Bipartisan Bill May Finally Approve Short-Term Pell Grants

The Bipartisan Workforce Pell Act is the latest in a long list of attempts by lawmakers to pass a short-term Pell proposal.
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Updated on December 19, 2023
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  • Lawmakers on both sides of the aisle have attempted to pass a bill authorizing Pell Grant use for short-term workforce programs.
  • The Bipartisan Workforce Pell Act may be the best shot yet at actually doing so.
  • This proposal enjoys support from the two highest-ranking members of the House Education and the Workforce Committee.
  • It would allow students to receive a Pell Grant for a program as short as eight weeks.

Students may soon be able to use Pell Grants to help pay for short-term workforce programs at U.S. colleges and universities.

The Bipartisan Workforce Pell Act is the latest in a long list of attempts by lawmakers to pass a short-term Pell proposal. It may also be the most likely of all short-term Pell Grant bills to actually pass, thanks to some of the bill's original co-sponsors.

Education and the Workforce Committee Chairwoman Rep. Virginia Foxx of North Carolina, a Republican, and the committee's ranking member, Rep. Robert Scott of Virginia, a Democrat, are both co-sponsors of the bill. Rep. Elise Stefanik, chair of the House Republican Conference, is also a co-sponsor.

This lineup of backers all but ensures the proposal will pass through the House Education and the Workforce Committee.

Lawmakers have long tried to pass some form of a Pell Grant expansion to cover workforce training programs as short as eight weeks. Current policy states that students may only receive a Pell Grant if their program lasts at least 15 weeks.

The Bipartisan Workforce Pell Act would lower that requirement to eight weeks.

Currently, you cannot use a Pell Grant for short-term training programs, like IT or welding courses, Scott said in a statement. As a result, many adults cannot afford to attend or complete courses that will help them get good-paying jobs and compete in the modern economy. This is a disservice to our students, workers, and employers.

However, the bill comes with some guardrails to ensure these programs actually benefit students. For an institution to distribute Pell Grants to students for short-term programs, those programs must:

  • Have a completion rate of at least 70%, within 150% of the expected time to completion
  • Have a job placement rate of at least 70%, measured 180 days after completion
  • Lead to median earnings above that of the median high school graduate wage in at least two of the past three years
  • Provide positive return on investment (ROI), as determined by the Department of Education (ED)

ED will measure ROI by subtracting 150% of the federal poverty guideline from the median earning of graduates one year after completion of the program. If that figure is above the required tuition and fees for the program, then it passes the department's ROI test.

For example, if a program leads to a median salary of $33,870, ED would subtract 150% of the poverty guideline ($21,870) from that figure, which gives ED $12,000. That means tuition and fees for the workforce program must be below $12,000 in order for it to qualify for Pell Grants.

Lawmakers say programs must also provide education aligned with high-skill, high-wage, or in-demand industry sectors or occupations, according to a bill summary.

America has always been a skills-based economy, so it's critical that we retool the Pell Grant to match the education needs of both students and employers, Foxx said in a statement. The Bipartisan Workforce Pell Act achieves this goal by elevating skills-based programs, investing in upskilling, and promoting an education model tailored to workforce needs.

If passed, students may begin to receive Pell Grants for short-term programs beginning with the 2025-26 academic year.

The Bipartisan Workforce Pell Act sets aside $40 million to implement these changes in 2025 and $30 million annually for four additional years.

That’s not the only proposed way to help pay for the bill.

The Bipartisan Workforce Pell Act would also prohibit the wealthiest institutions subject to an endowment tax from distributing federal student loans to students. The move would save money to help pay for the proposal, but advocates say it may coerce low- and middle-income students attending institutions like Harvard University to take out private loans.

Private loans tend to have higher interest rates than federal student loans.

Lawmakers from both parties expressed concern about this offset, so this language may be removed before legislators vote on the bill.