By Hugh T. Ferguson, NASFAA Managing Editor ,  Megan Walter, Senior Policy Analyst

The Department of Education (ED) convened its latest Negotiated Rulemaking (neg reg) committee on Monday, focusing on new regulations for the Workforce Pell Program, which would allow Pell Grants to be applied to short-term programs.

The Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee, like its predecessor, is operating on a condensed timeline and has decided to dedicate this week’s session to Workforce Pell provisions.

ED will seek to reach consensus on its issue paper by the end of the week; however, one committee member urged the department to postpone a consensus check until the second week’s session to enable negotiators to gather community feedback. The department said that planning to revisit Workforce Pell during the second week’s session – before the negotiating process even began – was “premature,” and they should instead focus on reaching consensus this week.

In January, the committee will return to the remainder of AHEAD’s agenda, focusing on accountability and gainful employment (GE) and financial value transparency (FVT) among other changes to Title IV programs.

During Monday’s session, Under Secretary of Education Nicholas Kent reiterated that ED will be operating on an accelerated timeline to implement these regulations by July 1, 2026. He urged the negotiators to approach this week like members of last month’s Reimagining and Improving Student Education (RISE) committee.

“Their work will result in a streamlined repayment system, and sensible lending limits that will help push tuition down, and ultimately make college more affordable,” Kent said. “I challenge you to take this approach in the same spirit of collaboration and open-mindedness.”

Kent also emphasized the scope of this committee’s work, which includes implementing provisions contained within the One Big Beautiful Bill Act (OBBBA).

“This committee has the exciting responsibility of helping us develop a new regulatory framework for a federal student aid program, the Workforce Pell Grant program,” Kent said. “This work is critical, yet ambitious. Drafting these new rules is like carving a new sculpture for the first time, with no model to replicate.”

Before turning to the issue paper, negotiators sought to add another seat at the table for civil rights groups and to add a public comment period at the end of each day’s work to enable committee members to hear community feedback in response to the day’s discussions and better inform their conversations for the following session.

ED rejected both of those efforts and argued that these points have been made at previous committees, where both asks were also dismissed.

Jeffrey Andrade, Deputy Assistant Secretary for Policy, Planning, and Innovation at the Office of Postsecondary Education, explained that the department believed the current committee composition adequately represented the stakeholder groups necessary for the topics under discussion. He also argued that previous public comments conducted during a rulemaking session were not directly related to that session’s topics. Andrade also stated that the department’s notice in the Federal Register provided a 30-day comment period and that the committee had a full agenda to work through.

Since the department is operating on a condensed timeline, Andrade urged negotiators to refrain from “re-litigating battles that they had lost at the legislative processes,” and instead focus on the need to meet the statutory deadlines provided by OBBBA.

The committee then turned to the issue paper and began working through four designated sections:

1. Ineligibility for Federal Pell Grants Due to Receipt of Non-Federal Financial Assistance; 

2. Workforce Pell Technical and Conforming Changes 

3. Workforce Pell Definitions; and

4. Governor Approval of Eligible Workforce Programs.

The first section addressed a provision within the OBBBA that affects eligibility for Pell for students whose cost of attendance (COA) is met or exceeded by non-federal aid sources. The regulatory text reads: “A student shall not be eligible for a Federal Pell Grant for an award year during which the student receives grant aid from non-Federal sources, including States, eligible institutions, or private sources, in an amount that equals or exceeds the student’s cost of attendance for the award year.”

Before the conversation began, ED clarified that, “When we refer to the COA [in this provision], we mean the exact cost of attendance. The financial aid administrators and those with experience in the room know that over the history of the federal Pell Grant program, the department has used a student's full-time, full-year cost of attendance as the basis for calculating a Pell Grant. That is not the cost of attendance here — this is the specific and exact cost of attendance for the award year, depending on the student’s enrollment status.”

Kristin Hultquist, the primary negotiator representing Public Institutions of Higher Education, who currently works for HCM Strategists, said that she would work on drafting language to ensure that students experiencing homelessness and foster youth are waived from this provision, and sought to have the language aligned with existing law to specify that colleges do not need to adjust overawards up to $250 for this provision as well.

Many negotiators requested that ED provide more explicit guidance on what non-federal aid sources would be included under this provision. Matthew Feehan, representing students who are veterans, U.S. military service members, or groups representing them, expressed concern about how veteran benefits would be treated, requesting that veteran and related benefits be excluded from this provision.

