Introduction

The Federal Pell Grant program, authorized by Title IV of the Higher Education Act (HEA), is the single largest source of federal grant aid supporting postsecondary education students.¹ In FY2023, the Pell Grant program is estimated to make $30 billion available to over 6 million students.² For several years, Congress and stakeholders in the higher education and workforce training communities have promoted the possibility of expanding Pell Grants to short-term programs—programs with durations below the current statutory minimum. This report provides background on this policy option and compares key provisions of three relevant legislative proposals introduced in the 118^th Congress. The comparison explains, as available, the rationale for these provisions and similar HEA provisions.

Under current law, educational programs must meet or exceed statutory duration requirements for enrolled students to qualify for a Pell Grant. Under proposals to expand Pell Grants to short-term programs, a postsecondary student who is otherwise Pell-eligible but enrolled in a short-term program would be eligible to receive a Pell Grant award prorated to the duration of the program (short-term Pell Grants). Generally, the proposals would support students enrolled in educational programs that provide 150-599 clock hours of instruction over 8-14 weeks, meet requirements under Title IV of the HEA, and meet additional proposed requirements.

The meaning of short-term throughout this report varies depending on the context, statutory provisions, regulations, and U.S. Department of Education (ED) guidance. Every effort is made to define the term in context.

This report is intended to inform Congress as it considers legislation authorizing short-term Pell Grants. The first section discusses current and historical context for HEA Title IV federal student aid and short-term programs. The second section describes three proposals from the 118^th Congress that would establish a new type of Pell Grant that would support student enrollment in short-term programs. All references to current law denote the HEA as in effect on or before July 1, 2024, as a result of amendments by the FAFSA Simplification Act (FSA; Title VII, Division FF, P.L. 116-260 [Consolidated Appropriations Act, 2021]) and the FAFSA Simplification Act Technical Corrections Act (FSATCA; Division R, P.L. 117-103 [Consolidated Appropriations Act, 2022]).³

HEA Title IV Aid and Short-Term Educational Programs

HEA Title IV currently authorizes, and has historically authorized, several federal student aid programs, including Pell Grants and student loans. Such aid has been available to postsecondary students in variously defined short educational programs. Some have expressed ongoing concerns regarding the value and suitability of such programs.

After a description of the Pell Grant program, this section briefly reviews the policy arguments for and against extending Pell Grants to students enrolled in short-term programs and describes the historical and current use of student loans and Pell Grants for short programs, as well as related findings.

Pell Grant Program Under Current Law

HEA Title IV-eligible students who are financially needy undergraduates may be awarded Pell Grants to defray the cost of their postsecondary education while enrolled in HEA Title IV-eligible undergraduate programs.⁴ Financial need is determined through a combination of the family's adjusted gross income (AGI) and the student aid index (SAI). SAI is calculated in accordance with an HEA-defined methodology that establishes how much the student's family is expected to contribute to his or her educational costs.

An HEA Title IV-eligible undergraduate program must be offered by a public, private nonprofit, or proprietary (private for-profit) HEA Title IV-participating institution of higher education (IHE).⁵ HEA Title IV-participating IHEs must satisfy the requirements of a program integrity triad—state authorization, accreditation or preaccreditation, and certification by ED—as well as additional criteria. An HEA Title IV-eligible undergraduate program offered by a public or private nonprofit institution must

• lead to an associate's or bachelor's degree,⁶
• be a qualifying postbaccalaureate teacher education program,
• be at least one academic year of training that leads to a recognized nondegree credential and prepares students for gainful employment in a recognized occupation (see the "Gainful Employment in a Recognized Occupation" section), or
• meet or exceed the HEA-specified minimum number of hours and weeks of instruction (see text box) and prepare students for gainful employment in a recognized occupation.

If the program is offered by a proprietary HEA Title IV-participating IHE, it must either (1) be a qualifying postbaccalaureate teacher education program or (2) meet the HEA-specified number of hours and weeks of instruction (see text box) and prepare students for gainful employment in a recognized occupation.⁷

Gainful Employment in a Recognized Occupation

HEA requires that some educational programs "prepare students for gainful employment in a recognized occupation." Prior regulations, which have been rescinded, established gainful employment rules to operationalize the statutory phrase.⁸ In May 2023, ED published proposed rules for new gainful employment regulations.⁹ These regulations would establish program-level metrics relating to debt-to-earnings limits and earnings compared to high school graduates, and the proposed rules would require the disclosure of program-level performance information (e.g., primary occupation, completion rate, program costs) to prospective students.

Short-Term Pell Grant Policy Arguments

Congress and higher education advocacy organizations have generally described several justifications for extending Pell Grants to educational programs that are shorter in duration than permitted under current law. In general, the policy is intended to benefit prospective students, employers, and the overall economy. Suggested advantages have included the following:

• support for short-term training may increase workforce participation and lead to the filling of vacant positions for employers,¹⁰
• not all students are interested in or have the capacity to achieve a degree,¹¹ and
• some short-term training programs may provide equal or better employment and earning prospects to completers and federal return on investment than some educational programs that are Pell-eligible under current law.¹²

Proponents have also argued that Pell Grants may be an optimal mechanism to support short-term training because the program is a quasi-entitlement program—for the most part, eligible students receive the Pell Grant award amount calculated for them without regard to available appropriations—with a stable funding stream.¹³

Opposition to expanding Pell Grants to short-term programs is rooted in historical abuse and inconsistent employment returns for these programs.¹⁴ For example, federal investigations have found various abuses by IHEs across all institutional sectors related to the provision of student loans for shorter educational programs (see the "Student Loans for 300-599 Clock Hour Programs" section). While completers of some short-term programs have higher wages or lengthier employment terms than noncompleters, completers of other short-term programs do not realize such benefits.¹⁵ The evidence of fraud and inconsistent returns have resulted in some advocates of short-term Pell Grants proposing various limitations on the expansion, including, but not limited to, establishing employment and earnings standards for graduates.

