WASHINGTON -- Students who wanted to attend college, but didn’t have a high school diploma or GED, used to be able to get federal grants and loans through a back door: either take a basic skills test to prove their “ability to benefit” from a college education, or successfully complete six credits.
This year's federal budget, in an effort to trim spending on Pell Grants, shut off both routes. As of July 1, newly enrolled students are required to have a high school diploma or GED in order to receive federal financial aid. College administrators say they worry the new policy will shut out older students seeking training to find a new job, immigrants, and students in states where money for basic adult education has been cut in budget crises.
Either those students will turn to riskier private loans, they say, or -- more likely -- they'll just give up on pursuing higher education.
“This change is just very difficult to swallow,” said David Baime, vice president for government relations at the American Association of Community Colleges. “It runs counter to the missions of many of our colleges.”
The elimination of federal financial aid for college-bound high school dropouts was one of several cuts in the federal budget for fiscal year 2012 . Like many of the other changes, the cut hits especially hard at community colleges and for-profit colleges, which enroll more students based on an “ability to benefit” test than do traditional four-year colleges.
About 836,000 students at two-year public colleges nationwide don’t have a high school diploma or GED. That number includes high school students in dual enrollment programs, so the number of students admitted based on an “ability to benefit” test is smaller, about 82,000 students -- 1 percent of the community college population.
Little research is available on how students without a diploma or GED perform in college. Supporters of the "ability to benefit" clause cited a limited Education Department study conducted during the 2006-7 academic year . At the 14 colleges that participated in the experiment, students who failed the ability-to-benefit test, but went on to complete at least six college credits without financial aid, were ultimately more successful in college (measured in credit hours completed as well as grade-point averages) than were students who passed the ability-to-benefit test, and had higher GPAs than their classmates who were high school graduates.
A longitudinal study from the National Center for Education Statistics found that 67 percent of first-time college students in 2003 who had no high school diploma or GED failed to earn a college credential within six years. But students with a GED fared about the same: after six years, 66 percent had not earned a degree or certificate.
There is also some evidence that such students are more likely to default on their loans, and the Government Accountability Office and others have raised questions about abuse of the ability to benefit provision in the past. Two of the biggest providers of for-profit education -- Kaplan Inc. and Corinthian Colleges -- have stopped enrolling students on an "ability to benefit" basis in recent years, saying those students were more likely to drop out or default. A 2009 GAO report found that some colleges were helping students cheat on the test in order to obtain financial aid.
Many community colleges view enrolling students without a high school credential as part of their mission to provide access to higher education, Baime said.
College students without a diploma or GED are frequently unemployed or working low-wage jobs, and hope new skills -- and a college credential -- will help them improve their position in life, he said. It's a role for community colleges that policymakers have emphasized: President Obama proposed $8 billion for workforce training at two-year public colleges in his 2013 budget.
But if the would-be students have to get a GED before going to college, with no financial help available to them while they prepare, many will opt out altogether, Baime said.
One program aimed at students without diplomas or GEDs, the Integrated Basic Education and Skills Training Program in Washington State, has been widely studied and praised  as a way to help students who need remedial education. In that program, known as I-BEST, math, reading and writing skills are team-taught alongside technical training. Prospective nurses' aides learn math for measurements and medical vocabulary, while prospective truck drivers, many of whom are immigrant farm workers, learn English vocabulary in the context of the commercial driver’s licensing exam.
Many of the 5,000 students in the program are high school dropouts or immigrants who never attended high school, said Jan Yoshiwara, director of education services at the Washington State Board for Community and Technical Colleges.
“They’re not people who would see any value in going back to get a high school diploma,” Yoshiwara said, adding that the students are unlikely to stay out of the labor force long enough to earn both a GED and a college credential. “They’re people who are intent on getting job skills to get a better job to support their family.”
The colleges are exploring other ways to help these students pay for their education, Yoshiwara said. Without Pell Grants or federally subsidized loans, private loans would be students' only recourse, and many of the students in the state's 120 I-BEST programs are likely to drop out.
"Our colleges are very concerned that this is a big step backwards for our acceleration efforts for this population," she said.
In other states, students who are willing to pursue a GED might not be able to find a class to help. In California, the end of the “ability to benefit” test for financial aid has coincided with less money for adult education, as many school districts have used money that used to pay for GED classes to shore up elementary and secondary education.
Tuition for a state-run GED class is $120, which could be a financial barrier on its own, said Tim Bonnel, coordinator of student financial assistance programs for the California Community College system. But an even bigger problem is finding a class to enroll in: many districts have eliminated GED classes altogether, Bonnel said. Twelve of the state’s 112 community colleges offer the classes, which require state approval.
“This is a population that should be able to turn to us for support and for a host of reasons, that’s going to be a very big challenge,” Bonnel said.
Many for-profit colleges also still enroll students without diplomas, and the new regulation has caused concern, said Steve Gunderson, president of the Association of Private Sector Colleges and Universities.
“We recognize the budget constraints,” Gunderson said, adding that he thought community colleges were facing more problems under the new rule than for-profit colleges. “We also recognize that some of these students with proper pre-testing clearly to do have an ability to benefit, and without access, have no opportunity.”
Concern is most acute in Puerto Rico, where dropout rates are high and where a substantial proportion of the adult population has no high school degree, he said.
College leaders are lobbying for a change in the regulations, although their July 1 effective date is looming. Some colleges are also trying to marshal institutional resources to help students without diplomas and GEDs.
“We are trying to figure out how to fund these students who need financial aid in order to enroll,” said Yoshiwara, of Washington State. “Most of our colleges are not willing to tell the students, ‘I’m sorry, you can’t come if you don’t have the money.’ ”