One negotiator posed the following scenario to ED to better understand scenarios in which a Pell Grant would need to be reduced or returned. In the example, the student’s COA is $20,000, and the student receives a non-federal grant of $13,000 and a Pell Grant of $7,000, so the student's COA is met. In the Spring, the student is subsequently awarded a $1,000 scholarship, which would bring their total nonfederal aid to $14,000, resulting in an overaward of $1,000. According to ED, no return or reduction would be required because the total of the non-federal aid is not equal to or exceeding the student's total COA on its own.

In a situation where a student has already received their full eligible Pell Grant, if that student subsequently receives non-federal assistance that equals or exceeds their COA, the institution must reduce the non-federal assistance until the total aid is within the COA, or if the institution chooses not to reduce the non-federal assistance, it would be required to return all of the student's Pell Grant funds.

ED's federal negotiator, Dave Musser, Deputy Director of Policy Implementation, also added that this provision applies to all crossover periods assigned to that specific award year. For example, if a payment period crosses July 1, the institution has the discretion to assign that period to either the prior or the subsequent award year. Whichever award year is chosen, the funds assigned to that year are the ones implicated by this provision.

Musser then outlined two potential scenarios. In the first instance, if an institution becomes aware that a student has received nonfederal aid that equals or exceeds their COA after already disbursing the full Pell Grant, and the school fails to reduce the nonfederal funds or return the Pell funds in full, the institution is responsible for the resulting overaward. In the second scenario, if a student fails to report additional funds that the institution later discovers, the student is responsible for repaying the Pell Grant amount that should have been returned. If the student does not resolve the overpayment, they may be referred to NSLDS and become ineligible for all federal aid.

This scenario raised concerns among negotiators, who noted that, depending on institutional practices, students could be held liable for an overpayment and consequently lose Title IV eligibility until the debt is repaid. Negotiators requested greater clarity from ED regarding institutional versus student liability to help ensure that students are not unfairly burdened with repayment.

Officials from the department then turned to the “Workforce Pell Technical and Conforming Changes,” section of the issue paper and focused on eligibility requirements and the department’s approval of a given program.

In this section, Aaron Lacey, the primary negotiator for Private Nonprofit Institutions of Higher Education, including Institutions Eligible to Receive Federal Assistance Under Title III and Title V of the HEA, Tribal Colleges and Universities, and Historically Black Colleges and Universities, requested clarification from ED concerning the concept of the Workforce Pell Grant Program.

Lacey asked whether the Workforce Pell Grant was a new funding concept or if ED was instead harnessing the existing Pell Grant structure and applying it to this new program, which the committee was working to define. ED clarified that the Workforce Pell Grant program was an expansion of the Pell Grant program, with new academic programs becoming eligible for the award.

Under the Workforce Pell Definitions section, ED sought to apply definitions to terms outlined in either the OBBBA or the Workforce Innovation and Opportunity Act (WIOA) to provide continuity. Officials reiterated that they do not want to add any new definitions.

Jeff Arther, the primary negotiator for Proprietary Institutions of Higher Education, asked whether the current Satisfactory Academic Progress (SAP) regulations would apply to Workforce Pell Grant programs and whether they would work effectively. Musser acknowledged that existing SAP requirements were designed for traditional degree programs and are not ideally suited for short Workforce Pell Grant programs but noted that congress did add numerous other kinds of evaluations for these programs that are outcomes based versus looking at an inditivual progress in a time period, so although not ideal, they do believe that they programs can still operate within the current SAP framework. Musser went on to explain that while there are ways students could lose eligibility under current SAP rules, they do not expect many cases, due to the short length of the programs.

Andrade spoke up, adding that SAP determinations for these programs will primarily rely on attendance and meeting the 150% timeframe requirement. Musser agreed and concluded by noting that additional sub-regulatory guidance may be needed, and reminded the committee that institutions retain flexibility in crafting their own SAP policies.

Finally, the committee wrapped up with a discussion on language under the “Governor Approval of Eligible Workforce Programs” section. Negotiators sought clarity on program continuity, specifically regarding how leadership changes at the state level may impact a program's eligibility, and questioned what would happen to students currently enrolled in a program if a subsequent governor decides to revoke the eligible status of a program. ED also clarified that a governor’s approval remains valid for the duration of the institution’s Program Participation Agreement (PPA). Once the PPA expires, the program approval also comes to an end, and the approval process would need to happen again. However, while the governor’s approval itself does not require annual renewal, the institution must still complete the yearly recertification of metrics to evaluate the program.

To conclude the day’s session, the committee addressed several rounds of questions from negotiators and will follow up on those outstanding questions in Tuesday’s session. ED also reminded negotiators to submit their requested language in writing so it can be included in updated regulatory text.

The committee will reconvene tomorrow at 9 a.m. ET and resume discussing the issue paper’s language concerning Secretary of Education Approval of Eligible Workforce Programs.

Publication Date: 12/9/2025

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.