Student Loans for 300-599 Clock Hour Programs

Although Pell Grants are not currently available to students in short-term programs, federal student loans have been since the 1960s. Experience with the administration of student loan programs for postsecondary students enrolled in eligible programs of at least 300 clock hours might inform the short-term Pell Grant policy proposals. The requirements for such student loan programs have been modified over time in response to findings of abuse and poor outcomes.

Pre-1992 Loan Programs and Outcomes

Since at least 1965, and through 1992, student loans were available through various loan programs for postsecondary students for the pursuit of educational programs of at least 300 clock hours. These loan programs were intended to provide parallel access to postsecondary education for vocational and collegiate students in recognition of diverse student objectives and preferences, as well as workforce needs.¹⁶ The National Vocational Student Loan (NVSL) program was available to students enrolled in vocational programs of at least 300 clock hours of classroom instruction (or the equivalent) at public, private nonprofit, and proprietary business, trade, technical, and vocational schools.¹⁷ The NVSL loan program was merged into the HEA Title IV-B student loan program to simplify program administration.¹⁸ By 1970, the HEA Title IV-B student loan program was available for programs of not less than 300 clock hours of classroom instruction (or the equivalent).¹⁹

In the 1970s, shorter educational programs, especially those offered by proprietary institutions, were associated with poor student outcomes and abuses. Employment and wages for program graduates were generally poor regardless of whether the training was offered by proprietary or public institutions. Based on a sample of 2,000 graduates from both proprietary and public institutions, 20% of professional and technical graduates were employed in related jobs, and 80% of lower-level clerical or service worker graduates, excluding secretaries, barely earned minimum wage. Training offered by proprietary institutions was found to be associated with deceptive advertising, predatory recruiting practices, unfair refund policies, low completion rates, poor curriculum and instructional quality, institutional financial instability and high bankruptcy risk, and improper training for a job that may not exist.²⁰

By the early 1990s, several concerns had been raised regarding vocational programs of 300-599 clock hours and the provision of student loans for such programs. Congressional testimony provided prior to the enactment of the Higher Education Act Amendments of 1992 by the Secretary of Education and other stakeholders postulated that eliminating loans for shorter programs would reduce loan defaults and the use of student aid for programs of poor quality with poor employment outcomes.²¹ In addition, congressional testimony in the early 1990s by a student loan guaranty agency, a state licensing agency, an accrediting agency, and the ED Inspector General indicated that some IHEs had increased the instructional duration of programs in order for students to be eligible for loans, and such program stretching was associated with increased debt and time to completion.²² Some Members of Congress advocated for greater federal monitoring of these programs rather than eliminating federal student aid for them because shorter educational programs provided greater choice among educational program offerings for students, an opportunity to pursue training for disadvantaged students, and practical training that led to remunerative employment.²³

Higher Education Amendments of 1992

The Higher Education Amendments of 1992 (1992 amendments; P.L. 102-325), as amended by the Higher Education Technical Amendments of 1993 (P.L. 103-208), enacted several provisions to address reported problems of fraud and abuse in the HEA Title IV aid programs generally, and student loans for shorter programs specifically. For example, the student loan cohort default rate threshold was lowered for all IHEs, making it easier for IHEs to lose HEA Title IV eligibility.²⁴ The amendments also included student protections. For example, IHEs were required to establish a fair and equitable tuition refund policy for HEA Title IV aid recipients. Regarding student loans for shorter programs specifically, the 1992 amendments revised the definition of HEA Title IV eligible programs and established requirements for shorter programs for which students may borrow Direct Loans.

Because vocational programs of 300-599 clock hours had been linked to charges of fraud, abuse, and high default rates, the 1992 amendments established requirements that

• for purposes of all HEA Title IV aid programs, eligible undergraduate educational programs be at least 600 clock hours, 16 semester hours, or 24 quarter hours over a minimum of 15 weeks and prepare students for gainful employment in a recognized profession;
• for purposes of all HEA Title IV aid programs, eligible educational programs be 300-599 clock hours (or the equivalent) over a minimum of 10 weeks and require at least an associate's degree for admission; and
• for purposes of providing loans to students enrolled in short programs, eligible educational programs be 300-599 clock hours and have verified completion and placement rates of at least 70%.²⁵

The 1992 requirements for shorter programs remain in current law, but the 1992 definition of eligible program has been expanded to include programs offered through telecommunications and programs that utilize direct assessment.²⁶

Current Requirements for 300-599 Clock Hour Programs Participating in the Direct Loan Program

Under current law, students in 300-599 clock hour programs may be eligible to borrow a federal student loan from the William D. Ford Federal Direct Loan (Direct Loan, or DL) program.²⁷ Such educational programs are programs of 300-599 clock hours of instruction that are offered during a minimum of 10 weeks and have a verified completion rate and placement rate of at least 70%. The Secretary may establish additional requirements for 300-599 clock hour programs. Under current regulations, the program must

• provide undergraduate training that prepares a student for gainful employment in a recognized occupation,
• admit as regular students some individuals who have not completed the equivalent of an associate's degree,
• have been in existence for at least one year, and
• not be more than 50% longer than the minimum training period required by the state or federal agency (if any) for the occupation for which the program is intended.²⁸ For some occupations, state and federal agencies require that entrants receive a minimum number of hours of instruction on certain subjects.²⁹

Regardless of program length, students borrowing Direct Loans must be enrolled on at least a half-time basis.³⁰ The Secretary must verify the 300-599 clock hour program meets the established statutory and regulatory requirements before the first student is eligible to receive a Direct Loan in the program.

