Workforce Pell: What You Need to Know

For the first time in decades, Congress has expanded the Pell Grant program in a way that could reshape higher education. With the passage of Workforce Pell—sometimes called short-term Pell—federal grant aid is now available to students in very-short, career-focused job training programs, including non-credit offerings as brief as eight weeks. This is a sea change in federal student aid. Only two other instances of expansion have been so significant: when Pell and loans were extended to for-profit colleges and then to fully online programs,

Workforce Pell opens the door to a new category of education: programs straddling the worlds of workforce training and higher education. If implemented well, this policy could provide students with new, debt-free pathways into good jobs and help states meet urgent workforce needs. But the specifics of implementation will be the key to success. That’s why today, New America is announcing our new line of work to support effective, equitable implementation of Workforce Pell. We’ll be working with federal agencies, governors, state policymakers, and colleges to ensure this expansion results in high-quality programs that lead to meaningful employment and upward mobility—not another cycle of low-value credentials and wasted taxpayer dollars.

Although the ink is barely dry on this legislation, implementation will move quickly. The law takes effect in July 2026, meaning federal rulemaking, state approvals, and institutional changes will all be underway soon. Stakeholders across the higher education and workforce communities are already raising important questions. The following sections outline many of the questions that stakeholders need to understand as we look toward the future of Workforce Pell.

Programs must provide at least 150 but less than 600 clock hours of instruction during a minimum of 8 weeks, but less than 15 weeks, and be aligned with high-skill, high-wage, or in-demand occupations as defined by the state. Eligible programs must be offered by Title IV–eligible institutions of higher education and approved by the governor (or their designee).

Crucially, programs must be designed so that students can articulate into at least one credit-bearing pathway. This ensures that Workforce Pell programs are not educational dead ends but stepping stones to further credentials and degrees. This design feature connects short-term job training to the broader higher education ecosystem—something many state and federal workforce programs have struggled to achieve in the past.

Under the law, programs must meet a value-added earnings requirement—an accountability measure that aims to ensure Workforce Pell dollars only support programs that yield earnings that justify the cost of the program. The published tuition and fees for Workforce Pell programs cannot exceed the “value-added earnings” of those completers who received federal student aid. The value-added earnings are defined as the median earnings of graduates minus 150 percent of the federal poverty line, measured three years after completion. The earnings are adjusted by the state and metropolitan area regional price parities of the Bureau of Economic Analysis based on the location of the program.

To understand how this will work, we can look at two examples of hypothetical programs. For both hypothetical programs, we will assume the published tuition and fees and the median earnings of completers are the same. We will use 2023 data for both the regional price parities and the federal poverty guidelines.

Published Tuition & Fees: $3,000
Median Completer Earnings: $25,000
150% of the federal poverty guidelines for a household of 1: $21,870

Program 1: Located in Owensboro, Kentucky (RPP=90)
Earnings Adjusted for Regional Price Parities: $25,000 / (90/100) = $27,778
Value-Added Earnings: $27,778 - $21,870 = $5,908

Because the Value-Added Earnings exceed the published tuition and fees, Program 1 passes.

Program 2: Located in a non-metropolitan area of Colorado (CO RPP=101.4)
Earnings Adjusted for Regional Price Parities: $25,000/ (101.4/100) = $24,655
Value-Added Earnings: $24,655 - $21,870 = $2,785

Because the Value-Added Earnings are less than the published tuition and fees, Program 1 fails.

The law requires that programs show both a 70 percent completion rate and a 70 percent job placement rate. Completion is measured within 150 percent of the normal time for completion of the program. Job placement is measured 180 days after completion. While the statute itself does not define how these rates should be calculated, Congress borrowed this requirement from a long-standing provision of the Higher Education Act governing short-term programs that access federal student loans. Specifically, programs between 300 and 599 clock hours in length, offered over 10 to 15 weeks, have been subject to the same thresholds for more than three decades under 20 U.S.C. § 1088(b)(2).

