Dive Brief:
- The U.S. Department of Education on Monday released final regulations detailing the process for how programs as short as eight weeks can get approval from their governors and the federal government to be eligible for Pell Grants.
- The rule carries out the statutory standards that short-term programs must meet related to student outcomes — including earnings and job placement rates — to remain eligible for the new Workforce Pell program.
- The rule’s provisions governing Workforce Pell take effect July 20, and institutions have the option to implement them as early as July 1. The final rule hews largely to the agreed-upon regulatory language hashed out between the Education Department and stakeholders last year during a process known as negotiated rulemaking.
Dive Insight:
Short-term Pell has enjoyed bipartisan support for years, though lawmakers have debated what guardrails would be needed for such a program. The measure was enacted last year, along with a host of other higher education policy changes, in Republicans’ massive tax and spending bill dubbed the One Big Beautiful Bill Act.
U.S. Education Secretary Linda McMahon praised the program. “American students will soon be able to graduate with little to no debt and be well-prepared to start earning in one of today’s in-demand jobs in weeks, not years,” McMahon said in a statement Monday.
Under the final rule, governors are to collaborate with their state workforce boards to determine whether programs meet the criteria for Workforce Pell, according to an Education Department fact sheet. That includes whether they fulfill the needs of local employers and prepare students for high-paying, in-demand or high-skill jobs.
Programs must also either lead to a stackable postsecondary credential that multiple employers recognize or prepare students to enter occupations that only recognize one postsecondary credential. In the latter case, the programs must provide that credential.
Additionally, they must prepare students for either one certificate or a degree program by ensuring they will receive academic credit for their short-term programs.
Once the governor approves programs, the U.S. education secterary will evaluate whether they meet the rule’s completion and job placement rate standards.
The completion rate standard requires that at least 70% of students in a program finish it each year. In addition, the same share of graduates must be employed by the second quarter after they finish their programs.
The regulations also lay out earnings requirements, mandating that a program’s total tuition and fees not exceed its “value added earnings.”
Value added earnings is calculated by subtracting 150% of the federal poverty line for a single person — $22,590 in 2024 — from the median earnings of program graduates.
One of the changes the Education Department made in the final rule was excluding students who continue their education from this calculation. It made the change in response to public comments that argued that institutions shouldn’t be penalized if their graduates enroll in further postsecondary education after completing their short-term programs.
If programs miss those student outcomes targets, they will lose eligibility for Workforce Pell for at least two years, under the 431-page set of regulations.
The regulations also bar institutions from enlisting outside providers to deliver more than 25% of a short-term program. However, the final regulations expand this cap to 49% specifically for registered apprenticeship programs.
The Education Department expects the Workforce Pell program to cost the federal government $3.2 billion over the next decade. The Congressional Budget Office estimates the federal government will spend $41 billion on the Pell Grant program in the current fiscal year.
However, the Pell Grant program faces a massive funding gap in that time frame. Earlier this year, the CBO predicted the program would end the fiscal 2026 year with a $5.5 billion shortfall. By 2036, the cumulative deficit could grow to $104 billion, adjusted for inflation, according to one CBO estimate.
President Donald Trump’s proposed budget for fiscal 2027 proposes raising discretionary funding for Pell Grants to $33 billion, a $10.5 billion increase, while making massive cuts to college access programs and scientific research.