On April 10, 2019, there were approximately 114 ED-approved 300-599 clock hour programs for which a student could borrow a Direct Loan. Public and proprietary IHEs offered most of the programs—20% and 76%, respectively. Almost half (46%) of all the programs were in the cosmetology and related personal grooming services, and an additional 14% were in the health professions and related clinical sciences.³¹ The majority (65%) of programs required 400 or fewer clock hours of instruction. Sixty percent of programs reported completion rates over 90%, and 44% of programs reported placement rates above 90%.³²

A 2021 analysis by the Brookings Institution of the outcomes for 300-599 clock hour programs for which students may borrow Direct Loans found that earnings of graduates from more than two-thirds (70%) of such programs did not exceed the average earnings of high school drop outs.³³

History of Pell Grants for Shorter Programs

As opposed to the student loan programs, Pell Grants have not been available to students enrolled in shorter programs. The Pell Grant program (initially known as Basic Educational Opportunity Grants) was enacted by the Education Amendments of 1972 (P.L. 92-318). As originally implemented, a Pell-eligible educational program had to lead to a degree or certificate, be of at least six months in duration, and admit as regular students only high school graduates (or the equivalent).³⁴

The definition of HEA Title IV-eligible educational program enacted by the 1992 amendments applied to the Pell Grant program as well as other HEA Title IV aid programs, except that 300-599 clock hour educational programs that did not require at least an associate's degree for admission were not Pell-eligible.³⁵ The 1992 eligible program requirements (see the "Higher Education Amendments of 1992" section) generally remain in effect under current law.

ED Pell Grant Experiments with Shorter Educational Programs

Since at least the 1990s, ED has tested various statutory and regulatory changes in an effort to improve the integrity of student aid delivery, improve services to students, and reduce administrative burdens.³⁶ In 2009, ED made a public solicitation for innovative strategies to improve postsecondary student outcomes.³⁷ In partial response to that solicitation, ED conducted two Pell Grant experiments from November 2012 to June 30, 2017. Experiment #1 provided Pell Grants to students with a bachelor's degree, and Experiment #2 provided Pell Grants to students in short-term programs. The experiments were intended to test whether allowing students to receive a Pell Grant while pursuing shorter vocational training programs would address the unemployed or underemployed status of such individuals.³⁸ The experiments were designed with a random assignment evaluation such that the outcomes might inform potential statutory changes. Most of the entering participants were over age 30 with an average adjusted gross income of $22,176.

The outcomes that were evaluated under these experiments focused on program enrollment and completion. ED indicated that data related to employment and earnings could not be collected during the study period and the results might not have met statistical requirements for measuring effects.

Post-Bachelor's Pell Grant Experiment

The post-bachelor's experiment (Experiment #1), provided Pell Grants to otherwise Pell-eligible students with a bachelor's degree who were unemployed or underemployed and started the educational program for the first time. The program had to

• meet the current law minimum durational requirements,
• be no more than one year in duration,
• be Pell-eligible, and
• meet local or regional workforce needs as determined by the institution in consultation with employers or state or local workforce agencies.

The Pell Grant was limited to one scheduled award over no more than two award years. Actual awards were prorated based on the program's length and number of credits awarded. Experiment #1 had 35 IHEs and 414 students participating. Otherwise Pell-eligible students with a bachelor's degree demonstrated a 20 percentage-point increase in enrollment and completion when offered a Pell Grant for shorter educational programs. Over 50% of participants enrolled in health professions and related programs. They completed their programs within 30 months, on average, as many participants were not enrolled full-time. The average cost of attendance was $19,600.³⁹ Participants received $3,577 in Pell Grants, on average. In addition, one-third of participants received federal student loans averaging $12,950.⁴⁰

Short-Term Pell Grant Experiment

The short-term Pell Grant experiment (Experiment #2), provided Pell Grants to Pell-eligible students in short-term programs. The educational program had to

• provide at least 150 clock hours of instructional time,
• be at least eight weeks in duration,
• be offered by a community college or postsecondary vocational institution, and
• meet local or regional workforce needs as determined by the institution in consultation with employers or state or local workforce agencies.

The Pell Grant was prorated for the shorter instructional time.⁴¹ Experiment #2 had 28 IHEs and 2,270 participating students participating. Over 80% of these students pursued programs in (1) transportation and materials moving or (2) health professions. Pell-eligible students demonstrated a 10 percentage-point increase in enrollment and completion when offered a Pell Grant for short-term programs. The average cost of attendance was $16,900.⁴² On average, participants received $1,312 in Pell Grants, and 9% received federal student loans averaging $4,021.⁴³

ED's evaluation has some limitations. The findings may not be generalizable because the sample sizes were small, 72% of the participating institutions were public two-year colleges, and almost half of the institutions were in the southeastern United States. Although the analysis did not find evidence of reduced associate's degree completion, neither experiment examined employment or wage outcomes, so it is unclear to what extent pursuit and completion of shorter educational programs would benefit participants in the short- and long-term in the workforce.⁴⁴

Short-Term Pell Grant Bills in the 118^th Congress

Although short-term Pell Grants have bipartisan support in terms of concept, there is salient disagreement in two policy areas—institutional eligibility and program quality assurance mechanisms.⁴⁵

This section compares three bills that have been introduced in the 118^th Congress:⁴⁶

• The Promoting Employment and Lifelong Learning Act (PELL Act; H.R. 496), as introduced on January 25, 2023. This bill is sponsored or co-sponsored by at least 10 Members of the House Committee on Education and the Workforce (E&W), including the committee chair.
• The Jobs to Compete Act (H.R. 1655), as introduced on March 17, 2023. This bill is sponsored by the ranking member of E&W and has at least one cosponsor on the committee.
• The Jumpstart Our Businesses by Supporting Students Act (JOBS Act; S. 161), as introduced on January 31, 2023. This bill has at least nine cosponsors on the Senate Committee on Health, Education, Labor and Pensions.⁴⁷ The companion legislation, the JOBS Act of 2023 (H.R. 793), was introduced February 2, 2023, and has at least one cosponsor on E&W.

