ATB Mysteries Revealed: ED Issues Guidance on the New “Ability to Benefit” Rule

On May 22, the U.S. Department of Education distributed a letter outlining the Consolidated and Further Continuing Appropriations Act of 2015, enacted in December 2014. These changes reinstate past provisions in the Higher Education Act (HEA) allowing students with no high school or high school equivalency credential to access Title IV aid through an “ability to benefit” (ATB) alternative and enrolling in an eligible career pathways program. Below, I will discuss three key takeaways from ED’s letter: changes in eligibility for individual student aid, changes to the formula determining Pell Grant aid through the ATB/career pathway program provision, and duration of ATB status.

“Ability to benefit” alternatives can consist of passing an ED-approved placement exam, earning six credit hours or 225 clock hours in an approved postsecondary program, or successfully completing a state process approved by the Secretary of Education. (The letter notes that no state has put forward such a process for approval at this time.) These alternative measures of determining eligibility were used as a means of providing access to Title IV funds for students without a high school diploma, recognized alternative, or homeschool credential prior to July 1, 2012, at which point changes in HEA removed the possibility of using them to access Title IV aid. Reinstating ATB provisions will clear the way for students whose secondary education was interrupted for any number of reasons to pursue meaningful postsecondary credentials.

However, reinstating the use of approved ATB measures as a means of determining Title IV aid eligibility will not return everything to its pre-2012 state. Changes dictate that students who first register for eligible career pathways programs on or after July 1, 2015 and are eligible for Title IV aid through ATB will receive their awards based on the Career Pathway Alternative Pell Grant Disbursement Schedule. Such students will have access to a Limited Pell Grant, with a maximum amount of $4,860, compared to Regular Pell Grant maximum of $5,775. This difference is explained by funding sources for the Pell program. Some funding for Pell Grants is mandatory, while the remainder comes from discretionary appropriation. The maximum Limited Pell Grant is the portion of the maximum Regular Pell Grant covered by discretionary appropriation. ED’s letter makes clear that students who enter a career pathways program through ATB on or after July 1, 2015 will remain eligible for Limited Pell Grants after the 2015-2016 year as they continue in their program.

A significant body of evidence supports using ATB alternatives to determine eligibility as a means of tracking students toward a postsecondary credential, giving reason to celebrate increased access driven by a practice with a history of success. However, one question lingered after reading ED’s letter: when does an ATB student stop being an ATB student? Does this status follow the student from their career pathway program to an associate’s program or beyond? After following up with ED about this question, we learned that there are a few ways an ATB student could shed that classification and, thus, be considered for a full Regular Pell Grant. Students can earn a high school diploma or recognized equivalent as defined in 34 CFR 600.2. Alternatively, the student can complete a two-year program, which includes any associate degree, or 60 semester credit hours (or the quarterly credit equivalent) toward a degree. Accessing Title IV funds can be critical for a prospective student with limited financial means, and it appears that using ATB alternatives to enter a career pathway program and then shedding the ATB designation as quickly as possible would alleviate yet more of the cost of pursuing the education needed for upward socioeconomic mobility."