Sharing Work on Workforce Pell: How Scholars Can Submit Comments on Newly Proposed Regulations
To read the proposed regulations this post discusses or to submit comments to the U.S. Department of Education by April 8, 2026, click here.
Last summer, Congress passed the One Big Beautiful Bill Act (OBBBA) which makes several important new changes to the higher education system, including lower graduate loan limits and accountability for programs with low earnings. Among those changes: extending Pell Grant eligibility to short-term (8- to 15-week) programs. The policy change has long been a priority for community colleges and other institutions, and is designed to support workforce-aligned higher education programs, though others have raised concern that insufficient guardrails could lead to a proliferation of programs with low wages.
Last week, the U.S. Department of Education released proposed regulations detailing the design of the Workforce Pell program.[1] Higher education researchers can play an important role in determining the details of Workforce Pell, particularly because the Notice of Proposed Rulemaking (NPRM) includes a number of specific requests for feedback (“directed questions”) that suggest the Department is especially in need of – and open to considering – external feedback. In this post, we provide an overview of key provisions of the proposed rule, along with notes on some of the areas where researchers and scholars can provide especially useful comments.
Workforce Pell
OBBBA extended Pell Grant eligibility to students attending short-term (8- to 15-week, 150- to 600-clock-hour) programs for the first time. The statute outlines a two-step process for institutions seeking to have their programs approved: first, approval from the governor of the institution’s state after confirming the program meets certain criteria, and second, approval from the Secretary of the U.S. Department of Education. Governors will determine whether programs are approved on a few criteria:
Whether programs meet the state’s definitions of high-skill, high-wage, or in-demand occupations (as those terms apply to federal funds under the Perkins Career and Technical Education [CTE] and Workforce Innovation and Opportunity Act [WIOA] programs);
Whether programs meet the hiring requirements of employers in those occupations; and
Whether students will be able to earn credit for their programs upon subsequent enrollment in a related higher education program.
States will also need to use their administrative data to calculate completion and job placement rates, confirming that programs meet standards of at least 70 percent on both metrics.
Once approved by the state, the law says that the Secretary confirms the program has been in operation for at least a year, that the completion and job placement rates were certified by the governor as hitting at least 70 percent, and that the program meets a tuition-to-discretionary-earnings test (termed “value-added earnings” in the proposed rule). Under that measure, the tuition and fees of the program must not exceed the median earnings of the program minus 150 percent of the federal poverty level ($23,940 in 2026), adjusted for the school’s location using the Bureau of Economic Analysis’s regional price parity.
These guardrails will be important to ensure that students do not end up in programs that lead to very low earnings levels. But they are also important because the Pell Grant program itself is facing a funding shortfall of more than $100 billion over the next decade, starting this year – even after a $10.5 billion infusion also provided by the OBBBA. Funds spent on short-term programs could accelerate that shortfall, forcing Congress to make up the difference with more funds or even cuts to other, higher-value investments.
Even though negotiators reached unanimous agreement on the proposed regulatory language, the Department indicated a long list of areas in which it is explicitly seeking feedback from commenters; and some of the debates during negotiations suggest other areas of importance. These are some of the key areas for public comments on the new Workforce Pell initiative:
Consideration of Earnings During Initial Approval: The Education Department’s NPRM does not include any requirement that data on programs’ earnings be used in the eligibility determination process until at least until after three years have passed since the first set of Pell Grant recipients graduates. Since the law requires that programs pass this tuition-to-discretionary-earnings test in order to be eligible for Workforce Pell, some negotiators sought a way to enforce the test upon programs’ initial approval for Pell funds. In response, the Department agreed to seek comment on the approach as a condition of reaching agreement on the proposal. One idea the Department asked about is whether to require the production of an “interim” earnings measure, at least for transparency purposes, and whether to require programs to meet that interim test before receiving Pell funds.
That interim measure would presumably need to come from state data if it were calculated prior to granting Pell Grant eligibility, since the Department of Education is not permitted to hold data on students until they begin receiving federal financial aid dollars. Researchers familiar with state or other income data could comment on how states can calculate median earnings earlier in the process and incorporate those earnings into their state approval and renewal processes; and how the Department should collect such information from the states to inform its own approval processes and to provide transparency to students. Proposed 34 CFR § 690.95(a)
Technical Details of Measuring Program Earnings: Another area that sparked plenty of discussion among negotiators was in the particulars of measuring the earnings of Workforce Pell programs.