It is too soon to know how the Department will approach this in its rulemaking, but it has already codified detailed rules in 34 C.F.R. § 668.8(e)–(g): subsection (e) defines the procedures for determining whether a program meets the completion and placement requirements overall; subsection (f) specifies how completion rates must be calculated; and subsection (g) sets out how job placement rates must be measured. Moreover, the December 21, 2023, electronic announcement (GEN-23-121) reminded institutions that certain institutional and program eligibility calculations—including those for completion and placement rates—must be substantiated by an independent auditor, and that institutions are expected to retain auditable records consistent with the regulations and the Federal Student Aid (FSA) Handbook.

It depends—primarily on the program’s length and the student’s financial need. Like the traditional Pell Grant, Workforce Pell awards will be prorated based on program length, but because these programs are shorter than a traditional academic year, students will receive a proportion of the full Pell amount rather than the full award.

The U.S. Department of Education uses a standardized formula to calculate these amounts, comparing two ratios:

1. Weeks of instructional time ÷ 24 (the standard for a full academic year), and
2. Clock hours ÷ 900 (the standard for a full-time annual clock-hour program).

The lower of these two ratios is then multiplied by the student’s Pell Grant eligibility (which depends on their Student Aid Index). The result, rounded to the nearest $5, determines the student’s Workforce Pell award. See the Department’s Pell Formula Guide for details.

Let’s walk through two examples: one for a longer short-term program and one for a shorter one. (For simplicity, the award amounts are already rounded to the nearest $5.)

Example 1: A 14-Week, 599 Clock-Hour Program

Weeks ratio = 14 ÷ 24 = 0.583

Clock-hour ratio = 599 ÷ 900 = 0.67

Lower ratio: 0.583

• Maximum Pell: $7,395 × 0.625 = $4,310
• Minimum Pell: $740 × 0.625 = $430

So for this kind of program, Workforce Pell Grants could cover between $430 and $4,310, depending on the student’s financial need.

Example 2: An 8-Week, 150 Clock-Hour Program

Weeks ratio = 8 ÷ 24 = 0.33

Clock-hour ratio = 150 ÷ 900 = 0.17

Lower ratio: 0.17

• Maximum Pell: $7,395 × 0.17 = $1,260
• Minimum Pell: $740 × 0.17 = $125

For a program like this, eligible students could receive between $125 and $1,260 in Pell Grant aid.

Taken together, this means that Workforce Pell can reduce costs for students pursuing shorter, career-focused credentials—but the benefit will vary widely depending on the structure of the program and each student’s financial profile.

The U.S. Department of Education must now undergo negotiated rulemaking to establish detailed definitions, eligibility criteria, and administrative processes for the Workforce Pell program.

The Department began this process earlier in 2025 by holding public hearings and inviting written comments. The negotiated rulemaking committee—which will include stakeholders from higher education, workforce, and student groups—will convene for two week-long sessions in December and January.

After negotiations conclude, the Department will issue a Notice of Proposed Rulemaking (NPRM), followed by a public comment period (typically 30 days). It will then review those comments, make any revisions, and publish a final rule.

Because the negotiations are beginning after November 1, the Department will miss the so-called “master calendar” deadline, which means the rules will not automatically take effect until July 1, 2027. However, the Department has the authority to early implement the rules, allowing institutions and states to proceed in time for the July 1, 2026, statutory start date.

Governors will play a central role in approving Workforce Pell programs, but the timeline is tight. Since federal rules won’t be finalized for some time, states must begin laying the groundwork now.

