What Online and Professional Continuing Higher Education Leaders Should Know

In early December, the Department of Education kicked off negotiated rulemaking with the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) committee, focusing most of its efforts in the first week on new Workforce Pell regulations and loss of Pell eligibility as created by the One Big Beautiful Bill Act (OBBBA). [For those of you who are new to negotiated rulemaking, and are wondering what it is and how it works, check out our UPCEA Policy Matters: Primers and Insights article – An Introduction to Negotiated Rulemaking for Higher Education.]

The AHEAD committee’s focus has been separated into three buckets:

1. Loss of Pell eligibility when a student’s non-federal grant/scholarship aid equals or exceeds cost of attendance (COA)[1]
2. Workforce Pell for short-term programs
3. Accountability changes (“Do No Harm”, Financial Value Transparency, Gainful Employment) to be addressed in the January (more details, including how to register to watch those sessions are available here).

The Department set an unusual protocol for this committee: a separate consensus vote at the end of each week, rather than what had been done in past negotiated rulemaking sessions, which included either topic-based consensus votes, or an overall vote on all language during rulemaking. The committee did reach consensus at the end of the first week on the Pell-related topics (items 1 and 2 above) with all but one negotiator (state higher education officers’ representative) providing a thumbs up on the draft language. That matters because, under the Department’s stated approach, consensus language becomes the basis for the Department’s proposed rule.

The December session was the first of two within this rulemaking, however the Department chose to bifurcate the Loss of Pell due to non-federal aid, and Workforce Pell work during the December session, while reserving the January session for work on accountability frameworks like “Do No Harm,” Gainful Employment (GE), and Financial Value Transparency (FVT).

Additionally, while the Department has agreed to the consensus draft regulations, they also discussed changing some items discussed during the final day that may not yet be reflected in the the last draft available to negotiators. And while this draft language is likely to be very close to what the Department releases for public comment in the coming months, there are still opportunities for this language to change before becoming the final regulatory text. The Department can still revise provisions in the final rule based on public comments, even where negotiators reached consensus.

While we have provided an overview of certain topics within the consensus reached on Workforce Pell changes below, please attend our webinar on January 28^th at 2-3PM ET “Decoding Workforce Pell and the New Program Accountability Framework: Negotiated Rulemaking Insights and Implementation Guidance” for more information on Workforce Pell, and also the details which will be focused on accountability metrics during the January rulemaking.

What are Statutory Requirements of Workforce Pell Programs?

To start, it is helpful to frame what the broad statutory requirements for Workforce Pell programs are based on the requirements enacted in OBBBA. The law restricted the Department and negotiators in what they could tweak within the regulations as part of the negotiations[2]. To be eligible for Workforce Pell, a program:

• Must be offered by eligible institutions of higher education.
• Must be at least 150, but less than 600 clock hours of instruction, with a minimum of 8 weeks, and less than 15 weeks of instruction.
• Must be aligned with high-skill, high-wage, or in-demand industry or occupation, which are defined by a state’s governor.
• Must meet programmatic eligibility for the 12 months immediately preceding the certification for inclusion in Workforce Pell
• Must meet a 70% job placement rate (as measured in the draft regs by employment in the second quarter after completion, with additional occupation‑matching requirements after the initial transition period).
• Must meet a 70% completion rate, within 150% of the normal time for completion.
• Must satisfy a value‑added earnings cap: published tuition and fees may not exceed value‑added earnings (median earnings adjusted by Bureau of Economic Analysis[3] regional price parity minus 150% of the poverty line)
• Must provide a recognized postsecondary credential that is stackable and portable across more than one employer, or prepares students for employment in an occupation for which there is only one recognized postsecondary credential.
• May be a distance education program, however correspondence courses are not eligible.
• May not be offered to a student who is enrolled, accepted for enrollment, or has attained a graduate credential.
• May not be offered concurrently with Pell for any other educational program (including another Workforce Pell program).

What Types of Programs are Workforce Pell Programs?

The Department shared a document outlining what they see to be the most likely programs that will fit into the Workforce Pell framework. Their examples included:

• Health-Related Programs (Nursing Assistants/Aides; Phlebotomy Technicians; EMT Paramedics);
• Commercial Driver’s License & Vehicle Operation Programs;
• Career & Technical-Related Programs (Welding Technology/Welders; Automotive Mechanics; Fire Prevention/Fire Safety; Computer & Information Sciences);
• Child Care-Related Programs (Child Care Providers; Early Childhood Education Teachers).

The Department noted it was difficult for them to ascertain the data to figure out which programs could receive Workforce Pell Grants. This is because these programs are generally not captured as part of ED datasets because almost none receive Title IV federal financial aid. Among the reasons the Department noted in the document for what their limitations were included:

• Federal data may overcount certain programs because it includes programs that are between 1-7 weeks in length.
• Federal data may undercount certain programs because it does not include programs between 12-15 weeks in length and does not include non-credit programs.
• Federal data also may overcount certain programs because we are unable to layer on the other WFP eligibility requirements.

