Department Begins Workforce Pell Rulemaking
Monday, the Department of Education and the (AHEAD) committee began a weeklong negotiated rulemaking session to discuss and draft regulatory text implementing changes to Pell eligibility for students with Student Aid Index greater than total cost of attendance, and the creation of Workforce Pell, which were both enacted in the One Big Beautiful Bill Act (OBBBA). The Department intends to complete the discussion of these Pell Grant topics by Friday when it hopes the committee will reach consensus. The second session of the AHEAD Committee will take place in the second week of January and focus entirely on the earning threshold enacted in the OBBBA and reregulate the Gainful Employment and Financial Value Transparency (GE/FVT) rule. Under Secretary Nicholas Kent emphasized the Department’s commitment to meet the statutory effective date of July 1, 2026, for these provisions.
In the proposal by the Department, it is clear that it chose to interpret the creation of Workforce Pell as an extension of the existing Pell Grant program with additional eligibility criteria, and not the creation of a new need-based program for short-term programs. Operationally, this means the Department was able to add to and modify existing Pell Grant regulations instead of drafting regulations for an entirely new governing structure. This distinction was articulated during the discussion by Aaron Lacey, primary negotiator for non-profit institutions and higher education attorney at Thompson Coburn, an allied member of CECU. “We are not changing technical aspects of a program that has been around for a long time. We’re starting new in a number of areas,” said Jeffrey Andrade, deputy assistant secretary for policy, planning and innovation for the Office of Postsecondary Education.
§ 690.93 Components Determined by Governors
One of those new areas is the shared governance over program eligibility with state workforce boards and governors. Although the draft regulations require governors to publish rationale for determining when industries are high-skill, high-wage or in-demand as required by the law, several negotiators suggested the language was not detailed enough to prevent politically motivated governors from adding or removing programs from the list for reasons not contemplated by congress.
As directed by OBBBA, Governors are responsible for determining which programs are eligible for Workforce Pell and the Department asserted during today’s discussion that a Governor’s certification would be valid with the Department for the duration of an institution’s program participation agreement. Governors are also required to establish and publish the process by which a school can request a determination that one or more of its programs meets the eligibility criteria. However, a Governor can add or remove programs with little or no review by the Department during that time. “We don’t have any enforcement mechanism against the state over whether a program is approved by the governor,” said Jake Lallo, general attorney at the Department.
Jeff Arthur, primary negotiator for proprietary institutions and CECU member, has proposed a revision to this language to require more public disclosure of the state process to ensure programs with the required outcomes in the same high-skill, high-wage, or in-demand sectors are treated similarly regardless of the type of institution that offers them. The proposed text reads:
§ 690.93(d)...
(9) A publicly available list of all programs approved under this section, including for each program the program name, the corresponding CIP code, and the associated Standard Occupational Classification (SOC) code(s) or occupational titles used to determine high-skill, high-wage, or in-demand alignment.
§ 690.93(b)…
(v) As part of the Governor’s publicly available process, the Governor shall publish and maintain an online list of all programs approved under paragraph (a), including the CIP and SOC codes associated with each program’s labor market alignment determination.
§ 690.92 Eligible Programs
A significant point of interest among negotiators was the process for gaining eligibility for newly created programs. The law confusingly requires a program be offered by an eligible institution for at least a year, while also requiring the program to meet a “value-added earnings” metric which is defined in law as the median earnings of graduates three years after completion minus 150 percent of the federal poverty line; the sum must be greater than zero. Although the law explicitly states a program only need be offered for a year, the value-added earning requirement suggests a minimum of four years of operation. Several negotiators offered potential processes to expedite new program eligibility whether through a provisional status, or the use of alternative data. Preston Cooper, primary negotiator for taxpayers and the public interest, suggested allowing states to use alternative administrative data to determine a program is “likely to pass” the value-added earning requirement until the necessary federal data is available for the program. The Department said it would consider regulatory text in this direction.
§ 668.5 Written arrangements to provide educational programs
The Department proposes changes to Part 668 that would limit the amount of an eligible workforce program that can be offered by an ineligible institution or other organization through a written arrangement to 25 percent or less of the program. Previously up to 50 percent of a program could be offered by an ineligible institution through written agreements – unless there is explicit accreditor approval for such an arrangement. The issue paper recognizes this change and the “natural desire on the part of employers to seek to partner with institutions to offer eligible workforce programs, but we are particularly concerned about such arrangements in light of the risk to both students and taxpayers.”
§ 690.5 Ineligibility due to assistance from non-Federal grants
The lessor discussed topic in Monday’s discussion were the changes to calculating Student Aid Index and the enacted change for Pell Grant calculations from first dollar to last dollar in for the student aid package. Several negotiators shared concerns that this new calculation method would cause employers to reduce aid offered to students for students to maintain access to Pell Grants. Several proposals have been made to exclude employer funds from the “aid” in the calculation of Student Aid Index to avoid this outcome which will be discussed today.
