On May 22, the U.S. Department of Education released important institutional guidance on student eligibility for Pell Grants and other student financial aid. Through the Higher Education Act’s “Ability to Benefit” (ATB) provision, federal student aid will be provided to students who do not have a high school diploma or equivalent if they participate in eligible career pathway programs. In the letter, the Department defines an “eligible” career pathway program and addresses participating students’ eligibility for Title IV student financial aid.

The Department also defines “adult education” in a career pathway as qualified activities under the Workforce Innovation and Opportunity Act (WIOA) Title II Adult Education & Family Literacy Act. Its description of eligible career pathway programs maps to the integrated education and training definition in WIOA section 203(11), which defines a career pathway strategy as inclusive of foundational skill-building and workforce training.

However, the letter also restates that Title IV student aid funds cannot be used for adult education; they can only be used for postsecondary-based remediation. This postsecondary-based remediation is not required to be contextualized or concurrent or to follow the integrated education training model. Disconnected remediation is part of an outdated two-track system that is less effective than a model providing basic skills and college-level coursework in context together. CLASP encourages institutions to continue building integrated education and training models.

The letter reconfirms that students who have passed the ATB test and are participating in an eligible career pathway program that they enrolled in prior to July 1, 2014 may be awarded a Pell Grant or any other Title IV aid beginning with the 2014-2015 award year. A student who meets these standards on or after July 1, 2014 may be awarded this aid “beginning with the payment period in which the student meets the ATB alternative.” The letter only alludes to “retroactive implementation” of these provisions; it does not detail how institutions would engage in that activity.

Prior to July 1, 2012, the ATB provision allowed students who did not have a high school diploma or GED or who were home schooled to access Federal student financial aid by passing a test or completing six (6) postsecondary credits. The Consolidated Appropriations Act for Fiscal Year 2012 eliminated this provision. However, the Consolidated and Further Continuing Appropriations Act for Fiscal Year 2015 partially restored student eligibility under ATB by allowing students who enrolled in an “eligible career pathway program” on or after July 1, 2014 to take an ATB test.

Despite this positive development, there are also limitations. While those students who enrolled on or after July 1, 2014 and before July 1, 2015 are eligible for the full Pell award (set at $5,730 in award year 2014-15), those who enroll on or after July 1, 2015 will only be eligible for the discretionary portion of the award ($4,860). Institutions should note that the Department released alternative disbursement schedules as a result of this circumstance. Those schedules can be found in the same location as the guidance letter.