This section briefly describes some of the major provisions included in these bills, as introduced; it does not provide a comprehensive discussion of every provision contained in the bills.⁴⁸ The analysis related to S. 161 also applies to H.R. 793. Table 1 provides a summary of key characteristics of the proposals.

General Frameworks of the Legislation

For the most part under current law, HEA Title IV-eligible educational programs are Pell-eligible programs as long as they are undergraduate programs. As mentioned earlier, all references to current law denote the HEA as in effect on or before July 1, 2024, as a result of amendments by the FAFSA Simplification Act (FSA; Title VII, Division FF, P.L. 116-260 [Consolidated Appropriations Act, 2021]) and the FAFSA Simplification Act Technical Corrections Act (FSATCA; Division R, P.L. 117-103 [Consolidated Appropriations Act, 2022]).⁴⁹

None of the three bills discussed in this report simply reduce the minimum hours for a program to be Pell-eligible. Instead, each bill creates a new type of award within the existing authorization for Pell Grants in HEA Section 401 and then creates supplemental criteria related to the new award. Establishing a new type of award within the existing Pell Grant program means that these new programs would utilize existing Pell funding streams. The supplemental criteria would modify student eligibility, institutional eligibility, educational program eligibility, and award rules, as well as establish additional requirements.

The next sections begin with a comparison of eligibility requirements for students, IHEs, and the short-term programs based on current law and the three bills. This is followed by a description of any procedures the bills would establish for the approval of Pell-eligible short-term programs. Subsequent sections describe changes the bills would make to Pell Grant award rules, reporting and disclosure requirements, and the Direct Loan program.

H.R. 496 and H.R. 1655 call the new awards the Workforce Pell Grants Program, and S. 161 calls them the Job Training Federal Pell Grant Program. This report collectively refers to these new proposed awards as short-term Pell Grants.

Eligible Students

Under current law, individuals with a bachelor's degree (or the equivalent) are not eligible for a Pell Grant.

Under all three bills, students who are enrolled in eligible short-term programs and otherwise eligible for a Pell Grant would be eligible for a short-term Pell Grant. All three bills would also establish eligibility for short-term Pell Grants to students with a bachelor's degree but not a postbaccalaureate degree.⁵⁰

ED's short-term Pell Grant Experiment #1 included individuals with a bachelor's degree because some such students are unemployed or underemployed.⁵¹ Approximately 21% of undergraduates seeking an undergraduate certificate in AY2015-2016 had previously earned a degree.⁵² In AY2019-2020, such pursuit represented approximately 22% of undergraduates with a degree.⁵³ Among AY2013-2014 bachelor's degree recipients, 5.8% pursued further education in a two-year institution within two years of earning their degree.⁵⁴

Eligible Institutions

Under current law, only HEA Title IV-participating IHEs may award Pell Grants to eligible students enrolled in Pell-eligible educational programs.⁵⁵ Domestic public, private nonprofit, and proprietary institutions may be HEA Title IV-eligible if they meet several statutory and regulatory requirements, including being accredited by an ED-recognized accrediting agency. HEA Title IV-eligible IHEs that receive ED certification as HEA Title IV-participating IHEs may disburse Pell Grants.

Under current law, there are additional requirements for Title IV-participating IHEs that disburse Pell Grants to incarcerated students that are similar to those in the short-term Pell Grant proposals.⁵⁶ Such IHEs must not be proprietary IHEs and must not have been subject within the preceding five years to the following unfavorable actions by ED, their accrediting agency, or the state:

• any suspension, emergency action, or termination of programs under HEA Title IV;
• any adverse action by the institution's accrediting agency; or
• any action by the state to revoke a license or other authority to operate.

Under H.R. 496 and H.R. 1655, current HEA Title IV-participating IHEs from all sectors could offer Pell-eligible short-term programs. S. 161 would restrict eligible institutions to public and private nonprofit institutions, thus excluding proprietary IHEs.

None of the proposals would expand the types of institutions that could offer short-term programs compared to current law. For example, the proposals would not include employers or professional organizations as eligible institutions.

While institutions from all sectors would be eligible under H.R. 1655, the bill would exclude institutions that have been subject during any of the preceding five years to the following adverse actions:

• any suspension, emergency action, or termination of programs under HEA Title IV;
• any adverse action by the institution's accrediting agency; or
• any action by the state to revoke a license or other authority to operate.

H.R. 496 and S. 161 would not establish similar restrictions related to institutional standing.

The proposed accreditation requirements are described below.

Role of Accreditation and Accreditors

Under current law, an HEA Title IV-eligible educational program must be evaluated by an ED-recognized accrediting agency through one of two options. The IHE offering the Title IV-eligible educational program may be accredited (or preaccredited if it is a public or private nonprofit IHE) by an institutional accrediting agency recognized by ED for the purposes of Title IV aid. Alternatively, if the IHE is a single-purpose institution (e.g., a stand-alone medical school), the Title IV-eligible educational program may be accredited by a programmatic accrediting agency recognized by ED for the purposes of Title IV aid.

In addition, HEA Title IV-eligible distance or correspondence education programs can only be evaluated by those accrediting agencies that ED has recognized as having the evaluation of distance or correspondence education programs within their scope of recognition. The IHE may be accredited by such an institutional accrediting agency, or with respect to a single-purpose institution, the program may be accredited by such a programmatic accrediting agency. ED-recognized accrediting agencies may expand their scope of recognition to include distance education by notifying ED.⁵⁷ Accrediting agencies that accredit IHEs offering distance education programs or individual distance education programs are not required to have separate standards, procedures, or policies for the evaluation of distance education but are required to mandate that IHEs have processes in place to verify student identities.

