ACCOUNTABILITY IN HIGHER EDUCATION AND ACCESS THROUGH DEMAND-DRIVEN WORKFORCE PELL: PELL GRANT EXCLUSION RELATING TO OTHER GRANT AID; AND WORKFORCE PELL GRANTS

DEPARTMENT OF EDUCATION 34 CFR Parts 600, 668, and 690 [Docket ID ED-2026-OPE-0133] RIN 1840-AD99 ACCOUNTABILITY IN HIGHER EDUCATION AND ACCESS THROUGH DEMAND-DRIVEN WORKFORCE PELL: PELL GRANT EXCLUSION RELATING TO OTHER GRANT AID; AND WORKFORCE PELL GRANTS AGENCY:

Office of Postsecondary Education, Department of Education.

ACTION:

Notice of proposed rulemaking (NPRM).

SUMMARY:

The Secretary of Education (Secretary) proposes to amend the regulations governing institutional eligibility, general provisions, and the Federal Pell Grant (Pell Grant) Program under title IV of the Higher Education Act (HEA) of 1965, as amended (the title IV, HEA programs). The proposed regulations would implement statutory changes to the title IV, HEA programs included in the One Big Beautiful Bill Act (OBBB), signed into law by President Trump on July 4, 2025. The OBBB made numerous changes to the HEA, including changes to student eligibility requirements for the Pell Grant Program and the establishment of Workforce Pell Grants for students who enroll in a new type of eligible program called an “eligible workforce program,” intended to be a high-quality, performance-based, short-term program that supports America's workforce needs.

DATES:

We must receive your comments on or before April 8, 2026.

ADDRESSES:

Find a plain language summary of the proposed rule and submit your comments through the Federal eRulemaking Portal at regulations.gov. The Department will not accept comments submitted by fax or by email or comments submitted after the comment period closes. To ensure that the Department does not receive duplicate copies, please submit your comment only once. Additionally, please include the Docket ID at the top of your comments.

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Privacy Note: The Department's policy is to make all comments received from members of the public available for public viewing in their entirety on the Federal eRulemaking Portal at www.regulations.gov. Therefore, commenters should include in their comments only information that they wish to make publicly available. Additionally, commenters should not include in their comments any personally identifiable information (PII) in comments about other individuals. For example, if your comment describes an experience of someone other than yourself, please do not identify that individual or include any personal information that identifies that individual. The Department reserves the right to redact a portion of a comment or the entire comment at any time any PII about other individuals is included.

FOR FURTHER INFORMATION CONTACT:

Aaron Washington, Office of Postsecondary Education, 400 Maryland Ave., SW, Washington, DC 20202. Telephone: (202) 202-987-0911. Email: aaron.washington@ed.gov.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

The Secretary proposes to codify two changes made to the HEA by the OBBB through these regulations. The two changes are:

1. Pell Grant Ineligibility When Other Aid Covers Full Cost. The OBBB does not allow students to receive Pell Grant funds during any period for which they also receive grant or scholarship aid from non-Federal sources—including States, eligible institutions, or private sources—that equals or exceeds their cost of attendance (COA) for such period.

2. Workforce Pell Grants. The OBBB allows students to receive Pell Grants for eligible workforce programs that are 150-599 clock hours in length or an equivalent number of credit hours and that take at least 8 weeks but less than 15 weeks of instructional time to complete (also referred to as “Workforce Pell Grants”). The OBBB establishes several other eligibility requirements for such programs, including approval by a Governor and the Secretary, and annual outcome metrics.

II. Summary of the Major Provisions of this Regulatory Action

Pell Grant Ineligibility When Other Aid Covers Full Cost

The proposed regulations would:

• Unreserve § 690.5 and add language to prohibit a student from receiving a Pell Grant if the student received grant or scholarship assistance from non-Federal sources that equals or exceeds the student's COA for the award year.

• Add § 690.80(d) to require an eligible institution, in such cases where a student would receive non-Federal grant or scholarship assistance that equals or exceeds the student's COA, either to reduce that student's non-Federal grant or scholarship assistance, insofar as such grant or assistance is within the institution's control, or to return all Pell Grant funds and cancel any future disbursements of such funds.

Workforce Pell Grants

The proposed regulations would:

• Amend § 600.10 to require the Secretary's approval of each eligible workforce program in order to establish Pell Grant eligibility.

