Support Grows for Major Shift in Pell

Bipartisan support builds for expanding Pell Grant eligibility to short-term certificates, although some experts worry about quality control and funding.

July 10, 2017
 
Senator Rob Portman, Ohio Republican

Bipartisan support is building for federal legislation that would make Pell Grants available to students who are pursuing short-term certificates.

Under current law, the major federal grants for low-income students cannot be used to pay for academic programs that are shorter than 600 clock hours or 15 weeks in length. But a bill introduced in January by Senator Rob Portman, an Ohio Republican, and Senator Tim Kaine, a Virginia Democrat, would expand Pell eligibility to shorter job-training programs, with a minimum cutoff of 150 clock hours of instruction time over a period of at least eight weeks.

Anthony Carnevale, a research professor and director of Georgetown University’s Center on Education and the Workforce, said the bill is part of a long-term shift toward using public funds for job-related training.

“This is inevitable,” he said. “We’re not clear how they’re going to do it, but it’s going to happen.”

The proposed legislation includes quality-control standards aimed at ensuring the resulting credentials are recognized by employers and have value in the job market. A broad array of business and higher education groups back the bill, including the Business Roundtable, the National Skills Coalition, Jobs for the Future, the Center for Law and Social Policy (CLASP), Young Invincibles, and the Association of Career and Technical Education.

“From the student perspective, it makes no sense that these programs don’t qualify for financial aid,” said Kermit Kaleba, federal policy director for the National Skills Coalition.

Community colleges generally like the idea. The American Association of Community Colleges, which supports short-term Pell Grants, said roughly a quarter of all credentials community colleges issued in 2015 were for certificate programs of less than one year.

“We’re optimistic that Congress appreciates the importance of these programs on our campuses,” said David Baime, AACC’s senior vice president for government relations and policy analysis.

Republican leaders of congressional education committees are focused on the Higher Education Act, saying action on bills affecting higher education will occur in the run-up to reauthorizing HEA, which is the law that oversees federal aid.

Yet reauthorization isn’t happening any time soon -- 2018 is probably too optimistic. Some observers speculate that congressional Republicans may pivot later this year and, seeking to have some legislative successes on higher education, could try to advance several bills with broad support.

Portman and Kaine’s so-called JOBS Act would be one of the likeliest bills to get the nod under this scenario, in addition to one seeking to simplify the Free Application for Federal Student Aid and, perhaps, legislation to create a demonstration project on competency-based education. A bill to drop the federal ban on student-level records also has bipartisan backing.

A key reason for the interest in short-term Pell Grants, said Dane Linn, vice president for the Business Roundtable who oversees the group’s education and work force committee, is that the “message is finally getting through” that not all jobs require four-year degrees.

Linn said the JOBS act would help people, including adult and low-income students, to get the training they need for jobs that are open.

“This bill has to move before we can get the Higher Education Act approved,” he said. “We can’t wait until the process completes.”

Concerns About Quality Control and Funding

The idea of expanding Pell Grants to short-term certificate programs isn’t new. The Clinton administration, for example, considered creating “skills grants” for this purpose that the U.S. Department of Labor would have distributed.

Even so, the JOBS Act makes some student advocates and higher education experts nervous. Their worries include funding, data and quality control.

The initial money for this expansion of Pell almost certainly would come from the program’s $10.6 billion surplus, a rainy-day fund many student advocates want preserved.

However, congressional Republicans and the Trump administration have made clear that they would like to draw down a substantial portion of the Pell surplus. And student advocates say privately that they would rather the money go to low-income students in short-term training programs than see it be used to pay for tax cuts or defense spending.

Yet expanding Pell to short-term programs is more controversial than bringing back so-called year-round grants, which Congress did in this year’s budget. And since the Congressional Budget Office has yet to conduct a financial scoring of the JOBS Act, its estimated costs remain unclear.

AACC has proposed opening up 2 percent of Pell’s annual expenditures to high-quality, short-term certificate programs. At current funding levels, such a move would come with a relatively manageable annual price tag of $600 million.

However, if the JOBS Act were to pass and eventually generate costs that run into the billions of dollars, it could lead to discussions about lowering the maximum Pell award amount (currently $5,920) to pay for the expansion. That would almost certainly provoke fiery opposition from private college groups.

While supporters of the bill applaud its efforts to ensure quality control, several said available data are lacking for the creation of a confidence-inspiring accountability system.

Research by Carnevale’s center generally has found labor-market value in short-term certificates. But federal data are inadequate for measuring the value of these credentials, a wide range of experts agrees. And while Carnevale said there is no evidence that the one-year mark is the cutoff for a valuable certificate, there is broad variation in the earnings bump that short-term credentials can provide.

New America has struck a cautious note on using Pell for short-term certificates. The group worries that relaxing time-based eligibility requirements -- which were set based on historical experience -- could open the door to “unscrupulous” institutions that would create low-value programs to tap into the new federal money.

“Do we trust that consumer protections in this bill will hold?” said Mary Alice McCarthy, director of New America’s Center on Education and Skills and a former official at the Labor and Education Departments.

The proposed legislation would use program eligibility standards that apply under the Workforce Innovation and Opportunity Act. That federal law requires meaningful career counseling and the alignment of training programs to in-demand career pathways, among other standards.

The use of WIOA requirements is as good step, said McCarthy and other advocates. But she doubts federal data sets about the programs will be strong enough to keep tabs on quality, particularly at for-profit colleges, which tend to charge more in tuition than community colleges. Students could burn through their Pell eligibility and have little to show for a short-term certificate, she said, without federal data to hold programs accountable on measures such as graduates’ earnings and job placement rates.

“It’s hard for me to see that there’s enough there,” she said.

Another way for the feds to help ensure that students benefit from short-term programs is to encourage colleges to make the certificates “stackable,” meaning that the credits are designed to count toward degrees. Jobs for the Future, for example, has said that Pell-eligible short-term programs must be stackable and part of the path to a degree.

Carrie Warick is director of policy and advocacy for the National College Access Network, which has not taken an official position on the JOBS Act. She agrees with other experts that short-term certificates should be stackable. And Warick said the right way to view such credentials, particularly for traditional-age students, is as part of “two plan A’s” -- meaning simultaneously pursued pathways to a high-value certificate and, eventually, to a college degree.

The alternative, she said, is an unacceptable form of separate but unequal in higher education.

“I’m very nervous about the idea of low-income students getting sent to middle-skills jobs and high-income students getting sent to a four-year college to find themselves,” said Warick.

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