The current draft text is copied below:
§ 690.5 Ineligibility due to assistance from non-Federal grants. A student shall not be eligible for a Federal Pell Grant for an award year during which the student receives grant aid from non-Federal sources, including States, eligible institutions, or private sources, in an amount that equals or exceeds the student’s cost of attendance for the award year.
Day 2 RECAP
On Tuesday the AHEAD reconvened for its second day of negotiations. The Committee’s discussion focused on which programs could be eligible, the process for Governor approval of eligible workforce programs, the process for Secretary of Education approval of eligible workforce programs, and the value-added earnings calculation.
What Programs Could Qualify
The day began with a presentation from the Department outlining the types of programs it believes could qualify for Workforce Pell. According to the PowerPoint shared with negotiators, several hundred to a few thousand existing or soon to exist programs may be able to meet the criteria. Examples discussed during the session included health related training programs, commercial driver’s license and vehicle operation programs, career and technical education programs, and child-care related programs.
The Department emphasized that placement within a particular occupational category does not, on its own, make a program eligible. As outlined in the Department’s PowerPoint, several considerations will inform which programs qualify under the proposed framework. The Department did note that state data was often incomplete or non-existent for proprietary institution program offerings, making it difficult to know whether the lists compiled in their presentation are representative of the potential eligible programs in the sector.
- Programs must satisfy all Workforce Pell eligibility requirements outlined in the draft regulation, including instructional time, hours, and program structure.
- Eligible programs will vary by state and region because governors must determine whether offerings align with high skill, high wage, or in demand sectors.
- Once Federal funding becomes available, the makeup of eligible programs may change as institutions add or revise offerings.
- State data systems provide limited visibility into programs offered within the proprietary sector, making it difficult to determine how many such programs may qualify.
- Programs must also demonstrate that they provide economic value for students by showing that graduates achieve an earnings benefit above the cost of the program.
Value Added Earnings Calculation
The value-added earnings requirement is a central accountability measure for Workforce Pell programs. Under this provision, the Department evaluates whether a program’s graduates earn enough several years after completion to justify the program’s cost. The calculation compares median earnings of program completers to an earnings threshold that reflects regional income expectations. Earnings are adjusted for regional economic differences to account for variations in local labor markets. A program must show that its value-added earnings exceed the total cost of the Workforce Pell program to qualify.
During the discussion, the Department reiterated that programs must demonstrate positive value-added earnings to remain eligible. This measure captures the earnings gain attributed to the program and compares it to the program’s published tuition and fees. The Department clarified that the requirement applies only to the cost of the Workforce Pell program and does not limit an institution’s broader tuition structure.
While the Department believes that a few thousand programs could be eligible for Workforce Pell, it remains unclear how many programs will satisfy all regulatory requirements and demonstrate positive value-added earnings.
Several negotiators asked questions to better understand how earnings data will be calculated and which years of data will be used. The Department indicated that additional information on these issues will be provided and encouraged negotiators to submit proposals and rationale to help refine the calculation and its application.
The Department also noted that although it has not yet entered into a formal agreement with another Federal agency for earnings data, the Internal Revenue Service is among the leading candidates to support the data needs of the program.
Throughout the day, the Department emphasized that it remains open to revisions to the draft text and encouraged negotiators to submit additional proposals. The AHEAD Committee is scheduled to meet again at 9 a.m. on Wednesday, December 10, to continue negotiations.
DAY 3 RECAP
AHEAD negotiations resumed Wednesday for the Committee’s third day of work. Early in the session, the Department reiterated that it remains open to reviewing new proposals and the rationale submitted by negotiators. At the same time, negotiators from the Department noted that it is necessary to begin narrowing the proposals under consideration. To support that effort, the Department set a deadline of 7:30 a.m. on Thursday for negotiators to submit any additional text for the Workforce Pell regulatory package.
A caucus was called by the Department to address issues related to distance education programs. Discussions focused on the eligibility of programs offered fully online and how Workforce Pell would apply to remote learners across state lines and throughout the country. Additional clarity on this topic is expected later in the week.
The Department convened a second caucus to discuss concerns related to the statutory requirements for program length. After the caucus concluded, Department staff reported that the discussion centered on the statutory limit that a qualifying program may not exceed 14 weeks in length. Department officials explained that they interpret the 14 week cap as not needing to be contiguous. According to the Department, this interpretation could help address concerns raised about how part-time learners would be accommodated under the proposed structure.
It is the Department’s intent that if a program becomes ineligible for Workforce Pell while a program is underway, that program may continue through completion. Students enrolled in that cohort will remain eligible for Workforce Pell for the full duration of the program, and institutions will not be required to return Workforce Pell funds for that specific offering.