• Amend § 668.5 to limit the amount of an eligible workforce program that can be offered by an ineligible institution or organization through a written arrangement to 25 percent or less.

• Amend § 668.8 to add eligible workforce programs as a new type of Pell Grant eligible program.

• Amend § 668.20 to prohibit an eligible institution from taking into account any noncredit or reduced credit remedial coursework outside of required coursework (including a course in English as a second language) when determining enrollment intensity and COA for a student enrolled in an eligible workforce program, as defined under 34 CFR 690.92, that is offered in credit hours.

• Amend § 668.32 to prohibit an individual that is enrolled or accepted for enrollment in a program that leads to a graduate credential or has attained a graduate credential from receiving a Pell Grant to enroll in an eligible workforce program.

• Add a definition of an eligible workforce program to § 690.2.

• Amend § 690.6 to allow an otherwise eligible student with a bachelor's degree to receive a Pell Grant to enroll in an eligible workforce program.

• Amend § 690.11 to prohibit a student from receiving concurrent Pell Grant awards for two or more different eligible programs.

• Add § 690.90 to provide a high-level scope and purpose of eligible workforce programs and clarify that eligible students in these programs are only eligible to receive Pell Grants and not any other title IV aid.

• Add § 690.91 to define key terms, including “cohort period,” “earnings measurement period,” “in-demand

• Add § 690.92(a) to establish that an eligible workforce program is an undergraduate program that is at least 8 but less than 15 weeks of instruction.

• Add § 690.92(b) to establish that an eligible workforce program is 150-599 clock hours, 4-15 semester or trimester hours, or 6-23 quarter hours.

• Add § 690.92(c) to prohibit correspondence courses, study abroad, or direct assessment in eligible workforce programs.

• Add § 690.92(d) to require program approval by the Governor of a State.

• Add § 690.92(e) to require program approval by the Secretary.

• Add § 690.92(f) to require eligible workforce programs to pass the value-added earnings metric.

• Add § 690.92(g) to prevent an eligible institution from offering an eligible workforce program if it has been subject to any suspension or emergency or termination action by the Secretary during the five years preceding the date of the determination.

• Add § 690.93(a) to codify statutory requirements for Governor approval, including that the eligible workforce program provides an education aligned with the requirements of high-skill, high-wage, or in-demand industry sections or occupations, meets the hiring needs of employers, leads to a recognized postsecondary credential that is stackable and portable (or prepares students for employment for which there is only one recognized postsecondary credential), and ensures that a student receives academic credit for the program for at least one certificate or degree program at one or more eligible institutions.

• Add § 690.93(b) to require Governors to establish written policies and processes to evaluate whether a program meets the requirements under § 690.93(a), which includes requirements for institutions to submit the necessary information for the Governor to access a program's completion rate and job placement rates; involve a process for an institution to appeal the Governor's determination; and require the Governor to submit an attestation that the State board was consulted when evaluating whether a program is an eligible workforce program.

• Add § 690.93(c) to prohibit the Governor from approving the program until it meets all the requirements under § 690.93(a).

• Add § 690.93(d) to require the Governor to provide the Secretary with a certification, including the components outlined in regulation, that an eligible workforce program was approved by the Governor and meets the requirements.

• Add § 690.93(e) to clarify that a Governor's approval expires with the expiration of the eligible institution's Program Participation Agreement.

• Add § 690.93(f) to establish a process in which a Governor provides a certification of continued approval of each eligible workforce program offered by the eligible institution prior to the expiration of an eligible institution's Program Participation Agreement.

• Add § 690.93(g) to treat a program that serves as a related technical instruction component of a Registered Apprenticeship Program as meeting the requirements of providing an education aligned with high-skill, high-wage, or in-demand industry sectors or occupations, and meeting the hiring needs of employers.

• Add § 690.93(h) to allow the Governors of two States to enter into a bilateral agreement regarding the enrollment of students located in one of those States into some or all the programs located in the other State.

• Add § 690.94(a) to require the Secretary to approve each program, after the Governor has approved the program. The program must meet the conditions under § 690.92(a) and (b) for the 12 months preceding the date on which the eligible institution applied for eligibility for the program. The program must also meet completion and job placement rates prior to application to the Department and each year subsequent to the eligible workforce program's approval.

• Add § 690.94(b) to require an eligible institution to submit to the Governor a list of students that completed the program in each award year, provide the necessary information to verify the job placement rate, and report the published tuition and fees for the eligible workforce program through a process the Secretary determines.

