Career Education Colleges and Universities (CECU) is advocating for thoughtful policy solutions that connect the Higher Education Act (HEA), the foundational law that authorizes various federal student aid programs like Pell Grants, to jobs and the needs of underserved and adult students. We need to modernize our laws for the 21st century to help meet the Nation's growing workforce demands.
The Challenge
According to the Bureau of Labor Statistics, the United States will need 46.5 million new workers by 2024 to fill new jobs and replace scores of retirees. Job training leads to job growth, and training and career education are critical to fulfilling the nation's workforce needs and are key to fueling economic growth. Despite this opportunity, Congress has not reauthorized the HEA since 2008. Postsecondary institutions need updated laws that allow them to better complete in an globalized economy.
Our Solution
We must better align the HEA with jobs and workforce needs to modernize the law for the 21st century.
Among the innovative ideas to directly connect the Higher Education Act to jobs, CECU proposes:
- A new Workforce Pell Grant
- A common set of outcome metrics for all institutions' Title IV programs
- Uniform accountability standards set by Congress
- A revised Ability-to-Benefit program
- Connecting apprenticeships to academic degrees
- Easing students’ transfer of credits amongst institutions
- Connecting Federal Work-Study to students’ career studies
- Universal income-based repayment
- Recognition of and access to credentials
- Supporting students attending at-risk institutions
Among the innovative ideas to directly connect the Higher Education Act to jobs, CECU proposes:
- A new Workforce Pell Grant
- A common set of outcome metrics for all institutions' Title IV programs
- Uniform accountability standards set by Congress
- A revised Ability-to-Benefit program
- Connecting apprenticeships to academic degrees
- Easing students’ transfer of credits amongst institutions
- Connecting Federal Work-Study to students’ career studies
- Universal income-based repayment
- Recognition of and access to credentials
- Supporting students attending at-risk institutions
Ongoing Legislative Threats
$550 Pell Grant increase exclusion:
In November 2021, the House of Representatives passed the Build Back Better Act. The bill represented President Biden’s marquee domestic policy legislation, spending nearly $2 trillion on various social programs. The bill also would increase the maximum Pell Grant award by $550, except for students attending proprietary institutions.
The Build Back Better bill, as written, is estimated to prohibit approximately 900,000 students who attend for-profit colleges from accessing the expanded Pell Grant, which would disproportionately hurt low-income, minority, veterans, and single-parent students. The proposal would also adversely impact workforce development for essential workers in high-demand fields.
The Pell Grant increased exclusion of students attending proprietary institutions is unprecedented. In response, 17 Democratic Representatives sent a letter led by Rep. Al Lawson (D-FL) to House Democratic leadership, urging them to modify the bill.
Additionally, 17 trade associations signed a letter to include students attending for-profit colleges in the Build Back Better $550 Pell Grant increase. Here is a list of organizations that signed the letter: American Association of Colleges of Nursing, American Medical Technologists, American Traffic Safety Services Association, American Trucking Associations, Associated Skin, Nail, Hair, Bodywork and Massage Professionals, Association of the United States Navy, Aviation Technician Education Council, Beauty Changes Lives, Career Education Colleges and Universities, Choose Aerospace, Inc., Commercial Vehicle Training Association, Enlisted Association of the National Guard of the United States, International SPA Association, National Black Nurses Association, National League of Nursing, Non-Commissioned Officers Association, Professional Beauty Association, Special Operations Association of America, Veterans Education Project.
Unfortunately, House Democratic leadership refused to make substantive changes to the education provisions in the modified bill and did not change the Pell Grant provision before the final House passage.
The bill has stalled in the Senate; however, should the bill move forward with any Pell Grant increases, CECU continues to proactively work with Congress to ensure our students are not excluded from any Pell Grant increases.