Here’s what that means in practice:

• Evaluate existing data infrastructure. States should evaluate what data they have and begin developing (if not already developed) comprehensive data systems that capture information on all postsecondary programs, including noncredit and short-term programs. These data should also be connected to labor market outcomes. Without integrated data, states can’t evaluate outcomes or make informed approval decisions around things such as what is considered “high-wage.”
• Align workforce and higher education systems. Governors should work closely with their State Higher Education Executive Officers (SHEEOs)/state authorizers and state workforce boards to design a cohesive approval process. SHEEO agencies/state authorizers, which already oversee academic program approvals and interact with the U.S. Department of Education and FSA, bring critical expertise to the table and should be the ones to oversee the approval process at the state level.
• Conduct robust labor market analyses. States should identify the industries and occupations with the highest demand, the greatest wage potential, and the strongest need for skilled workers. These analyses will guide which short-term programs qualify as “high-skill, high-wage, and in-demand.”
• Update and align existing plans. States can integrate Workforce Pell planning into Perkins V and Workforce Innovation and Opportunity Act (WIOA) frameworks to streamline resources and reduce duplication.

This is an opportunity for states to modernize and align their education and workforce systems—building the infrastructure needed to ensure that Workforce Pell programs lead to real economic opportunity.

Colleges—especially community colleges—should begin assessing their non-credit and short-term offerings to determine which could qualify for Workforce Pell.

Key priorities should include:

• Working to ensure non-credit programs articulate into credit-bearing pathways. Institutions may need to revise curricula, create stackable credentials, and establish systems for prior learning assessment.
• Working with the college’s financial aid office to begin to establish processes for non-credit programs and the new Workforce Pell program because non-credit programs are not usually integrated into the traditional financial aid systems and processes.
• Building data capacity to track student outcomes such as completion rates, job placement, and further credit and credential attainment. These metrics are likely to be central to both state approval processes and the accountability measures programs are required to meet for continued eligibility.
• Aligning with industry needs by partnering with employers, workforce boards, and sector partnerships to ensure programs prepare students for real jobs with family-sustaining wages.

Early preparation will position colleges to act quickly once federal rules and state approval processes are finalized.

Accreditors should have a critical, though largely new, role to play in Workforce Pell. Historically, most institutional accreditors have not reviewed non-credit or short-term programs in detail. That must change to properly ensure that non-credit programs actually articulate into credit.

Accreditors should begin:

• Developing and piloting standards for evaluating short-term programs, including expectations around learning outcomes, faculty qualifications, student achievement, and employment outcomes.
• Clarifying expectations for articulation and transfer, ensuring that Workforce Pell programs connect to longer educational pathways.
• Building capacity to review a growing volume of new programs quickly without compromising rigor.

This shift will require collaboration among accreditors and institutions to ensure consistency and quality across the system.

The risk of abuse and low-quality programs is real. Past federal aid expansions—particularly in the for-profit sector—show how quickly bad actors can exploit new funding streams.

Because Workforce Pell awards will vary by student and may not cover the full cost of tuition, some students could face funding gaps. Without careful safeguards, these gaps may lead to predatory private loans or income share agreements, trapping students in cycles of debt for programs that don’t lead to good jobs.

Federal and state regulators, accreditors, and colleges must establish guardrails to prevent exploitation, including cost transparency, outcome reporting, and consumer protection standards. Implementation should center the needs of students and taxpayers, not institutions seeking new revenue streams.

If done well, Workforce Pell could become a cornerstone of state and national workforce strategies. It can help meet employer demand for skilled workers, expand access to high-quality training, and promote equity by opening doors for adult learners, low-income students, and people of color who have historically been underserved by higher education.

By aligning education, workforce, and economic development systems, states can use Workforce Pell to build a stronger, more inclusive economy—one where short-term training serves as a launchpad, not a dead end.

But achieving that vision will require deliberate alignment, careful implementation, and sustained vigilance against exploitation. The choices policymakers and institutions make in the next 18 months will determine whether Workforce Pell fulfills its promise—or repeats the mistakes of the past.

Because implementation will move fast—and involve complex processes across federal, state, and institutional systems—the Workforce Pell Watch newsletter will track federal rulemaking, state approval processes, institutional practices, and emerging risks and opportunities, so stakeholders can stay ahead of the curve.

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