Final Workforce Pell Rule Release
The Department of Education released its final rule for the new Workforce Pell program. As expected, the Department did not change much from its notice of proposed rulemaking (NPRM), but it did change a few provisions in notable ways (see table below). A full summary of the changes from the proposed rule to the final rule is available in Table 2.1 of the final rule.
NAICU’s primary concern from the NPRM, which was that the job placement rate metric would inappropriately penalize Workforce Pell programs whose graduates go on to continue their education, was not addressed.
For the first two years of Workforce Pell, the job placement rate metric requires that at least 70% of a program’s graduates be working as of 180 days following completion of the program. This puts institutions in the position of having to discourage students from continuing their education to avoid the immediate loss of eligibility for the Workforce Pell program.
Compounding this issue, beginning with the 2029–30 award year, graduates will count toward the job placement rate only if they are employed in the specific career field for which the Workforce Pell program is intended to prepare them. NAICU believes that this metric, as designed, will cause even quality programs to fail periodically, and there is little that institutions can do to prevent it from happening.
Below are several other changes that were made from the NPRM to the final rule that are significant for private, nonprofit higher education.
Notable changes
| Provision | NPRM | Final Rule | Explanation |
|
Written arrangements to provide educational programs § 668.5 |
Up to 25% |
Up to 49% for related instruction components of Registered Apprenticeship programs. 25% for all other agreements. |
This cap limits how much of a program can be provided by entities other than the institution. The final rule allowed a specific type of non-institutional instruction to exceed the general 25% cap, but otherwise maintained the same threshold as before. |
|
Limitations on remedial coursework that is eligible for Title IV, HEA program assistance § 668.20 |
Prohibits noncredit, remedial, and English as a second language coursework from credit hour programs. | Extends this prohibition to clock hour programs, as well. |
This prohibits the listed course types from counting in the calculation of Title IV awards. The final rule placed this prohibition on clock hour programs, which were originally exempt. |
|
Value-added earnings § 690.95 |
Prohibits a workforce program's total published tuition and fees from exceeding the value-added earnings (VAE) for all students. Defines VAE as the difference between the adjusted median earnings of student completers (who are working) during the earnings measurement period and 150 percent of the Federal Poverty Line applicable to a single individual for such tax year. |
The final rule will now: (2) Simplify the cohort expansion process when there are not enough completers in a cohort to calculate value-added earnings. (3) Pushes out the first year VAE will be calculated for WF Pell programs to 2030-2031. |
The first change addresses an issue in the NPRM where the VAE formula would include the “earnings” of students who went on to further education after completing the WF Pell program. These students would naturally earn little-to-nothing in wages, which would artificially bring down the median earnings value for the program and suppress its tuition rate. The second change alters how the cohort aggregation process works for WF Pell programs. Now, the Department will go back up to four award years to build out a cohort of 30 Title IV completers. The third change delays the first VAE calculation one year to allow for at least three full years before completers’ earnings are measured. |
For more information, please contact:
Justin Monk