Changing 90/10 to 85/15
Under the 90/10 rule [20 USC 1094(a)(24)], proprietary institutions of higher education (IHE) must derive at least 10% of their total tuition and fees revenues from non-Title IV sources (or, conversely, no more than 90% of their tuition and fees revenue from Title IV funds) during a fiscal year. The HEA and accompanying regulatory provisions specify how revenues are to be calculated. If an IHE fails to meet the rule’s requirement in a single year, its certification to participate in the Title IV aid programs becomes provisional for two institutional fiscal years. As an example, if an IHE fails to meet the rule’s requirements in two consecutive years, then it loses its eligibility to participate in the Title IV programs for at least two institutional fiscal years. The rationale behind the 90/10 rule is twofold: (1) reducing fraud, waste, and abuse at proprietary IHEs and (2) if a proprietary IHE is of sufficient quality, it should be able to attract a specific percentage of revenues from non-Title IV sources.
Provisions in the American Rescue Plan Act of 2021 (ARP Act) started the process to change this 90/10 rule. Additionally, during the Fiscal Year 2022 Appropriation process, a provision in the House Labor-HHS-Education appropriation bill attempting to adjust the 90/10 rule to 85/15 has also been proposed. In contrast to the House bill, which proposed changing the 90/10 rule to 85/15, the Senate Fiscal Year 2022 Appropriation makes no changes to the 90/10 rule. It’s a clear indication that the 90/10 rule is under focus, and policymakers will continue to make efforts to change the 90/10 further if an opportunity presents itself.
Any such changes that occur immediately will have short-and-long-term impacts that Congress and policymakers have not assessed and will have a lasting effect never seen before.
Short-Term Pell Grant expansion
Senate and House policymakers have attempted several times, most recently in the America Competes Act, to include a provision to expand the Pell Grant program to short-term programs while excluding proprietary institutions and the students they serve. The provision also seeks to end the Direct Loan program for short-term programs above 300 clock hours but less than 600 clock hours and at least 10 weeks long. To be eligible to participate in this program, the program must have a 70 percent completion rate and a 70 percent placement rate (sometimes referred to as the 70/10 rule). The Kaine-Portman Amendment would terminate this loan program 120 days after the Department of Education establishes the Job Training Federal Pell Grant program.
The termination of the loan program seems to be premised on the mistaken idea that the new Pell Grant program will provide funding to students currently being served by the loan program, obviating the need for the loan program. This would not be the case for students attending proprietary institutions who take advantage of the program or for middle-class students who are not eligible for Pell Grants.
In opposition to the provision, as written, Rep. Al Lawson (D-FL) led a group of Democratic House members in sending a letter to the Chairman of the Education and Labor Committee, Bobby Scott (D-VA), and Majority Leader Steny Hoyer (D-MD), urging them to include proprietary institutions in legislation to expand the Pell Grant to short-term programs. The letter was cosigned by Reps. Anthony Brown (D-MD), Juan Vargas (D-CA), Donald Payne Jr. (D-NJ), Darren Soto (D-FL), Yvette Clark (D-NY), and Veronica Escobar (D-TX).
In November 2021, the House of Representatives passed the Build Back Better Act. The bill represented President Biden’s marquee domestic policy legislation, spending nearly $2 trillion on various social programs. The bill also would increase the maximum Pell Grant award by $550, except for students attending proprietary institutions.
The Build Back Better bill, as written, is estimated to prohibit approximately 900,000 students who attend for-profit colleges from accessing the expanded Pell Grant, which would disproportionately hurt low-income, minority, veterans, and single-parent students. The proposal would also adversely impact workforce development for essential workers in high-demand fields.
The Pell Grant increased exclusion of students attending proprietary institutions is unprecedented. In response, 17 Democratic Representatives sent a letter led by Rep. Al Lawson (D-FL) to House Democratic leadership, urging them to modify the bill.