Regarding the recognition of specific accrediting agencies, ED considers recommendations from the National Advisory Committee on Institutional Quality and Integrity (NACIQI). NACIQI provides recommendations to ED for accrediting agencies that may relate to the criteria for agency recognition, the recognition of specific agencies, and other issues. If the enrollment at an IHE offering distance education increases by 50% or more within the institutional fiscal year, NACIQI must review at its next meeting any change in scope for the accrediting agency that accredits such IHE.

Each of the three proposals to expand Pell Grants to short-term programs generally would require that IHEs offering Pell-eligible short-term programs be accredited by an institutional accrediting agency. ED would have to include within the agency's scope of recognition the evaluation of IHEs based on standards "for determining if the institution has the capability to effectively offer" Pell-eligible short-term education programs. Each bill would establish requirements for accreditors that seek to include IHEs that offer short-term programs within their scope of recognition. The bills would not authorize ED recognition of programmatic accrediting agencies for purposes of Pell-eligible short-term education programs.

H.R. 496 would require that accrediting agencies recognized to assess IHEs with Pell-eligible short-term programs ensure the short-term programs meet several requirements. The accrediting agency would be responsible for ensuring the programs are aligned with in-demand industry sectors or occupations, meet hiring requirements for those sectors or occupations, have been offered for at least one year, and have verified completion and placement rates of at least 70%.

H.R. 1655 would explicitly require that each accrediting agency that is recognized to assess IHEs with Pell-eligible short-term education programs ensure the education of the short-term program is aligned with the requirements of high-skill, high-wage, or in-demand industry sectors or occupations in the state or local area in which the program is provided. The accrediting agency would have to rely on an appropriate entity (e.g., workforce development board) for determining such alignment. The accrediting agency would also have to ensure the educational content of the short-term program and postsecondary credential satisfy any professional licensure or state certification standards in the state(s) in which the program is offered.

Upon enactment of H.R. 496 or H.R. 1655, ED-recognized accrediting agencies would be given interim authority to temporarily expand their scope of recognition to include Pell-eligible short-term education programs by notifying ED and explaining within the notification how the agency intends to meet the additional recognition criteria. The temporary expansion in accreditation scope would expire within five years of the bill's enactment date unless ED were to approve the expansion.

H.R. 496 and H.R. 1655 would each also establish additional requirements for NACIQI. They would require NACIQI to hold meetings through 2025 to evaluate the additional criteria in the scope of recognition for accrediting agencies that accredit IHEs offering Pell-eligible short-term programs. If an accrediting agency so expands its scope of recognition, NACIQI would be required to review at its next meeting the addition in scope for such accrediting agency and advise ED on whether the agency meets the statutory criteria.

S. 161 would require that accrediting agencies recognized to assess IHEs with Pell-eligible short-term programs ensure the educational content of the short-term program meets hiring requirements and satisfies the educational prerequisites for relevant licensure or certification.

Characteristics of Programs Eligible for Short-Term Pell Grants

As noted previously, HEA Title IV-eligible educational programs generally are Pell-eligible under current law as long as they are undergraduate programs. Educational programs of 300-599 clock hours that are eligible for the Direct Loan program are not Pell-eligible. For prison education programs (PEPs), the HEA establishes several additional requirements beyond the general HEA Title IV educational program eligibility requirements so that enrolled incarcerated students may receive Pell Grants.⁵⁸ Some of these additional requirements have analogies in the short-term Pell Grant proposals, which will be described below as appropriate.

Each of the short-term Pell Grant proposals would establish additional requirements for educational programs to be eligible under the proposed new program. In many cases, the additional requirements serve to ascertain that the educational programs supported by the new short-term Pell Grant program provide workers with skills that are relevant in the labor market. Generally, with the exception of the program duration requirement, these additional requirements can be classified as emphasizing program (administrative) characteristics or participant outcomes (performance-based metrics).

Eligible Program Duration

Under current law, a Pell-eligible program is an undergraduate program that requires at least 600 clock hours of instruction or 16 semester hours (or the equivalent) offered during a minimum of 15 weeks. Alternatively, if an associate's degree is required for admission, an eligible program may be an undergraduate program of at least 300 clock hours of instruction or 8 semester hours (or the equivalent) offered during a minimum of 10 weeks.⁵⁹

H.R. 496, H.R. 1655, and S. 161 would all authorize short-term Pell Grants for otherwise HEA Title IV-eligible programs of 150-599 clock hours offered over 8-14 weeks.⁶⁰ H.R. 496 and H.R. 1655 would permit programs measured in credit hours. Under all three bills, hour and week requirements would apply to undergraduate, graduate, and professional programs.⁶¹

H.R. 1655 and S. 161 would establish an additional maximum program duration based on state requirements. They would require that the short-term program not exceed by more than 50% the minimum training period required by the state (if applicable) for such program. This requirement would closely mirror the regulatory requirement for 300-599 clock hour programs that are eligible for the Direct Loan program.

Administrative Requirements for Programs Eligible for Short-Term Pell Grants

Each of the three bills would establish required components of eligible programs. Generally, these components would be in addition to existing requirements for HEA Title IV-eligible programs (e.g., they must be offered by a Title IV-participating IHE).

Labor Market Relevance

Under current law, with the exception of PEPs, the HEA does not require Pell-eligible educational programs to be aligned with specific occupations or to demonstrate labor market relevance.⁶² PEPs must satisfy any applicable educational requirements for professional licensure or certification in the state where the correctional facility is located or, in the case of a federal correctional facility, in the state in which most of the incarcerated individuals will reside upon release.