• Add § 690.94(c) to allow the Secretary to waive some or all the proposed requirements under § 690.94(a) and (b) related to submission of completion rates and the Governor's certification of job placement rates.

• Add § 690.94(d) to prohibit an eligible workforce program's tuition and fees from exceeding the value-added earnings of the program.

• Add § 690.94(e) to exclude certain categories of students from the numerator and denominator of the completion and placement rate calculations.

• Add § 690.95(a) to codify the value-added earnings process. An eligible workforce program's total published tuition and fees may not exceed the value-added earnings of students who are working, who received a Pell Grant for enrollment in the program, and who completed the program during the cohort period.

• Add § 690.95(b) to establish that an eligible workforce program's value-added earnings are determined by calculating the difference between the adjusted median earnings of student completers during the earnings measurement period as defined in § 690.91 and 150 percent of the U.S. Federal Poverty Guidelines applicable to a single individual for such tax year.

• Add § 690.95(c) to require the Secretary to publish the value-added earnings that will apply to the eligible workforce program for the upcoming award year no later than three months prior to the beginning of the award year.

• Add § 690.95(d) to require that an eligible institution keep published tuition and fees at or below the value-added earnings calculated for the program for all students who received a Pell Grant and first enroll in the eligible workforce program during the award year that begins following the annual release of the program's value-added earnings.

• Add § 690.95(e) to establish that programs that have a calculated value-added earnings of zero or a negative value are not eligible programs.

• Add § 690.95(f) to require an eligible institution to provide evidence, upon request, to the Secretary that its published tuition and fees do not exceed the published value-added earnings for that award year.

• Add § 690.95(g) to establish that the Secretary will calculate the value-added earnings for an eligible workforce program using the student completion data the eligible institution reported.

• Add § 690.95(h) to establish the number of students needed for the Secretary to calculate the value-added earnings for the program.

• Add § 690.95(i) to establish that the Federal agency with earnings data will provide the Department with median annual earnings of the students whom the Federal agency has matched with earnings data.

• Add § 690.95(j) to require the Secretary to include completers from all eligible workforce programs with the same six-digit Classification of Instructional Programs (CIP) code when calculating value-added earnings.

• Add § 690.95(k) to clarify that, if more than 50 percent of students in the eligible workforce program are not

• Add § 690.96(a) to establish a process for programs that lose eligibility. A program will become ineligible at the end of the payment period that begins following the date that the Governor acts to withdraw approval or the Governor fails to reapprove the program.

• Add § 690.96(b) to provide that, except in limited circumstances such as a pending appeal, a program will become ineligible at the end of the payment period that begins after the date that the Secretary determines that the eligible institution failed to meet the completion rate or job placement rate requirements.

• Add § 690.96(c) to provide that, if an eligible workforce program fails to meet the value-added earnings requirements, the program will become ineligible at the beginning of the award year following the release of the value-added earnings, and the Secretary will assess a liability to the eligible institution.

• Add § 690.97(a) to establish a process for an eligible workforce program to regain eligibility once it has lost it. This process would prohibit an eligible institution from reestablishing the eligibility of a failing program or establish eligibility for a substantially similar program until two years following the date the program loses eligibility or the date the eligible institution voluntarily discontinues the failing eligible workforce program, whichever date is earlier.

• Add § 690.97(b) to establish that, if an eligible workforce program loses eligibility due to a loss of Governor approval, the program may reestablish eligibility after the Secretary receives the Governor's certification that the program has been approved, and after the Secretary determines the program has met eligibility criteria.

• Add § 690.97(c) to allow an eligible institution to request that a program's eligibility be reinstated if the program loses its eligibility due to the published tuition being higher than its value-added earnings.

Cost and Benefits

As further detailed in the Regulatory Impact Analysis, the Department estimates that the proposed regulations would have significant impacts on students, educational institutions, employers, taxpayers, State governments, and the Department.

Under the proposed regulations, students would benefit from expanded access to Federal grant funds for new workforce programs that institutions are likely to offer—or may already offer—but that were previously ineligible for such funding. Students will also experience higher wages due to the skills and credentials they gain by attending eligible workforce programs, including receiving stackable credentials that will allow them to pursue further postsecondary education and workforce training. Employers will benefit from the proposed regulations because the regulations will increase the number of skilled workers in the labor market. Institutions will benefit from the new enrollments and the resulting tuition revenues. State governments and taxpayers will also benefit from greater tax revenues and reduced expenditures on public assistance programs because of the higher wages experienced by those completing eligible workforce programs.

