By Catherine Brown, Senior Director, Policy and Advocacy
Reading time: Eight minutes
As many National College Attainment Network (NCAN) members know, the budget reconciliation bill enacted
this past July included a new program to expand Pell to short-term training programs. Effective July 2026, workforce programs of eight to 15 weeks that are aligned to high-wage, in-demand fields, and meet other criteria, will be able to offer Pell
Grants.
We’ve received a lot of questions about this initiative from NCAN members in recent weeks. We want to share with you the answers that we have – and some of the questions that remain. We also recorded a peer exchange on this topic that you can access
here.
What We Know
The US Department of Education (ED) has announced a negotiated rulemaking process to consider regulations for Workforce Pell
(WFP) that will begin in December and conclude in early January. That process will resolve many of the lingering questions, though others will take more time to rectify. Here’s what we can say at this time based on the statute:
Program Requirements
State governors are responsible for determining whether training programs meet the following requirements:
Programs must be between 150 and 599 clock hours and between eight and 15 weeks
Programs must be run by accredited institutions of higher education (IHEs) and have been offered for at least one year prior to being approved as a short-term Pell program.
For-profit programs at accredited IHEs are eligible.
Programs must prepare students for high-skill, high-wage, or in-demand industry sectors or occupations, as determined by state workforce boards, and meet the hiring requirements of employers.
Programs must lead to a recognized postsecondary credential that is stackable, meaning it can lead to an associate or bachelor’s degree, and portable across more than one employer.
Programs must have a 70% completion rate and a 70% job placement rate.
Programs must increase participants’ earnings above and beyond what they would have earned if they hadn’t participated in the program. This metric is measured by comparing the cost of the program with the median annual earnings of program completers
three years prior who received federal student aid and subtracting 150% of the federal poverty line.
Student Eligibility
Students will need to complete a Free Application for Federal Student Aid (FAFSA) to access WFP and be eligible for a Pell Grant based on their Student Aid Index (SAI).
Students may not receive a regular Pell Grant and a WFP grant concurrently though students may receive a WFP if they have already completed an associate or bachelor’s degree, if they have unused Pell eligibility.
Once prorated, WFP grants may fall below the $740 minimum grant of base Pell program.
Timeline
WFP will go into effect on July 1, 2026. While ED’s master calendar requirement dictates that regulations impacting the coming academic year must be in place by November 1
of the previous year, ED is permitted to implement voluntary programs early. Since IHEs are not required to offer WFP, ED can use this early adoption latitude in this scenario. In addition, because the budget reconciliation statute specifies an implementation date of July 1, ED may also be able to rely on emergency authority to adjust the normal regulatory timeline and process.
While ED is likely to release final WFP regulations by July 1, 2026, it will likely take longer for governors to interpret those regulations and develop an approved list of WFP providers in their state. ED will also have to adjust its backend systems
to ensure that all Pell awards are distributed and recorded properly so that students' lifetime eligibility usage (LEU) is tracked. This process is likely to take longer, and we may not see WFP programs launch until Spring of 2027.
What We Don’t Know
Of course, NCAN members have questions that go beyond what is specified in the statute. Here are some of those questions along with the best responses we can give at this time:
How will WFP grant amounts be determined?
The statute says the “[US] Secretary [of Education] shall award Workforce Pell Grants… in the same manner and with the same terms and conditions as the Secretary awards Federal Pell Grants…” That means, most likely, awards will be determined based on
the SAI and prorated in the same way that Pell Grants for clock hour programs are determined currently, using the formula below. We don’t yet know whether IHEs will develop a separate cost of attendance (COA) for each WFP program, or if IHEs will
use the same COA that they do in other programs.
Multiply the student’s Pell award by the lesser of:
The number of clock hours in the WFP program (150-599) ÷ the number of clock hours in the program’s academic year (900)
The number of weeks in the WFP program (eight to 15) ÷ the number of weeks in the program’s academic year (at least 30 for credit hour programs, at least 26 for clock-hour programs).
This means that a student with an SAI of 0 who is attending a WFP program that is eight weeks long and offers 160 clock hours would receive a WFP award of $1,315 because the proration amount based on clock hours (160/900=18%) is less than the proration
amount based on weeks (8/26=31%).
The technical formula is not important for NCAN members to understand (we shared it for all the wonks out there), but there are some repercussions of the formula that we want to underscore. First, because WFP grants will be prorated by the number of weeks
or clock hours in the program - and WFP programs cannot be more than 15 weeks and 599 clock hours - students will not be able to receive a WFP grant that’s more than 58% (15/26) of the maximum Pell. Assuming ED uses the formula above, WFP students
will not be able to receive a maximum Pell Grant for a WFP program.
Second, programs that are intensive but short – for example, eight hours a day for eight weeks – will be prorated based on the number of weeks, not hours in the program. Conversely, a program that’s 15 weeks long, but only meets 10 hours a week, will
be prorated based on hours. These guardrails will limit how much Pell short-term programs can award, and thus how much will be reduced from students’ LEU.
How will WFP factor into LEU?
As NCAN members know, students who are eligible for Pell Grants may use six years of Pell throughout their life. But WFP programs may not be delivered in the same units as the standard college semester and credit hours, which raises the question of how
WFP awards will be deducted from a students’ LEU. Students with equivalent SAIs may attend WFP programs of varying durations and clock hours, and ED will need to decide how those programs will be converted into equivalent units to calculate LEU.
We also wonder whether students will be able to use their entire LEU on WFP programs or whether there will be a cap or separate LEUs for the shorter programs. And finally, will students be advised of the impact on their LEU when they register for
a WFP program? That step seems important.
How will programs demonstrate that the credentials they offer are stackable to an associate or bachelor’s degree?
As noted above, another requirement in the statute is that programs must lead to other degrees or credentials and be portable to more than one employer. Excepted in the statute are programs that prepare students “for employment in an occupation where
there is only one recognized postsecondary credential.” But ensuring “stackability” and portability may be challenging. In some fields like health care, medical technician programs that set students up to train as nursing assistants are easy to imagine.
But what about commercial driver’s licenses or HVAC technicians? What test will states use to ensure that programs are stackable and how will they maintain a high bar so that the exception does not become the rule?
What process will states use to approve WFP programs?
States are in the driver’s seat, and the process they will use to decide which programs meet the requirements is up to them. Will they rely on pre-existing labor market lists or build new ones? The statute requires the programs to be aligned with in-demand industries, as determined by the state workforce boards. Which state agency/s will be responsible for developing the list of approved programs, and what process will
states go through to ensure its accuracy? How often will the lists be reviewed and updated? Should IHEs expect priorities to change every time a new governor, with different priorities, comes into office? We have a lot of questions about this process
that we hope will be addressed during the negotiated rulemaking process.
When will the first WFP students receive a grant?
Again, it’s hard to say with certainty but it might not be until the Spring of 2027.
These are certainly not the only questions we have, and we want to hear from you. What are you wondering about and preparing for as you learn more about how this program will be implemented in your state? Please reach out and share your thoughts and questions! As always, we’ll keep you posted as the process unfolds.
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