to enroll. Emerging research from the beginning of the decade on undermatching among low-income students coincides with an expansion of institutional initiatives to overcome these barriers, which may be contributing to higher application rates. Organizations like uAspire and Posse, which aim to recruit low-income, marginalized students, have also advanced this effort.

    While there are many barriers for low-income students to attend higher education, the evidence suggests there has been progress in improving access for these students at highly endowed institutions. Institutional commitment to promoting social mobility while adhering to their academic missions will not only benefit the institutions themselves but society at large as well.

    To read the full report, click here.

    —Erica Swirsky

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