Department of Education Clarifies Financial Aid Provision that Helps Low-Income Students

On October 22, the U.S. Department of Education (ED) responded to concerns and recommendations from institutions and advocates, including CLASP, about implementing the Ability to Benefit (ATB) provision.  ATB, partially restored last year after being cut in 2011, provides an important entry point into higher education for low-skilled adults. It allows federal financial aid for students who lack a high school diploma or equivalent but can prove their ability to benefit from college by successfully completing six credits or passing an exam while enrolled in a career pathway program. However, many higher education institutions have progressed slowly in making this promise a reality for the students who need it.

ED issued a questions and answers document covering the most common questions from institutions, including several that address the initial obstacles colleges will face as they use the revised 2014 ATB provision to offer financial aid to students in an eligible career pathway program. (This document expands on guidance provided by ED on May 22.)

An eligible career pathway program must meet all the requirements listed in section 484(d)(2) of the Higher Education Act, as well as be “developed and implemented in collaboration with partners in business, workforce development, and economic development” and aligned with the needs of the local area. Institutions must document how the program meets each of these requirements.

Additionally, an eligible career pathway must offer two concurrent components—one in adult education and another in title IV-eligible postsecondary education. These components must also be contextually aligned. A student must remain enrolled in both components while in the career pathway in order to be eligible for federal title IV financial aid under ATB. However, ED explains that it’s permissible for a student to be enrolled in only one component in a payment period; for instance, if no adult education courses were offered in the summer term, the student would not lose eligibility by only enrolling in the title IV-eligible component at that time.

The program does not need to be approved by ED, the state, or an accrediting agency; however, institutions must follow any state laws or regulations around career pathways. ED does not have, and will not be developing, an approval process for career pathway programs. Significantly, the guidance notes that if ED performs a program review or audit of the career pathway program, they “will consider whether the institution made a good faith effort to comply” with these provisions.

The ED question-and-answer document also addresses more technical questions around requirements of the adult education component, remedial coursework, calculating cost of attendance, and when a student becomes eligible for the full Pell (instead of the ATB-required reduced Pell) award.

CLASP appreciates the effort by ED to respond to our call for additional resources, and we urge institutions to use this information to take immediate action in making ATB available to eligible students. This release from ED has been added to our ATB Resource page. Consider bookmarking this page, as it is periodically updated with all the latest developments and examples of action that institutions and states have taken to provide this resource to students.

To continue the discussion on how institutions can implement ATB, please consider attending our November 9 webinar with Jobs for the Future.