The Department will incur new costs to finance Pell Grants for eligible workforce programs, which are funded as part of the existing Pell Grant Program. The Department will incur new costs to implement the changes to the Pell Grant Program and monitor eligibility, as will State governments, who, if they or institutions within their State choose to participate, must certify eligible programs and monitor their completion and job placement outcomes. While taxpayers will bear the cost of financing Pell Grants to eligible workforce programs, they will also benefit indirectly from the earnings gain that Pell Grant recipients receive, such as through reduced use of public benefits programs for low-income households.

III. Directed Questions

Written Arrangements To Provide Educational Programs (§ 668.5(c))

The Department seeks comments from relevant stakeholders regarding the proposal to allow eligible institutions to enter into a written arrangement with an ineligible institution or organization for up to 25 percent of an eligible workforce program. Currently, eligible institutions may enter into written arrangements with ineligible institutions and organizations to offer a portion greater than 25 percent but less than 50 percent, if such written arrangements are reviewed and approved by the eligible institution's accrediting agency as a substantial change. During negotiated rulemaking, the Department explained that it was not applying such an option for eligible workforce programs because there is not the same level of quality assurance given the broad lack of experience in the accreditation industry in evaluating agreements for short-term programs. Moreover, the Department is concerned that the provision of eligible workforce programs by ineligible institutions and organizations could rapidly expand far beyond the intent of the statute. However, the Department also recognizes the potential value in partnerships between eligible institutions and certain ineligible organizations, such as employers and unions or non-Title IV eligible Registered Apprenticeship related training instruction providers, that could result in the enhanced quality of eligible workforce programs. Therefore, we seek additional information from commenters regarding whether the proposed 25 percent standard for other eligible programs is an appropriate level, or whether a greater percentage of instruction could be provided by ineligible organizations under specific conditions. We request that commenters provide examples, data, or rationales for any proposed limits other than the Department's current proposal.

Ineligibility Due to Grant or Scholarship Assistance From Non-Federal Grants (§ 690.5)

The Department seeks feedback from relevant stakeholders about potential methods to prevent manipulation or circumvention of the new statutory limitation on Pell Grant eligibility for a student who receives grant or scholarship assistance from non-Federal sources that exceed the student's cost of attendance. Note that wages earned by the student from his or her work for their employer are not grant or scholarship assistance.

The Department is concerned that the provision, as currently written based on the language in statute, may be vulnerable to certain types of circumventions that would limit the effectiveness of the statutory requirement. For example, under the regulations as currently proposed, a student would not qualify for Pell Grant funds if they received non-Federal assistance that equaled or exceeded their cost of attendance but could qualify for their full Pell Grant if that assistance was just one dollar less than the total cost of attendance. This provides avenues for institutions to continue to award Pell Grants when the student's COA has been paid for by non-Federal aid, either by limiting the grant or scholarship assistance that it provides to just under the student's cost

The Department was sufficiently concerned about this possibility that it originally considered a different regulatory approach that would have required institutions to reduce Pell Grant or non-Federal grant or scholarship assistance if the combination of such assistance exceeded the student's cost of attendance. The Department ultimately chose to propose regulations that mirror the statute because we do not believe the statutory text is sufficiently flexible to allow for this interpretation. Additional information can be found in the “Alternatives Considered” section of this NPRM.

Because we remain concerned about this potential vulnerability, the Department seeks feedback from relevant stakeholders about how to prevent gaming of this provision, for example through additional reporting, oversight, or enforcement mechanisms. We request that commenters provide a clear rationale for any requirement other than the Department's current proposal, including an explanation of why the alternative would provide greater net benefits to taxpayers in light of the costs it would impose on institutions or students.

Components Determined by Governors (§ 690.93)

The Department seeks feedback on the proposal to allow two Governors to enter into a bilateral agreement for an eligible institution in one State to offer an eligible workforce program to students in another State through distance education so that students may use Pell Grant funds to attend a program located in another State. During negotiated rulemaking, the Department stated its concern regarding the potential for rapid proliferation of eligible workforce programs offered through distance education (§ 600.2) and the need for appropriate safeguards. Many components of an eligible workforce program center on high-wage, high-skill, or in-demand occupations and sectors in a particular State, and the employability of graduates in the State where the eligible workforce program was approved. As such, these conditions may not apply in another State where a student is located while enrolled in a distance education online program. Bilateral agreements allow the Governors of two States to determine that an eligible workforce program meets the workforce needs of both States while also preventing the rapid proliferation of such programs among States where the program's training is not as valuable.

