The so-called One Big Beautiful Bill Act that passed last summer included a provision that expands Pell Grant eligibility to students enrolled in short-term, career-focused training programs that meet defined quality requirements and lead to industry-recognized credentials. Spotlight spoke recently with Wesley Whistle, the Project Director for Student Success and Affordability in the Higher Education program at New America and who tracks the issue in his Substack, Workforce Pell Watch. The transcript of our conversation has been lightly edited for length and clarity.
So, why don’t we start at the beginning: In a nutshell, what are the changes that Workforce Pell brings?
Workforce Pell is extending Pell Grant eligibility to what I would describe as very short job training programs. There are many programs that exist that are eligible for Pell grant aid that are non-degree and short-term programs. This change is bigger because it's expanding to even shorter programs.
I’d also note that there have already been programs that are between 10 and 15 weeks and provide at least 300 hours of training and less than 600 that have been eligible for loans for many decades. What I call the short-term loan program has existed for decades and is kind of a relic of how the for-profit industry got access to federal student aid. They were not eligible for Pell grants, but they were eligible for student loans through this separate program. And at the time, the for-profit college industry and the programs they provided was very much these kinds of short-term, non-degree job training programs. Once they got access to Pell, they dramatically expanded.
So actually, this has been a debate for many decades. There is a Congressional Research Service report from the day after I was born in 1990 that asks that exact question: Should federal students go to short-term programs? A lot of our regulatory and statutory requirements that limited programs to 600 hours in 15 weeks came from the ‘70s and ‘80s and resulted in a lot of really bad outcomes—fraud and super high student default rates.
There was research done in 2021 or 2022 that actually looked at the programs that were getting those federal student loans, for between 10 and 15 weeks, and the problem they saw was the median program wages were $12 an hour. That’s still $25,000 a year but not necessarily a family sustaining wage.
That’s a bit of background, but the biggest expansion here is not just in terms of shorter-term programs in terms of hours and weeks but that this offers Pell grant aid to non-credit programs, which is a huge shift in how federal student aid has functioned.
And when does this go into effect?
Officially, July 1 of this year; the comments for the new regulation ended earlier this month. The Education Department, if my conversations are accurate, are going to crank out a final rule very quickly. In the normal process, if a rule is finalized before Nov. 15, it goes into effect the following July 1. What they are trying to do here Is use what is called the master calendar requirements so that schools potentially can implement this early. There is a separate process that requires states to set up a process that also will impact whether this can be used this year. So, I think this first year is definitely going to be a staggered kind of implementation across states as to when those funds can actually go out.
That’s very helpful. Then, talk about the concerns you have about how this will need to be implemented.
Generally speaking, there's high level concerns, right? The evidence and the history in this space point to a lot of those. One is, just generally speaking, the more training you get, the better your outcomes on average are going to be. So, the shorter the training, we know on average that your earnings are going to be worse, and we've seen that in all kinds of ways for decades. There are also concerns around schools doing what is called course stretching where they're just extending short-term programs long enough to become eligible for aid without necessarily any value add in terms of what training and skills that a student gains. That’s also a problem that has existed for years.
The proposed regulation has actually done a lot to address some of these concerns. But there's concerns about whether non-credit programs articulate into credit programs and does that derail a student? Does that actually help a student earn a degree? You know, when Senator Pell created the Pell Grant program, his intention was to help low- and middle-income students be able to earn a college degree. That’s a real concern here too.
Generally speaking, this is not supposed to lead to a dead-end job. It's supposed to end in a high-wage occupation and there is a ladder, even without further post-secondary education, to a job that can be financially and economically secure and support a family. I think generally there are lots of concerns about how that actually will play out. Congress put in the value-added earnings requirement, which is a good step, but it is still a very low bar. It basically requires wages that approach that $25,000, though of course it depends on the exact program and the state because the calculation includes adjusting for regional price parities. There is still the major question of how are we helping these students get to that job that pays well.
Congress and the department also have approached this in a very unique way where governors are approving individual programs—and that's not how federal higher ed policy has ever functioned before. That’s a concern that I have and we’re providing technical assistance to states as they're implementing this. I think we've worked with about 30 states in some form or another and the level of our engagement varies. Some states are doing the bare minimum to meet federal requirements; others are doing much more. But I think it's important for states to think about this strategically, both in terms of general economic and workforce development goals. Many states, including Kentucky for example, have specific funding for these kinds of workforce training programs. So, how does this all align and how is this funding being leveraged to meet common goals?
Another concern that should be on people's radar is, number one, the Pell grant amount is small, because it’s prorated based on length and student financial aid. When I've talked to a lot of folks in states across the country, there's been a big misunderstanding about that. They think that students are eligible for the maximum Pell Grant award, which is not the case, because that's not how Pell operates. And so, for many students, there'll be a gap between what their Pell Grant covers and what the total cost of attendance is. And they're not eligible for federal student loans. And the private student loan market is out there, obviously, and they have worse terms on average. That's just a general concern because when we look at the outcomes, generally speaking, the wages, aren't that high and so even a small debt amount, particularly one with less favorable terms, can create serious challenges for repayment for borrowers.
I want to be sure that I understand—for a program to be deemed eligible, that's a state decision?
There are minimum requirements set under federal law that the program has to be between eight and less than 15 weeks, and basically 150 to 599 hours of training. The states have to determine some other things like the definitions of high skill, high wage and in demand and the states are going to certify that it meets their specific requirements the state creates. And then that school has to then submit that certification to the Department of Education saying they meet those requirements. And then the department at that point, will approve or reject. The department also is in charge of the value- added earnings calculation for accountability. But yes, this puts a lot on the states to set these definitions and other requirements that they may have.
And to gather data on graduates going forward,. which I guess some states do, some states don't, but now everyone will have to.
Correct.
Is there anything else that I should have asked or you’d like to add?
Just that it’s a very complicated program. I've talked to lots of folks who are very in the weeds and they're still missing a lot of things. There's a lot of important details of this that folks just need to understand, because it is complicated. I would push back on people, however, who say it's unnecessarily complicated because the history on this issue shows you need a lot of protection. Accountability is so important, as is the need for states to be strategic and not just approve all these programs. Short-term job training can work, but it’s also very challenging. How can we give people enough skills in 8 weeks to be able to go out and land a job that pays them a middle-class lifestyle wage?