Additionally, 17 trade associations signed a letter to include students attending for-profit colleges in the Build Back Better $550 Pell Grant increase. Here is a list of organizations that signed the letter: American Association of Colleges of Nursing, American Medical Technologists, American Traffic Safety Services Association, American Trucking Associations, Associated Skin, Nail, Hair, Bodywork and Massage Professionals, Association of the United States Navy, Aviation Technician Education Council, Beauty Changes Lives, Career Education Colleges and Universities, Choose Aerospace, Inc., Commercial Vehicle Training Association, Enlisted Association of the National Guard of the United States, International SPA Association, National Black Nurses Association, National League of Nursing, Non-Commissioned Officers Association, Professional Beauty Association, Special Operations Association of America, Veterans Education Project.
Unfortunately, House Democratic leadership refused to make substantive changes to the education provisions in the modified bill and did not change the Pell Grant provision before the final House passage.
The bill has stalled in the Senate; however, should the bill move forward with any Pell Grant increases, CECU continues to proactively work with Congress to ensure our students are not excluded from any Pell Grant increases.
Changing 90/10 to 85/15
Under the 90/10 rule [20 USC 1094(a)(24)], proprietary institutions of higher education (IHE) must derive at least 10% of their total tuition and fees revenues from non-Title IV sources (or, conversely, no more than 90% of their tuition and fees revenue from Title IV funds) during a fiscal year. The HEA and accompanying regulatory provisions specify how revenues are to be calculated. If an IHE fails to meet the rule’s requirement in a single year, its certification to participate in the Title IV aid programs becomes provisional for two institutional fiscal years. As an example, if an IHE fails to meet the rule’s requirements in two consecutive years, then it loses its eligibility to participate in the Title IV programs for at least two institutional fiscal years. The rationale behind the 90/10 rule is twofold: (1) reducing fraud, waste, and abuse at proprietary IHEs and (2) if a proprietary IHE is of sufficient quality, it should be able to attract a specific percentage of revenues from non-Title IV sources.
Provisions in the American Rescue Plan Act of 2021 (ARP Act) started the process to change this 90/10 rule. Additionally, during the Fiscal Year 2022 Appropriation process, a provision in the House Labor-HHS-Education appropriation bill attempting to adjust the 90/10 rule to 85/15 has also been proposed. In contrast to the House bill, which proposed changing the 90/10 rule to 85/15, the Senate Fiscal Year 2022 Appropriation makes no changes to the 90/10 rule. It’s a clear indication that the 90/10 rule is under focus, and policymakers will continue to make efforts to change the 90/10 further if an opportunity presents itself.
Any such changes that occur immediately will have short-and-long-term impacts that Congress and policymakers have not assessed and will have a lasting effect never seen before.
Short-Term Pell Grant expansion
Senate and House policymakers have attempted several times, most recently in the America Competes Act, to include a provision to expand the Pell Grant program to short-term programs while excluding proprietary institutions and the students they serve. The provision also seeks to end the Direct Loan program for short-term programs above 300 clock hours but less than 600 clock hours and at least 10 weeks long. To be eligible to participate in this program, the program must have a 70 percent completion rate and a 70 percent placement rate (sometimes referred to as the 70/10 rule). The Kaine-Portman Amendment would terminate this loan program 120 days after the Department of Education establishes the Job Training Federal Pell Grant program.
The termination of the loan program seems to be premised on the mistaken idea that the new Pell Grant program will provide funding to students currently being served by the loan program, obviating the need for the loan program. This would not be the case for students attending proprietary institutions who take advantage of the program or for middle-class students who are not eligible for Pell Grants.
In opposition to the provision, as written, Rep. Al Lawson (D-FL) led a group of Democratic House members in sending a letter to the Chairman of the Education and Labor Committee, Bobby Scott (D-VA), and Majority Leader Steny Hoyer (D-MD), urging them to include proprietary institutions in legislation to expand the Pell Grant to short-term programs. The letter was cosigned by Reps. Anthony Brown (D-MD), Juan Vargas (D-CA), Donald Payne Jr. (D-NJ), Darren Soto (D-FL), Yvette Clark (D-NY), and Veronica Escobar (D-TX).