However, it is not the Department's intent to limit the expansion of high-quality eligible workforce programs through distance education. Specifically, the Department is concerned that distance education programs that may prepare students for the workforce in one State may not be appropriate in other States due to regional differences in the labor market. As such, multilateral agreements between Governors in numerous States may be inappropriate because they may not reflect the workforce needs in all of the States that could be parties to the agreement. Therefore, we seek comments from the public regarding whether the requirement for bilateral agreements is appropriate to limit the unchecked proliferation of eligible workforce programs in areas where they are not aligned with labor market demand, while also providing adequate flexibility for eligible institutions to quickly establish programs that offer valuable training to students in other States through distance education. We request that commenters provide examples, data, or rationale for any requirement for interstate agreements other than the Department's current proposal.

Value-Added Earnings: Interim Value-Added Earnings Metric (§ 690.95(a))

Based on the cohort period outlined in statute (and further defined in § 690.91), the earliest time that the Department can calculate official value-added earnings for workforce programs that become eligible during the 2026-27 award year (the first year of eligibility) will be for the 2030-31 award year. A few negotiators expressed concern that eligible workforce programs' tuition and fees would not be held accountable for low earnings under the value-added earnings measurement for this four-year time period. The Department seeks feedback from the community on whether an interim value-added earnings metric should be computed, at the very least to make those applying for workforce programs to be aware of the potential earnings outcomes, and whether an eligible institution's workforce programs should be held accountable in any way to said interim earnings metric prior to the official calculation of the value-added earnings metric. We are also interested in feedback regarding whether the result of an interim measure should be made available to public, and if so, the appropriate timeframe for publishing that information. The Department requests that the public include information outlining the type of data that should be used when calculating interim earnings measurements and any actions that should be taken against an eligible institution as a result of any eligible workforce programs that fail the interim value-added earnings metric. In the interim, is there a reliable measure of actual median earnings for these programs based on state or federal administrative data that can be used for interim purposes? If so, what is this data? Please provide all citations and sources.

Value-Added Earnings: Exclusion of Certain Students in the Completer Cohort (§ 690.95(a))

The Department seeks feedback from relevant stakeholders regarding the cohort of completers that are included in the calculation of the value-added earnings metric. During negotiated rulemaking, the Department and negotiators discussed the importance of excluding non-working individuals from the cohort. However, the Department also recognizes that there may be other scenarios in which it might be beneficial to exclude additional types of students, such as students who are currently enrolled in college at the time their earnings are measured. Excluding currently enrolled students has long been the practice for calculating other earnings metrics by the Department, such as the 2023 Gainful Employment regulations and earnings metrics reported in the College Scorecard.

That said, there are also strong arguments for limiting the types of students who are excluded from accountability metrics such as the value-added earnings metric. Exclusions have the potential to introduce incentives for institutions to design programs in a manner that limits the number of students who are included in the value-added earnings calculation, or could have other unanticipated consequences.

Therefore, the Department seeks additional information from commenters regarding whether other types of students should be excluded from the cohort of individuals used to calculate the value-added earnings metric. The Department requests that commenters support their position using data (when available) and by discussing the potential administrative burden that their proposal would create or reduce for institutions, the Department, and relevant Federal agencies.

Value-Added Earnings: Process for Combining Multiple Cohorts (§ 690.95(h))

To compute the value-added earnings metrics for small programs, the Department is proposing a process that combines completers from multiple cohorts until a minimum number (50) is obtained. The primary reason for combining completers from multiple cohorts is so that the Federal agency with earnings data can compute a median earnings value for eligible workforce programs without the need for privacy suppression due to small sample sizes. The specific process the Department proposes for combining cohorts is to aggregate completers from the four most recent award years (the current award year, and the three prior award years). However, the Department recognizes that there may be alternative ways to aggregate multiple years of cohorts, for example, including completers from more than three prior award years when combining cohorts. Such an approach may allow the Department to compute a value-added earnings metric for a larger number of eligible workforce programs, making more programs subject to the value-added earnings test and providing additional consumer protection for students. This approach aligns with the consensus language on the aggregation process that the negotiating committee agreed to in week two of negotiations, under discussions regarding the accountability provisions of the OBBB. The Department seeks feedback from relevant stakeholders regarding the cohort aggregation process, particularly related to the maximum number of years included in the aggregation. The Department requests that commenters support their position using data (when available) and by discussing the potential regulatory burden that their proposal would create or reduce for the Department and relevant Federal agencies. Commenters should also identify the manner in which this can be done to prevent any potential gaming by institutions that may allow colleges to artificially inflate earnings values.