Each of the three bills has a general directive that the training programs supported by the new grant would meet hiring requirements of employers in in-demand industries. H.R. 496 specifically refers to employer hiring requirements in in-demand sectors under the WIOA.⁶³ H.R. 1655 refers to employer hiring requirements in high-skill, high-wage sectors or in-demand sectors under the WIOA.⁶⁴ S. 161 includes a more general reference to meeting the hiring requirements of employers.⁶⁵ H.R. 1655 and S. 161 each specify that eligible programs must provide training "aligned with the requirements of high-skill, high-wage, or in-demand industry sectors or occupations" in the state or local area, but the determination would be made by the accrediting agency under H.R. 1655 and by an industry or sector partnership under S. 161.⁶⁶

Beyond meeting hiring requirements, H.R. 496 does not specify any requirements related to licensure. H.R. 1655 and S. 161 both specify that eligible programs would be required to meet any applicable educational requirement for professional licensure or certification in the state.⁶⁷

Integration with WIOA ETPL

WIOA is the primary federal workforce development legislation and supports job training for eligible workers.⁶⁸ The statute authorizes formula grants to states that are administered at the federal level by the U.S. Department of Labor (DOL). As a condition of receiving WIOA funds, states must conduct a labor market analysis to identify in-demand industries and occupations, and eligible training programs under WIOA must be in such industries and occupations. States identify eligible training providers through the development and publication of an ETPL. Providers on the WIOA ETPL must report on participants' participation and outcomes.⁶⁹

H.R. 496 would not require that programs be on the ETPL to qualify as an eligible short-term Pell program. The bill requires that programs "provide an education aligned with the requirements of in-demand industry sectors or occupations" as defined in WIOA.

H.R. 1655 and S. 161 would both require an eligible short-term Pell program to be on the ETPL created under WIOA for the state in which the program is located. Inclusion of a program on the ETPL implies that the state has determined the training program to be in an in-demand industry or occupation.

Credential Requirements

Under current law, Pell Grants can support programs that lead to a degree or certificate.

H.R. 1655 and S. 161 would both require an eligible short-term Pell program to lead to a recognized postsecondary credential, as defined by WIOA.⁷⁰ H.R. 496 does not have a similar requirement.

Articulation Requirements

Under current law and regulations, PEPs must offer credits that may be transferred to at least one IHE in the state where the correctional facility is located, or, in the case of a federal correctional facility, in the state in which most of the incarcerated individuals will reside upon release. In addition, PEPs must "be operating in the best interest of students," as determined by the appropriate correctional agency.⁷¹ The best interest determination must include, among other requirements, an assessment of whether all formerly incarcerated students are able to fully transfer their credits and continue their programs at any location of the IHE that offers a comparable program.

H.R. 496 would not require that programs eligible for short-term Pell Grants be part of an articulation agreement.

S. 161 and H.R. 1655 would both require that short-term Pell programs have mechanisms through which credits earned can be applied to a subsequent program. S. 161 and H.R. 1655 would require that eligible programs include means by which noncredit programs may be applied to credit programs.⁷² H.R. 1655 also has a more general requirement that eligible programs ensure "the acceptability of the credits received under the workforce program toward meeting [subsequent] certificate or degree program requirements." H.R. 1655 would establish an exception to this requirement for a program that "prepares students for employment in an occupation for which there is only one recognized postsecondary credential."

Other Requirements

H.R. 1655 would establish several additional requirements for the short-term Pell Grant programs that may be intended to ensure the quality of the program or improve student outcomes:

• The program could not be offered exclusively through distance education or a correspondence course except as a temporary response to a disaster or emergency.
• The program must have been offered by an IHE for not less than one year prior to becoming a short-term Pell program, as determined by the IHE's accrediting agency. This provision would be similar to one of the regulatory requirements for 300-599 clock hour programs that are eligible for the Direct Loan program.
• One-half of the amount of tuition and fees revenue for the program could not exceed the amount of educational spending for the program for each of the three most recent fiscal years.
• The program would have to provide counseling to students to help them achieve their educational and career goals.
• The program would have to provide counseling to students that reveals the industry sectors and occupations for which the program prepares students, the related certificate and degree programs for which the program prepares students, and sources of financial assistance.
• The program would have to be a career and technical education program as defined under the Carl D. Perkins Career and Technical Education Act (Perkins Act), wherein career and technical education is defined as organized educational activities that provide technical skills and academic content that lead to an industry-recognized credential, a certificate, or an associate's degree, or to further education.

In addition to the administrative requirements described above, S. 161 would establish an additional requirement for a short-term Pell program:

• The program would have to be a career and technical education program, but S. 161 would not define the term.

Outcome Metrics for Programs Eligible for Short-Term Pell Grants

With the exception of 300-599 clock hour programs that are eligible for the Direct Loan program, neither HEA Title IV nor regulations establish program-level completion and employment outcome requirements for Title IV-eligible programs offered at IHEs. The best interest determination for PEPs may include an assessment of whether earnings, completion rates, and job placement rates exceed established thresholds. ED publishes outcome data on resources like the College Scorecard, but these outcome metrics, by themselves, have no direct effect on institutional or program eligibility for student aid programs. The College Scorecard allows the public to search for and compare colleges by their graduation rates, the median earnings of former students, and the median earnings of program completers by field of study and other characteristics.⁷³ The proposed gainful employment rules (see the "Gainful Employment in a Recognized Occupation" section) would establish program-level metrics relating to debt-to-earnings limits and earnings relative to high school graduates. Some provisions in the short-term Pell Grant proposals are similar to some of the proposed gainful employment rules.

In practice, institutions and programs often set their own standards for student learning outcomes, depending on a variety of factors such as the level of education offered and the skills and competencies required of graduates in different fields, and these standards may be guided by accrediting agency policies. Accrediting agencies then evaluate the appropriateness of those standards and whether institutions and programs use information gained from student learning outcomes to improve student learning.⁷⁴

H.R. 496 and H.R. 1655 have distinct earnings requirements but somewhat similar requirements related to completion and placement. In addition, H.R. 1655 would require that Pell-eligible short-term programs meet gainful employment requirements.

S. 161 does not include outcome metrics in the program eligibility requirements and is therefore not discussed in this section.

