House Introduces Workforce Pell Bill

This week, the House introduced, the Bipartisan Workforce Pell Act (H.R. 6585), which would allow students to use their Pell Grant eligibility for short-term training programs between eight and fifteen weeks. The bill would pay for the program by removing access to federal Direct Loans from schools that are subject to the endowment tax.

The act, sponsored by Chairwoman Virginia Foxx (R-NC), Ranking Member Bobby Scott (D-VA), Rep. Elise Stefanik (R-NY), and Rep. Mark DeSaulnier (D-CA), provides students who are interested in short-term training programs the ability to use their Pell Grant eligibility to fund their enrollment.

The most concerning portion of the bill is its proposed offset. To pay for the costs associated with this program, this bill proposes the following:

• If an institution is subject to the endowment tax, it:
  • Is prohibited from awarding a Direct Stafford Loan, Direct Unsubsidized Stafford Loan, or a Direct Plus Loan to any eligible student;
  • Is prohibited from awarding a Direct Plus Loan to the parent of an undergraduate with Pell Grant eligibility;
  • Must qualify for participation in the Federal Supplemental Education Opportunity Grant (SEOG) program by guaranteeing emergency grants in the amount of the maximum SEOG award (~$4,000) to Pell Grant students; and
  • Must maintain or increase Pell Grant enrollment compared to the year this bill is enacted.

A student’s eligibility for Workforce Pell Grants (WPG) is the same as for the original Pell Grant, and usage of a WPG will count against the student’s lifetime Pell Grant eligibility.

Program eligibility is determined through a lengthy set of criteria, which begins with a short list of qualifying criteria:

• Program length must be between 8 weeks and 15 weeks, or 150 and 599 clock hours;
• All types of institutions may participate, including for-profits; and
• All modes of instruction are allowed, except correspondence courses.

Once a program meets the above requirements, there are quality assurance provisions that establish guardrails to protect students and taxpayers. These provisions include required actions from the state, accreditors, and the Department of Education. Notably, programs must:

• Have completion rates of 70% within 150% of normal time to completion;
• Have verified job placement rates of at least 70%, measured 180 days after completion;
• Charge tuition and fees that do not exceed a new value-added earnings metric, measured one year after completion; and
• For at least two of the three most recent award years, the median earnings of a WPG recipient must not be less than the median earnings of a high school graduate in the state in which the program is located.

These requirements, including the complete elimination of access to federal student loans, go into effect on July 1, 2024.

For more information, please contact:
Justin Monk