Value-Added Earnings: Programs Serving Out-Of-State Students (§ 690.95(k))

The Department seeks feedback on its proposal that, if more than 50 percent of students enrolled in an eligible workforce program are not located in the State in which the eligible institution offering the program is located, the Department will not adjust the program's median earnings by the State and metropolitan area regional price parities of the Bureau of Economic Analysis when calculating the value-added earnings measurement. In these cases, the value-added earnings would simply use the national median earnings. During negotiated rulemaking, the Department expressed concerns about adjusting a program's median earnings by regional price parities if most students in the program do not actually live in the State where the program is being offered (for example, through distance education). However, the data that the Department would use to make this determination is limited. We seek feedback from the public regarding the most effective way to avoid adjusting earnings by regional price parities that are not applicable to the locations of most students in a workforce program. As part of this discussion, the Department also seeks feedback on what data to use to identify the student's location for this purpose. The Department proposed using the student's address or State of legal residence as reported on their Free Application for Federal Student Aid (FAFSA®) form at the time of enrollment. However, some negotiators discussed concerns with the accuracy of the FAFSA address information as reported by students and proposed using the student's address at the time the value-added earnings are measured as a better reflection of potential geographic earning differences. If commenters have a proposal other than what the Department has outlined in these proposed regulations, please provide a rationale for using a different methodology, along with any specific data and calculation requirements necessary to institute an alternative approach, either for adjusting the median earnings, or when and how to identify appropriate student locations.

IV. Invitation to Comment

We invite you to submit comments regarding these proposed regulations. For your comments to have maximum effect in developing the final regulations, we urge you to clearly identify the specific section or sections of the proposed regulations that each of your comments addresses and to arrange your comments in the same order as the proposed regulations. The Department will not accept comments submitted after the comment period closes.

The following tips are meant to help you prepare your comments:

• Be concise but support your claims.

• Explain your views as clearly as possible and avoid using profanity.

• Refer to specific sections and subsections of the proposed regulations throughout your comments, particularly in any headings that are used to organize your submission. Explain why you agree or disagree with the proposed regulatory text and support these reasons with data-driven evidence, including the depth and breadth of your personal or professional experiences. We encourage commenters to include supporting facts, research, and evidence in their comments. When doing so, commenters are encouraged to provide citations to the published materials referenced, including active hyperlinks. Likewise, commenters who reference materials which have not been published are encouraged to upload relevant data collection instruments, data sets, and detailed findings as a part of their comment. Providing such citations and documentation will assist us in analyzing the comments.

• Where you disagree with the proposed regulatory text, suggest alternatives, including regulatory language, and your rationale for the alternative suggestion.

• Submit your public comment only.

• Do not include personally identifiable information (PII) such as Social Security numbers or loan account numbers for yourself or for others in your submission.

• Do not include any information that directly identifies or could identify other individuals or that permits readers to identify other individuals.

Mass Writing Campaigns: In instances where individual submissions appear to be duplicates or near duplicates of comments prepared as part of a writing campaign, the Department will post one representative sample comment along with the total comment count for that campaign to Regulations.gov. The Department will consider these comments along with all other comments received.

In instances where individual submissions are bundled together (submitted as a single document or packaged together), the Department will post all of the substantive comments included in the submissions along with the total comment count for that document or package to Regulations.gov. A well-supported comment is often more informative to the agency than multiple form letters.

Public Comments: The Department invites you to submit comments on all aspects of the proposed regulatory language specified in this NPRM, and in the Regulatory Impact Analysis and Paperwork Reduction Act sections.

The Department may, at its discretion, decide not to post or to withdraw certain comments and other materials that contain promotion of commercial services or products, and spam.

We may not address comments outside of the scope of these proposed regulations in the final rule. Comments that are outside of the scope of these proposed regulations are comments that do not discuss the content or impact of the proposed regulations or the Department's evidence or reasons for the proposed regulations.