Earnings Requirements

H.R. 496 would establish a "value-added earnings" metric and require that it is equal to or exceeds the published tuition and fees for the program. The metric would be calculated for students who received HEA Title IV aid and completed the program three years prior. The metric would be calculated as the difference between (1) the median earnings of such students, as adjusted by the state and metropolitan area regional price parities and (2) 150% of the federal poverty line applicable to single individuals.⁷⁵

H.R. 1655 would establish two earnings metrics. Eligible programs would be required to meet both.

• The first metric would be a "median earnings increase requirement" of at least 20%. This metric would be calculated on the basis of the median earnings of students approximately six months after completing a program compared to the median earnings of the students prior to enrollment. The bill would establish that programs must report these metrics within 18 months of being approved as an eligible program.
• The second metric involves program completers exceeding the earnings of a comparison group. The bill would specify that the median earnings of program completers must exceed the median earnings for adults aged 25-34 with only a high school diploma (or equivalent) in the state in which the program is located.

The value-added earnings metric in H.R. 496 would not directly consider a participant's earnings prior to program participation. Instead, it would focus on earnings relative to program cost.

S. 161 would not establish an earnings metric that affects program eligibility.

Completion and Placement Rates

H.R. 496 and H.R. 1655 would establish similar requirements for completion and job placement. Both bills would require

• a verified completion rate of at least 70%, calculated so as to ensure that a student would be counted as a completion if the student finished the program within 150% of the normal time for completion,⁷⁶ and
• a job placement rate of at least 70%.⁷⁷

Neither bill defines placement. For example, it is unclear if a program participant who is subsequently employed in a field unrelated to their training would be considered a successful placement.

S. 161 would not establish requirements related to completion and placement.

ED Approval Procedures for Programs

Under current regulations, in most instances, an HEA Title IV-participating IHE may self-certify that a new educational program is an eligible program before disbursing Title IV funds to students enrolled in it. To self-certify, an IHE must obtain any required state and accrediting agency approvals and ensure the program meets all statutory and regulatory requirements. Some Title IV-participating IHEs and programs require written approval from ED before disbursing Title IV aid to students in new educational programs.⁷⁸ For example,

• an IHE must await approval if the new educational program is an undergraduate, 300-599 clock hour program that is eligible for Direct Loans⁷⁹; and
• an IHE must await approval of the first PEP at the first two correctional institutions.⁸⁰ Before approving the PEP, ED is to review the approvals granted by the entity overseeing the correctional institution, the state, and the accrediting agency, and ensure other program requirements are met.

All three short-term Pell Grant proposals would require a Title IV-participating IHE to apply for and await ED approval for each new short-term program before disbursing Pell Grants to enrolled students.

Under H.R. 496, ED could consider a program that was not previously a Title IV programs to be an eligible short-term Pell Grant program for a provisional eligibility period of no more than three years. To qualify for the provisional eligibility period, the program would have to meet the hour and week durational requirements, receive accrediting agency approval, and meet the value-added earnings metric (see the "Earnings Requirements" section).⁸¹ If the earnings data were determined to be inaccurate, the IHE would be required to return any HEA Title IV aid funds received following the provisional approval. H.R. 496 would not establish requirements for approvals following the provisional approval period.

Under H.R. 1655, ED would be required to approve or disapprove each new short-term program within 120 days of receiving an application. Before approving the program, ED would have to receive state certification that the program meets three criteria:

• 1. it aligns with the requirements of high-skill, high-wage, or in-demand industry sectors or occupations;
• 2. it fulfills the applicable WIOA requirements; and
• 3. it leads to a recognized postsecondary credential that satisfies employment requirements.

H.R. 1655 would establish an initial approval period of two years and subsequent approval periods of three years. If ED were to determine that the program no longer met the approval requirements, ED would be required to deny a subsequent approval application, ensure enrolled students receive transcripts, and prohibit the approval of substantially similar programs. ED could immediately withdraw approval of the program.

Under S. 161, ED would be required to approve or disapprove each new short-term program within 60 days of receiving an application. Before approving the program, ED would be required to receive state certification that the program meets all of the short-term program requirements. S. 161 would not establish approval periods or disapproval procedures.

Award Rules

Under current law, the amount of an eligible student's Pell Grant award is determined on the basis of a set of award rules. A student's Pell Grant scheduled award—the maximum Pell Grant aid a full-time, full-academic-year student can receive—is determined based primarily on either AGI or SAI:⁸²

• A student whose AGI is below specified thresholds may be eligible for a scheduled award equal to the maximum Pell Grant.⁸³
• A student who is not eligible for the maximum Pell Grant based on their AGI being below specified thresholds may be eligible for a scheduled award based on SAI as long as the scheduled award is no lower than 10% of the total maximum award, also known as the minimum scheduled award.
• A student whose AGI is not below specified thresholds and who is not eligible based on SAI may be eligible for a scheduled award equal to the minimum award if their AGI is between specified limits.

Students who are enrolled less-than-full-time, less than a full academic year, or in less-than-full-academic year programs do not receive their scheduled award. Instead, they receive a proportionally reduced amount. Under the lifetime eligibility limit, a student may receive no more than the equivalent of 12 full-time semesters of Pell Grant awards. Each of the proposals would use the same general award rules, with some exceptions to the lifetime eligibility limit and minimum award rule.⁸⁴

H.R. 1655 and S. 161 would address the lifetime eligibility limit, while H.R. 496 would not. Under H.R. 1655 and S. 161, a student would be eligible for no more than 12 full-time semesters (or the equivalent in part-time educational pursuit) in aggregate of short-term Pell Grants and Pell Grants. H.R. 496 would not establish a lifetime eligibility cap for short-term Pell Grants or an interaction between short-term Pell Grants and Pell Grants.

