ED Reaches Consensus on Workforce Pell Framework 

The Department of Education, via the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee, reached consensus on a regulatory framework for implementing the new Pell Grant cost of attendance (COA) exclusion.  This exclusion would disqualify students from receiving Pell Grants if they receive non-federal grant aid that meets or exceeds their COA, and Workforce Pell (WFP), a statutory expansion of the Pell Grant program to certain short-term workforce programs. The negotiations addressed seven topic areas, all but one of which materially shape how WFP will operate beginning July 1, 2026.  

Brief summaries of the week-long negotiations of each topic are below.  

Pell COA Exclusion. The committee discussed a new requirement that students who receive non-federal grant or scholarship aid in an amount that meets or exceeds their COA are no longer eligible to receive Pell Grants. The consensus regulations clarify that this exclusion applies on an award-year basis, not by payment period, and that certain forms of assistance already excluded under the Higher Education Act, such as social security benefits and qualifying emergency aid, do not count toward the calculation. 

Once institutions become aware that a student has met the disqualification threshold, they are permitted to reduce non-federal aid prior to the final Pell disbursement in order to preserve eligibility.  However, if Pell is disbursed and no adjustment is made, the entire Pell award for the year must be returned and future disbursements cancelled. The Department will issue sub-regulatory guidance with example scenarios in the coming months. 

Ultimately, Pell remains the first-dollar program it has always been, and the aid-packaging process is not changing in a significant way. While institutions will need to establish a process to determine whether students cross this threshold, the requirements set forth by the Department provide a reasonable amount of flexibility before removing Pell from a student.  

Technical and Confirming Changes (the basic structure of WFP). This topic focused on how WFP will conform to existing financial aid regulations. Negotiations clarified that WFP is not a new program and is simply a Pell Grant with different eligibility requirements for short-term programs. This means that WFP grants are funded from the same pool of money as Pell Grants and subject to standard Pell rules, including proration based on program length. The Department provided examples of how WFP funds are calculated under various length and clock hour scenarios. 

Other clarifications of note: 

WFP Definitions. This topic focused on defining certain terms to ensure they aligned with existing regulatory or statutory definitions and minimized disruption and duplicative requirements. It also established baseline eligibility criteria for WFP programs. 

Requirements for a program to become WFP-eligible are: 

WFP programs must not be correspondence, non-credit, direct assessment, remedial, English language instruction, or study abroad courses. 

This section further defined important terms, such as the cohort and earnings measurement periods that will be included in the accountability metrics, and what constitutes an in-demand industry sector, occupation, or recognized postsecondary credential. Most of these terms were defined in line with how the federal Workforce Innovation and Opportunity Act (WIOA) defines them, or hewed as closely as possible to minimize disruption. 

Governor Approval for Eligible WFP Programs. The Governor, in consultation with the State board, must ensure all WFP-eligible programs meet specific criteria. The programs must: 

Governors must establish written processes to determine whether programs meet these requirements, publish the list of eligible sectors and occupations, and review that list at least every two years. 

States must also calculate two accountability metrics for WFP programs: a completion rate of at least 70%, and a job placement rate of at least 70%, measured 180 days after completion. However, because many states do not have the infrastructure in place to make these determinations, there will be a transition period for the first three award years of WFP implementation, so Governors will calculate these rates under slightly different terms. 

The only students who will be excluded from these calculations are those who die, are incarcerated, have a medical condition preventing employment, or are called into uniformed service for at least 30 days. Students who complete a WFP program and go on to further education are not excluded from the job placement rate calculation, which was a decision the Department made to ensure WFP is primarily geared toward workforce development.  

States that would like to authorize distance education programs under WFP may enter into a bilateral agreement with another state to automatically authorize programs within certain sectors or occupations. However, states may not enter into multilateral agreements. This means that online WFP programs must receive approval from every state in which they enroll students to disburse WFP Grants to those students. 

Topic 5. Secretary of Education Approval of Eligible WFP Programs. Following the Governor’s approval, the Secretary must determine that the programs have: 

The Secretary must use federal earnings data to inform the VAE calculation and review states’ documentation that they are adhering to WFP requirements. 

Value-Added Earnings Calculation. The VAE calculation is conducted by the Secretary and programs that fail the calculation – meaning that their published tuition and fees exceed the VAE outcome – are ruled ineligible for WFP. 

The VAE calculation compares a program’s tuition and fees to the earnings of federally-aided students who are working that completed the program 3 years prior to the award year and determined the difference between those students’ median earnings and 150% of the federal poverty line for a single individual. However, the calculation itself uses mismatched cohort periods for earnings and students to make comparisons. 

The earnings measurement period used in the calculation is the first tax year following the end of the award year during which the students graduated. The cohort period for students is the award year that ended three award years prior to the beginning of the award year for which VAE is being measured. To illustrate: 

The students who completed in 2026 would have their earnings measured in the 2027 tax year. The VAE calculation and comparison to tuition and fees would be done in 2029. This, at a minimum, makes the VAE calculation more difficult to pass, and allows programs to potentially receive WFP funds despite failing the VAE requirement during the time between the two cohort periods. 

The Secretary will publish the VAE limits for a program no later than three months prior to the beginning of an award year. Institutions must keep their published tuition and fees below this published level for students who enroll in the program that award year. 

Losing and Regaining Eligibility. There are multiple ways for a program to regain eligibility.