So, they turned to two states to provide more data to inform the negotiators and themselves about what programs may qualify, with California and Virginia being the examples shown. However, even those datasets proved difficult to get a full picture as they did not contain information on for-profit institutions. And, because these two states offer robust data, and not all states do, it was difficult for the Department to extrapolate this because needs will vary across states based on the labor markets of that region.

The Department was also asked about the existing pathway programs which are similar and eligible for federal student loans, and they stated that out of the thousands of American institutions, that only 79 programs currently take part.

Based on their analysis, the Department assesses that overall, there could be as little as several hundred programs to up to a few thousand programs which could currently qualify for Workforce Pell and more may be added as Federal funding opens up.

How Much Will a Student Be Receiving Based on Workforce Pell?

The Department also provided an analysis during the rulemaking about the amount of money that a student could get for these programs, which is prorated off the overall Pell Grant maximum (currently $7,395 for 2025-2026). The Department analyzed the maximum and minimum amounts that a Workforce Pell Grant would be. On the upper bound, the most a Workforce Pell recipient would receive would be approximately $3,980; and on the lowest end, the minimum is approximately $123[4]. The Pell maximum award amount is a congressional appropriation, and in recent years, it has ticked up a small amount each year. However, it is important for institutions to note, there have been recent proposals, including from the Trump Administration FY 2026 presidential budget to lower the current Pell maximum amount from $7,395 to $4,650

A Congressional Budget Office (CBO) estimate projected that by 2034, there would be approximately 100,000 Workforce Pell recipients receiving an average of about $2,200 each.[6]

What Did Negotiators Discuss?

While we won’t do a full review of all the topics that negotiators discussed, we want to highlight those that may be most relevant to the UPCEA community and members.

• There were many discussions about how financial aid will be distributed.
  • In the first day, negotiators discussed the new statutory OBBBA requirement for all Pell Grant programs to lose Pell eligibility for a student when non-federal grant/scholarship aid equal or greater than COA(cost of attendance).
• The Value-Added Earnings requirement was a topic of much discussion. This requirement is such that programs will not be able exceed the amount of the total tuition and fees when calculating the difference between what the Secretary/Department of Education has determined are the median earnings of students and the state and metro area price parities and 150% of the poverty line. If the institution is found to be offering a program that fails this metric, they will need to lower the tuition and fees of that program.
• Governors (often in coordination with state workforce entities) are critical to the approval of these programs. The negotiated language requires Governors to:
  • Determine that the program:
    • Provides an education aligned with the requirements of high-skill, high-wage (as identified by the State pursuant to section 122 of the Carl D. Perkins Career and Technical Education Act (20 U.S.C. 2342)), or in-demand industry sectors or occupations;
    • Meets the hiring requirements of potential employers in the sectors or occupations;
    • Either leads to a recognized postsecondary credential that is stackable and portable across more than one employer; or prepares such students for employment in an occupation for which there is only one recognized postsecondary credential and provides such students with such a credential upon completion of the program
    • Prepares students to pursue one or more certificate or degree programs at one or more eligible institutions (which may include the eligible institution providing the program), including by ensuring:
      • Upon completion of the program and enrollment in such a related certificate or degree program, will receive academic credit for the program that will count toward the related credential.
  • Create a written, publicly available policy for the criteria the Governor will use to determine if a program meets each of the requirements including:
    • The State’s methodology to determine and periodically review which occupations and industry sectors are high-skill, high-wage, or in-demand
    • Whether the expected competencies for which the recognized postsecondary credential intends, align with the competencies needed in such high-skill, high-wage, or in-demand sectors and occupations
    • Incorporates direct input from employers, which may be secured from the state board and local workforce development boards, industry or sector partnerships, sponsors of Registered Apprenticeship programs, joint labor-management partnerships, or through other methodologies established by the State
    • If a credential is stackable and portable, including documented connections to additional credentials, and considers, if available, data showing whether students have obtained additional credentials through career pathways, real-time labor market information, and includes a process for employer validation
    • For institutions to establish that an eligible workforce program will ensure the award of academic credit towards a certificate or degree program upon a student’s successful completion of the eligible workforce program and enrollment in such certificate or degree program, and that such credit will be accepted at one or more eligible institutions through written agreements, including established articulation agreements, transfer-of-credit agreements, consortium or partnership agreements, or similar arrangements

Distance Education and Workforce Pell – What Happens with Online Education and Out-of-State Students? Does SARA Apply?

For distance education, for those students located within the state in which the institutions are located and the governor has offered approval for the program, they may partake in the Workforce Pell program like any other on-campus student. For those students who are out of state, the draft language notes that the governors of the state in which the institution is located, and the state in which the student is located are allowed to enter into a bilateral agreement in which they both recognize the program meets the state-based requirements of Workforce Pell. Separately, institutions will still need to meet the separate regulatory professional licensure requirements (if they are a licensure program) [7], and also meet all of the necessary approval processes with Workforce Pell.

While institutions may be taking part in SARA, and that may provide that their institutions may be authorized to administer programs in another state, that does not mean that they are automatically eligible for Workforce Pell if the two states governors have not collaborated to provide approval specifically on the programs which could be Workforce Pell eligible.