A third caucus was called by Preston Cooper, representing taxpayers, to discuss job placement rates. Following the caucus, he announced that he intends to submit a joint proposal on job placement rates in coordination with several other negotiators.
Pulse checks were taken on all seven topics of proposed regulatory text for Workforce Pell. The results indicated that significant work remains before the Committee can assess whether consensus is achievable later in the week.
Pulse Check on Topic 1
Ineligibility for Federal Pell Grants Due to Receipt of Non-Federal Financial Assistance
During the discussion of Topic 1, one negotiator signaled that they would block consensus due to the current regulatory language, and another indicated that they are seeking a broader definition of non-federal dollars when determining the amount of Workforce Pell a student may receive.
Pulse Check on Topic 2
Workforce Pell Technical and Conforming Changes
While no negotiator signaled that they would block consensus on the current language under this topic, several negotiators noted that they have submitted proposals that have not yet been addressed by the Department and expressed interest in further discussion.
Pulse Check on Topic 3
Workforce Pell Definitions
Tamar Hoffman, representing legal aid organizations, stated that she would block consensus based on the current language. She is seeking additional clarity on the value added earnings terminology, guidance related to online programs, and several other elements within this section. She has submitted proposals for further consideration.
Pulse Check on Topic 4
Governor Approval of Eligible Workforce Programs
Preston Cooper indicated that he would not support consensus with the current language under this topic. His concerns focus on the standards for initial eligibility and whether the draft text provides sufficient guidance to ensure that programs that do not meet statutory expectations are excluded. He has submitted a proposal for further discussion. Jeff Arthur, representing proprietary institutions, noted that he hopes to see additional language encouraging equitable treatment of programs offered by all types of institutions when governors determine eligibility for Workforce Pell.
Pulse Check on Topic 5
Secretary of Education Approval of Eligible Programs
Several negotiators indicated that they would not be able to reach consensus on the current language. Their concerns centered on the need for clearer definitions of key terms.
Pulse Check on Topic 6
Value Added Earnings Calculation
Several negotiators signaled that they would not support consensus on the current language. They noted that multiple proposals remain outstanding and emphasized the need for additional discussion before the Committee can move forward. Department officials recognized that several proposals still require review.
Pulse Check on Topic 7
Losing and Regaining Eligibility
The Department acknowledged that revised language for this section will be released on Thursday morning, but proceeded with a pulse check to gauge the Committee’s views. A few negotiators signaled that they would not support consensus with the current language. Jeff Arthur noted the potential implications for how accreditors may respond when a program loses Workforce Pell eligibility and emphasized that additional clarity will be needed on this point.
Negotiations will resume on Thursday at 9 a.m. A final vote on consensus for the Workforce Pell provisions is expected on Friday.
DAY 4 RECAP
On Thursday, AHEAD negotiators resumed discussions on the Workforce Pell regulatory text. The department opened the session by presenting revised regulatory language to the Committee after reviewing more than 80 proposals for changes and additions to the draft text.
Under the topic of governor approval of eligible Workforce Pell programs, Jeff Arthur, primary negotiator for proprietary institutions, secured additional regulatory language requiring governors to apply a consistent and equitable process when evaluating programs offered by institutions of all types.
§ 690.93 Components determined by Governors
(3) The process and timeline for the Governor’s consultation with the state board and a determination that a program meets the requirements in paragraph (a), and the process for an institution to appeal that determination, including clear, transparent, and timely procedures that are applied consistently and equitably to all eligible institutions.
Another revision of note addressed interstate coordination on workforce needs. The department added language permitting governors to enter into bilateral agreements to recognize shared workforce demand across state lines. These bilateral agreements apply only to distance education programs and are not required for in person instruction that may occur across state lines. Under this framework, students may enroll in eligible online programs offered by institutions in another state, provided both governors determine that the occupation or sector aligns with workforce priorities and that the program satisfies the applicable eligibility criteria.
§ 690.93 Components determined by Governors
(h) The Governors of two States may enter into a bilateral agreement regarding the enrollment of students located in one of those States into some or all of the programs located in the other State, provided that:
(1) The Governor of the State in which the student is located, in consultation with the State Board, includes the relevant occupation or sector on the list developed under the process set forth in 34 CFR 690.93(b)(1)(i).
(2) The Governor of the State in which the institution offering the program is located has determined, in consultation with the State Board, that the program meets the conditions under 34 CFR 690.93(a).
Throughout the afternoon, several caucuses were called by the department and individual negotiators to discuss proposed language related to job placement and exclusions, CIP codes, accountability provisions, and other outstanding issues.
The department closed out the day by outlining expectations for Friday’s session. Officials stated that they plan to return Friday morning with revised regulatory language, engage the Committee in discussion of that new language, and then hold a final vote on consensus.