Ability to Benefit, Again?

Community colleges gain traction in push to reinstate federal aid for students without a high school diploma, less so for bringing back "summer Pell."

October 22, 2014

A bipartisan group of federal lawmakers wants to bring back financial aid for college students who do not hold a high school diploma or its equivalent, like a GED.

The U.S. Congress eliminated aid eligibility for these so-called “ability to benefit” students in 2012. The motivation was to rein in spending on Pell Grants, and the cut was easier to make, politically, than other trims. Another reason was that regulation-minded Democrats wanted to crack down on for-profits, which enrolled a substantial portion of this group of students.

An additional victim of the budget chopping block that year was year-round Pell Grants. For three years prior to 2012, students could receive two of the grants per year, to help pay for summer courses.

Advocates for community colleges at the time argued unsuccessfully that Congress was hurting their students with the two cuts. But they lacked the clout to stop the changes, and some observers said other higher education associations didn’t lend much support to their cause.

Now the politics appear to be shifting, at least around ability-to-benefit students.

Senate Democrats, led by Patty Murray of Washington, have inserted a proposal to mostly restore aid for ability-to-benefit students as part of draft language for the reauthorization of the Higher Education Act, the law that governs federal aid programs. Sen. Tom Harkin, the Iowa Democrat who chairs the Health, Education, Labor and Pensions Committee, is author of the draft.

In addition, two Republican Congressmen, Chris Gibson of New York and Peter Roskam of Illinois, wrote letters this year supporting the provision’s return. They landed signatures from Congressional Democrats and a couple of their fellow Republicans.

Harkin also included language to bring back yearlong or “summer” Pell Grants. However, the proposal would limit aid eligibility to full-time students. That irks community college leaders, who said their institutions enroll many part-time students who need the aid.

In a letter to Harkin, the American Association of Community Colleges (AACC) and the Association of Community College Trustees (ACCT) said they were encouraged to see the reinstatement of summer Pell, but were “dismayed” by the limitation of the proposal.

“Expecting all students -- particularly the low- and moderate-income students who receive Pell Grants -- to be able to attend full time during the summer is equally as unrealistic as the anachronism of a bygone agricultural era where students take ‘summers off,’ ” the groups wrote.

The provision for ability-to-benefit aid is also slimmed down from its previous iteration. It would limit eligibility to students who enroll in “career pathways programs.”

However, ability-to-benefit students typically enroll in career-oriented tracks anyway, said David Baime, AACC’s senior vice president for government relations and policy analysis. As a result, both community college groups back the Murray language.

The Higher Education Act is probably years away from being renewed. But observers said the ability-to-benefit language has a decent chance of being inserted as a stand-alone inclusion in a federal spending bill before the reauthorization of the Higher Education Act.

Summer Pell probably faces longer odds, they said, even in its full-time-only form.

Projected Costs

Prior to the 2012 cuts, students who lacked a high school credential could prove their “ability to benefit” from college by passing a general skills test before they enrolled. Students could also qualify for aid under the provision by first completing six credits of college-level courses.

Questions about the legitimacy of the tests and about fraud, particularly at some for-profits, helped hasten the demise of ability to benefit.

A Congressional analysis from 2008 found that less than 1 percent of all Pell Grant recipients -- about 43,000 students -- had taken and passed an ability-to-benefit test, according to an ACCT breakdown of the data. Most of those students likely attended community colleges. The elimination of this aid eligibility saved an estimated $46 million in Pell spending this year and would save $164 million total by 2016, the Congressional analysis found. (The elimination of summer Pell should save an estimated $428 million by 2016.)

Much of the impact of the end of ability to benefit was felt in California, according to the state’s community college system. The year before the cut, about 19,000 California community college students without a high school credential sought federal financial aid, according to a 2013 written statement from the system and the California Association of Student Financial Aid Administrators.

“Economizing by closing the door on the neediest individuals who stand to gain the most from some career-specific postsecondary training just does not make policy, political or economic sense,” according to the statement.

Bringing the ability-to-benefit provision back as a career-pathway only aid package would cost roughly $31 million per year, according to a 2012 Congressional estimate (maximum Pell awards are larger now). Those costs would rise, however, and would hit a total of about $300 million by 2022.

Even so, Congress might be able to stomach the new spending, observers said.

“The cost of this provision is small enough that it may be able to be included in a spending bill,” said Jee Hang Lee, ACCT’s vice president for public policy and external relations.

Several large for-profits, including Kaplan Inc. and Corinthian Colleges, got out of the ability-to-benefit market before the cuts occurred. It seems unlikely that those institutions would go back to serving ability-to-benefit students -- particularly Corinthian, the imploding for-profit chain where 35 percent of students came from households with incomes under $10,000.

Even so, for-profits enroll a decent number of students without high school credentials. The Association of Private Sector Colleges and Universities said 1.8 percent of its membership’s total enrollment fall into this category. That’s down from 2.3 percent before the federal aid was eliminated.

The for-profit association supports Harkin’s draft language to reinstate ability-to-benefit aid, said a spokesman for the group. But it called on Congress to extend eligibility to “any program a student chooses, rather than limiting it to the narrowly defined ‘eligible career pathway programs.’ ”

Community colleges appear to be the primary force for bringing the aid back. Washington State, which Senator Murray represents, was among the states besides California that were affected the most.

The cuts were also felt in Texas. For example, it had a negative impact on San Jacinto College, said Teri Crawford, a spokeswoman for the college. But she said those effects are hard to quantify.

The end of ability-to-benefit also led to a new wrinkle for Texas community colleges. Since a high school diploma is now a requirement for getting federal aid, the state’s attorney general, Greg Abbott, who might become the next governor of Texas, has warned about an increasing risk of students using false credentials from bogus high schools, or diploma mills.

In August, Abbott’s office shut down the Houston-based Lincoln Academy, which falsely claimed to be accredited and issued high school credentials. In a statement, Abbott pushed for the state’s community colleges and four-year institutions to “be diligent in reviewing purported high school transcripts issued by entities that may be more interested in amassing profits than preparing students for higher education.”


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