This concept, according to the Department’s example, is to allow for distance education programs from an out-of-state (State A) institution, such that another state (State B) could receive programs for students residing in State B may not have the capacity to provide those programs, but have a high need for them. It will also help in states which metropolitan areas where there is significant overlap between one or more states and students can easily work and live in multiple states.

One of the other regulatory draft changes included that if more than 50 percent of students included in the value-added earnings calculation are not located in the State in which the institution offering the program is located, the Department will not adjust the program’s median earnings by the State and metropolitan area regional price parities of the Bureau of Economic Analysis.

The Department did clarify, that institutions still may provide workforce programs to students in other states, meaning out‑of‑state students can still enroll in the online program, but cannot receive Pell for that Workforce Pell program absent the bilateral governor agreement mechanism.

Other Interesting Notes and Take-Aways

• Written arrangements with an ineligible entity will be allowed up to 25% or less of an eligible Workforce Pell program.
• For credit‑hour eligible workforce programs, institutions may not count noncredit or reduced‑credit remedial coursework (including ESL) toward enrollment status/COA. However, noncredit programs may be eligible within a clock hour format.
• Direct assessment programs are not eligible.
• Study abroad programs are not eligible.
• An eligible student enrolled in an eligible workforce program is only eligible for Federal financial assistance under the Federal Pell Grant program and no other title IV, HEA program.
• Programmatic approval from the Governor can last as long as the Program Participation Agreement with the Department of Education.
• Pathway vs. Workforce Program, isn’t it both? According to the Department, while there is a statutory requirement for stackability, that does not align nicely with the overarching goal of getting completers into jobs. The Department stated the overarching congressional intent for these programs was workforce development. And as such, the job placement rate would be negatively affected by a student who continues in education, but does not get employment. This would generally discourage institutions from trying to make these programs pathway programs to make sure they retain their 70% job placement rates.
• The Department frequently noted that there are still many specifics to work out in terms of where earnings data will be pulled from, how data systems will be put into place, and the overall short timeline to get to the July 1, 2026 implementation date.
• The Department worked to conform Workforce Pell definitions and processes as best as possible with those that had been established within the existing WIOA and Perkins frameworks.
  • Alignment included a continuous review process for Governors in which they will need to assess high-skill, high-wage, or in-demand occupations and the competencies needed for such at least every two years, in conjunction with requirements set in WIOA.
• Loss of Eligibility Details
  • Two‑year lockout: If the Department determines a program fails the completion and/or job placement requirements (or it’s voluntarily discontinued while failing), the institution can’t re‑establish it, or a “substantially similar” program with the same 4‑digit CIP and identical SOC codes, for two years.
  • Regaining eligibility after a governor‑approval loss: A program can come back only after the Department receives a new governor certification and the Secretary determines the program again meets the eligibility criteria.
  • Value‑added earnings reinstatement is a process (not automatic): If a program loses eligibility because tuition/fees exceed value‑added earnings, reinstatement requires (1) new governor certification, (2) documentation + attestation that tuition/fees were reduced and will remain less than or equal to recalculated VAE, and (3) an ED recalculation request.

What Else? And What Should Institutions Be Doing Next for Workforce Pell Implementation?

While this post is not exhaustive (but perhaps it is for you reading it?), we encourage institutions to review the regulatory draft text with your institutional teams, since there are many details around the ins and outs of the program and how it will be administered. UPCEA will also be offering more details and review in a January 28^th webinar from 2-3PM ET “Decoding Workforce Pell and the New Program Accountability Framework: Negotiated Rulemaking Insights and Implementation Guidance” covering the AHEAD committee work from both the December Workforce Pell session and January session focusing on accountability – so register today to attend. UPCEA has also developed a “Workforce Pell Readiness Checklist – For Four-Year Colleges & Universities” to help guide your efforts.

 

[1] https://studentaid.gov/help-center/answers/article/what-does-cost-of-attendance-mean

[2] https://www.congress.gov/bill/119th-congress/house-bill/1/text

[3] https://apps.bea.gov/itable/

[4] https://www.ed.gov/media/document/2025-ahead-calculation-of-federal-pell-grant-eligible-workforce-program-112683.pdf

[5] https://www.whitehouse.gov/wp-content/uploads/2025/05/appendix_fy2026.pdf

[6] https://www.cbo.gov/publication/61412

[7] https://www.ed.gov/laws-and-policy/higher-education-laws-and-policy/certification-procedures-questions-and-answers#ldr

 

Jordan DiMaggio is the Vice President of Policy and Digital Strategy for UPCEA. He comes from a background in non-profit organizations and public service with a career spanning federal policy, data infrastructure, web design, and collaborative communications. His focus is in higher education and federal policy reform, as well as technology-focused organizational structure and strategy. Currently UPCEA’s federal advocacy and governmental relations liaison, working on advancing policies that support online and nontraditional students as well as the universities which serve them. Before joining UPCEA, Jordan worked on Capitol Hill for former U.S. Senator Jeff Bingaman (NM) as Systems Administrator and Legislative Aide. Prior to that, he served in the Second Judicial District Court of New Mexico in their criminal, civil, and domestic relations divisions.