All three proposals would eliminate the minimum award for students whose scheduled award is based on SAI if such students are pursuing Pell-eligible short-term programs. In other words, the scheduled award for such students could be as small as $1. For a more detailed description and examples related to the elimination of the minimum award rule, see the Appendix. In addition, S. 161 would lower the minimum scheduled award from 10% to 5% of the total maximum award for students who are eligible for

• a scheduled Pell Grant award based on SAI and are not pursuing Pell-eligible short-term programs, and
• a scheduled award equal to the minimum award because their AGI is between specified limits regardless of the hours and weeks in the educational program.

Reporting and Disclosure Requirements

Under current law, to participate in the HEA Title IV aid programs, institutions must disclose various information to the public and report other information to ED.⁸⁵ The information to be reported to ED includes, for example, institutional characteristics and operations, student enrollment and completions, financial aid, counseling for students receiving HEA Title IV loans, and disclosures for HEA Title IV loans and private education loans. With respect to their educational programs, IHEs must disclose to prospective and enrolled students

• whether completion of educational programs meet the educational requirements for specific licensure or certification needed for employment if the educational program is designed to meet or is advertised as meeting such educational requirements in the applicable states, and
• estimated costs associated with educational programs.

As mentioned earlier, the proposed gainful employment regulations would require the disclosure of program-level performance information (e.g., primary occupation, completion rate, program costs) to prospective students in applicable programs. If an institution fails to make the required disclosures or reports, ED may impose sanctions including limiting the institution's participation in HEA Title IV student aid programs, terminating the institution's participation in HEA Title IV student aid programs, or imposing monetary civil fines.

IHEs report the aforementioned information to ED through the Integrated Postsecondary Education Data System (IPEDS) and National Student Loan Data System (NSLDS). ED compiles data from IPEDS, NSLDS, and administrative tax records maintained by the Department of the Treasury into the College Scorecard, which is made available to the public through a web portal and downloadable data files. The College Scorecard allows the public to search and compare colleges by their costs, admissions, results, and other characteristics, as well as their fields of study by credential type, salary, WIOA qualification, and other characteristics. The fields of study are categories of programs defined by subject area (e.g., accounting and business/management) and credential level (e.g., undergraduate certificates or diplomas).⁸⁶

While H.R. 496 and H.R. 1655 would increase the reporting and disclosure requirements, S. 161 would not establish additional requirements.

H.R. 1655 would require that IHEs offering Pell-eligible short-term programs provide disclosures about the program to prospective students. The disclosures would include information related to institutional charges, estimates of grant aid, a program's completion rate, the pass rate for applicable professional licensure or certification examinations, and the employment rate and earnings of program completers. Prospective students would have to sign an enrollment agreement that includes the disclosures. The IHE would also have to publish the disclosures on its website.

H.R. 496 and H.R. 1655 would require ED to expand the College Scorecard to report data on Pell-eligible short-term programs. Both bills would require data on each program's hour and week durational requirements, completion rates, and employment rates. Both bills would require earnings data as well, but the specific presentations would differ. For example, H.R. 496 would require information on the percentage of completers who have earnings above 150% of the federal poverty line for single individuals within three years of completion.⁸⁷ H.R. 1655 would require information on median earnings of completers within six months of completion. It would also require additional data on student demographics and re-enrollment in higher education. Under H.R. 1655, ED would be required to coordinate with the Secretary of Labor and IHEs to provide the requisite data.

In addition, H.R. 1655 would require that IHEs offering Pell-eligible short-term programs provide disclosures about the programs to ED. The IHE would be required to provide information annually for each program on overall expenditures, educational expenditures, and tuition and fees revenue.

Effect on Direct Loans for Students Pursuing 300-599 Clock Hour Programs

The Direct Loan program allows eligible students in educational programs of 300-599 clock hours of instruction over at least 10 weeks to borrow from the HEA Title IV Direct Loan program (see the "Current Requirements for 300-599 Clock Hour Programs Participating in the Direct Loan Program" section). The DL program supports Title IV-eligible students regardless of family income. The Pell Grant program supports lower-income Title IV-eligible students.

H.R. 496 and S. 161 would not amend the DL program for students pursuing 300-599 clock hour programs. Lower-income students would be able to combine the Pell Grant and Direct Loan while pursuing educational programs of 300-599 clock hours over at least 10 weeks. Lower-income students in shorter programs (i.e., 150-299 clock hours over 8-9 weeks) would only be eligible for Pell Grants.

H.R. 1655 would require that 300-599 clock hour programs be Pell-eligible short-term programs for enrolled students to receive Direct Loans. The ability of students in 300-599 clock hour programs that meet the current law requirements to receive Direct Loans would sunset within 60 days of ED approving the first short-term Pell Grant program.

Appendix. Calculation of Pell Grant Award Amounts for Shorter Clock Hour Programs

The amount of an eligible student's Pell Grant award is determined on the basis of a set of award rules. The scheduled award, based primarily on adjusted gross income (AGI) and student aid index (SAI), is the maximum Pell Grant aid a full-time, full-academic-year student can receive.⁸⁸ The scheduled award is prorated for the student's enrollment rate (if applicable) and the program's length (if applicable). The award may not exceed the cost of attendance (COA).

For clock-hour and credit-hour nonterm programs,⁸⁹ the scheduled award is prorated for the program's length (see the text boxes below). The amount of the scheduled award is prorated based on either the weeks of instruction or clock hours of instruction in comparison to the academic year minimums. The HEA academic year minimum for clock-hour programs is 900 clock hours over 26 weeks of instructional time. For credit-hour programs, the academic year minimum is 24 semester credit hours (or 36 quarter credit hours) over 30 weeks.

In addition, the Pell Grant award for shorter programs must be paid in a minimum of two installments over the course of the program. Generally, the proration is the lower of either (1) the hours in the payment period divided by the weeks in the academic year or (2) the weeks in the payment period divided by the weeks in the academic year.⁹⁰

For a student whose scheduled award is the minimum Pell Grant award, the scheduled award is also prorated for the program's length (see below).