When to Measure Earnings: The OBBBA states that for Workforce Pell programs, the Secretary will measure the “earnings of students who received Federal financial aid under [Title IV of the Higher Education Act] and who completed the program 3 years prior to the award year.” (See Sec. 83002(b)(2)(iv)((IV) of OBBBA.) While we and others interpreted that as suggesting a measure of earnings three years after graduation, the Department’s proposed rule instead specifies that those earnings will be measured in the first full tax year after completion, but for a cohort from three full years prior to the year in which the Department is calculating the measure – so, for instance, in 2031, the Department will look back to the 2028 tax-year earnings of those who graduated from the program in the 2027 award year. Elsewhere in OBBBA, an earnings-based accountability standard is similarly described as measuring the earnings of students who “completed such program during the academic year that is 4 years before the year of the determination” (see Sec. 84001(c)(2) of OBBBA), yet the Department’s proposal would operationalize that as a four-year earnings measurement period, not a one-year measurement. Researchers familiar with measuring earnings outcomes for short-term programs could provide comments on the best ways to balance timeliness of accountability with appropriate expectations for assessing the returns to a short-term program. Proposed 34 CFR § 690.91
Which Graduates to Exclude from the Measure: Under OBBBA and in the proposed rules, earnings will be measured only for graduates who are working (excluding those who are unemployed or otherwise not working). But the Department proposes to operationalize this as including even those who are enrolled in an institution of higher education during the year earnings are measured, as long as they are also working. Several negotiators had pushed the Department to exclude those enrolled students, as it does in the 2023 gainful employment rules; and in the proposed rule, the Department notes that it is seeking feedback around whether enrolled students should be excluded from the measure. Other categories of students that might also be excluded could include, for example, those who are totally and permanently disabled, deceased, or in prison education programs or comprehensive transition and postsecondary programs. Researchers who have worked with earnings data will have useful insights for the Department. Proposed 34 CFR 690.95(a)
Applying a Regional Price Parity Adjustment to Earnings: As outlined in the OBBBA, the Department will adjust the earnings of a program using the Bureau of Economic Analysis regional price parities for the program’s metropolitan area, if available (or for its state, if metropolitan area is not available). However, the Department proposed not to apply an adjustment if more than half of the students enrolled in the program are not located in the state where the program is offered during the earnings year (like some programs that are offered online), instead using the unadjusted, national median earnings of the program. The Department is looking for comments on this approach – and especially on how it should identify the student’s location. Under the proposed rule, the student’s location would be based on the student’s FAFSA at the time they enroll in the program; some negotiators suggested instead using the student’s address during the year when earnings are measured. Proposed 34 CFR § 690.95(b)(1) and § 690.95(k)
Aggregating Cohorts in Small Programs to Protect Privacy and Enable the Calculation of Earnings: An anticipated challenge for many Workforce Pell programs is that small cohort sizes make it impossible to produce earnings data while protecting students’ privacy – and thus impossible to enforce the tuition-to-discretionary-earnings measure. The Department proposes to accommodate by requiring a minimum n-size of at least 50 graduates (higher than needed, because some graduates may not be working and won’t make the final cut for inclusion); then adding students from one year prior, then two, stopping when the cumulative cohort hits 50 graduates. If it doesn’t, the Department adds a third prior year’s worth of graduates (for a total of four years); if it reaches at least 30 graduates, the Department attempts to calculate the earnings, and if not, the Department doesn’t make the attempt. This approach doesn’t match the version the Department separately developed for an earnings-based accountability measure, creating additional complexity in calculating the two. In addition, the accumulating cohorts may create added challenges in communicating with schools and students, because different programs will be judged on different years. Proposed 34 CFR § 690.95(h)(1)-(5)Offering Online Programs Across State Lines: Under Workforce Pell, colleges may offer online eligible programs – but the Department proposed requiring bilateral agreements be in place for any state from which the school is enrolling students about the occupations in which programs can be offered. (In-person programs would not have the same requirement.) The reasons for requiring agreements are two-fold: first, to ensure the workforce development program approved by the state where the college is located is relevant for the students enrolling from other states, too; and second, to ensure data-sharing agreements are in place to facilitate the calculation of completion rates and job placement rates. Those are both important rationales – but it begs the question of why similar data-sharing agreements would not be needed even for in-person training programs if a significant share of students in the program are from out-of-state. Researchers experienced in using state administrative data may have feedback about how important those data-sharing agreements might be (e.g., in light of data on how many students might find employment out-of-state), and how best to facilitate the production of completion, employment, and/or earnings data when student enrollment is split across state lines. Proposed 34 CFR § 690.93(h)(1)-(3)
Restarting an Adjacent Program After Losing Eligibility: If a program fails and either loses eligibility or is voluntarily discontinued, the proposed regulations would allow institutions to launch new programs in the same field of study (i.e., in the same four-digit Classification of Instructional Programs [CIP] code) as the failing program, as long as it leads to a different occupation – measured by the Standard Occupational Classification (SOC) code. That sets up a gaping loophole; an official CIP-code-to-SOC-code crosswalk reveals plenty of cases where programs would need only tweaking to be able to restart. Truck and bus driving programs, for instance, can lead to jobs as heavy/tractor-trailer truck drivers, light truck drivers, school bus drivers, transit and intercity bus drivers, and shuttle drivers. It’s also different from a similar policy the Department is pursuing in the accountability regulations, which would prohibit colleges from restarting programs within the same four-digit CIP code if it shares any of the same SOC codes as the failing six-digit CIP code program. The Department would benefit from comments from researchers familiar with using this crosswalk, those who have studied institutional improvement strategies and can weigh in as to whether a renaming of the SOC code is likely to indicate a lower likelihood of failing, and scholars who can propose alternative language (or offer research to support a reversion to the Department’s original proposal). Proposed 34 CFR § 690.97(a)
How to Submit a Comment
The Department of Education is required to consider all substantive comments it receives during this public comment process, but comments from researchers and scholars are especially important because of the agency’s obligation to consider evidence and engage in reasoned decision-making. We encourage scholars who are interested in submitting comments to develop clear, well-explained, research-backed proposals. For more on submitting a comment, check out our tips for writing effective public comments, shared in a recent virtual event. Commenters can submit their feedback to the Department here by April 8. Reach out to the PEER Center for advice and questions at peercenter@american.edu.
[1] The proposed rule includes one other provision, preventing students from receiving Pell Grants if their full costs of attendance are otherwise covered by non-federal grant/scholarship aid. We don’t discuss that provision in detail, but interested readers can find it at 34 CFR § 690.5(a) and (b) in the proposed rules.
