Pell grants are the main source of federal grant aid for undergraduate students, and there has long been bipartisan interest in offering Pell grant aid to students attending short-term workforce training programs. But there are concerns about supporting low-value programs that do not pay off for students or taxpayers if Pell grant aid is extended to these programs, which do not meet Pell’s current minimum program length requirement.
The Promoting Employment and Lifelong Learning (PELL) Act, a new bill introduced by House Republicans, aims to address these concerns by implementing an economic value test that sets a high bar for short-term program participation in Pell, with only one in five students in these programs able to access Pell grants. To qualify for Workforce Pell grants, newly eligible programs would have to offer 150 to 600 clock hours of instruction, take place over 8 to 15 weeks, and charge no more in total tuition and fees than their “economic value,” which is measured as the amount by which median earnings three years after completion exceed 150 percent of the federal poverty level.
Requiring short-term programs to pass an economic value test is meant to alleviate concerns about supporting low-payoff programs, but how tough is the PELL Act’s proposed test likely to be in practice?
Using 2015 tuition data and earnings data for the pooled 2014–15 and 2015–16 cohort of completers for vocational undergraduate certificate programs, they show the following:
- Seventy-nine percent of vocational certificate programs would not be able to pass the economic value requirement included in the PELL Act and would not gain access to Workforce Pell grants.
- Just 8 percent of programs at private for-profit institutions, which compose 80 percent of the programs analyzed, would pass this test, while 81 percent of programs at public institutions—mainly community colleges—would pass.
- Data on the most prevalent programs show nearly all cosmetology programs (99 percent) and most allied health and medical assisting programs (88 percent), which are primarily offered at private for-profit institutions, would fail the economic value test. Two-thirds of practical and vocational nursing programs, more than half of which are offered at community colleges, would pass.
- Eighty-eight percentof women completing vocational certificates were enrolled in programs that would fail the economic value test, compared with 57 percent of men.
- Asian and Native Hawaiian or other Pacific Islander students were the most likely to attend programs that would fail the test.
The eligibility requirement for economic value included in the PELL Act would allow few students to access these grants and would limit access more for women than for men. Although lowering the threshold required to pass could allow more programs to gain eligibility for Pell grants, it would still result in large gender disparities in Pell access and could allow more low-payoff programs to access Pell grants.
An economic mobility measure that compares students’ earnings before enrolling in the program with their postcompletion earnings could more accurately assess programs’ financial value. Under a mobility measure, programs would be evaluated based on how much they improve their own students’ earnings, which would also reduce the effect of labor market discrimination and pay inequality on whether a program has access to Workforce Pell grants.
As Congress continues to consider guardrails for Workforce Pell grants while the US Department of Education develops its gainful employment rule, it may make more sense for policymakers to require short-term programs of less than 15 weeks pass the same outcomes test as vocational programs already eligible for Pell grants. Developing consistent eligibility requirements would hold each program to the same standard and prevent programs from manipulating their length requirements to be held to a different quality assurance standard.
Get the Data
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