Comments that are submitted after the comment period closes will not be posted to Regulations.gov or addressed in the final rule.

We invite you to assist us in complying with the requirements of Executive Orders 12866 and 13563 and their overall requirement of reducing regulatory burden that might result from these proposed regulations. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the Department's programs and activities.

During and after the comment period, you may inspect public comments about these proposed regulations by accessing Regulations.gov.

Assistance to Individuals with Disabilities in Reviewing the Rulemaking Record: On request, we will provide appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for these proposed regulations. If you want to schedule an appointment for this type of accommodation or auxiliary aid, please contact the Information Technology Accessibility Program Help Desk at ITAPSupport@ed.gov to help facilitate this request.

Clarity of the Regulations

Executive Order 12866 and the Presidential memorandum “Plain Language in Government Writing” require each agency to write regulations that are easy to understand. The Secretary invites comments on how to make the regulation easier to understand, including answers to questions such as the following:

• Are the requirements in the proposed regulations clearly stated?

• Do the proposed regulations contain technical terms or other wording that interferes with their clarity?

• Does the format of the proposed regulations (grouping and order of sections, use of headings, paragraphing) aid or reduce their clarity?

• Would the proposed regulations be easier to understand if we divided them into more (but shorter) sections? (A “section” is preceded by the symbol “§ ” and a numbered heading; for example, § 668.2 General definitions.)

• Could the description of the proposed regulations in the SUPPLEMENTARY INFORMATION section of this preamble be more helpful in making the proposed regulations easier to understand? If so, how?

• What else could we do to make the proposed regulation easier to understand?

To send any comments that concern how the Department could make these proposed regulations easier to understand, see the instructions in the ADDRESSES section.

V. Background

The OBBB, which President Trump signed into law on July 4, 2025, made important changes to the title IV, HEA programs, including one of the most significant changes to the Pell Grant Program in its history, to address America's workforce needs.

Specifically, the OBBB expanded Pell Grant eligibility to eligible workforce programs. These programs are shorter in duration than the undergraduate programs currently eligible for Pell Grants, and they must meet specific accountability metrics related to graduate earnings, as well as indicia of employer demand—requirements that are not applicable to other eligible programs.

The OBBB also added a new criterion for Pell Grant eligibility that does not allow students to receive Pell Grant funds if they also receive grant or scholarship aid from non-Federal sources—including States, institutions of higher education, and private sources—in a total amount that equals or exceeds their cost of attendance (COA). Eligible institutions determine the COA by establishing a budget for tuition and fees, books, supplies, housing, food, and other costs.

This NPRM complies with Section 492 of the HEA, which requires the Secretary to obtain public input and conduct negotiated rulemaking before issuing proposed regulations for the title IV, HEA programs. To meet those requirements and implement the new statutory directives provided for in the OBBB, the Department convened the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) negotiated rulemaking committee, which reached consensus agreement on the entirety of the regulatory text included in this NPRM.

VI. Authority for This Regulatory Action

The OBBB amended portions of the HEA related to the title IV, HEA programs administered by the Department. The Secretary has been granted broad authority by Congress to implement federal student aid programs under title IV of the HEA, including amendments made by the OBBB. See 20 U.S.C. 1221e-3, see also 20 U.S.C. 1082, 3441, 3471, 3474. In order to carry out functions otherwise vested in the Secretary by law or by delegation of authority pursuant to law, and subject to limitations as may be otherwise imposed by law, the Secretary is authorized to make, promulgate, issue, rescind, and amend rules and regulations governing the manner of operations of, and governing the applicable programs administered by, the Department. See 20 U.S.C. 1221e-3. These programs include the Federal student loan programs authorized by the HEA, as amended by the OBBB.

Waiver of HEA Master Calendar Requirements

The Harmonious-Reading Canon provides that statutes should, when possible, be interpreted in a way that renders them compatible, not contradictory, but such an approach is not always possible if context and other considerations (including the application of other canons) make it impossible to do so, another approach to statutory interpretation, such as the General/Specific Canon must be applied. See Scalia & Garner, Reading Law, 155 (2012). The General/Specific Canon of statutory construction dictates that, in cases where a general prohibition is contradicted by a specific permission or a general permission that is contradicted by a specific prohibition, the more specific of the two provisions controls. See Scalia & Garner, Reading Law, 158 (2012). Because, as discussed below, OBBB contains provisions with effective dates that cannot possibly be implemented in regulation in accordance with the HEA's master calendar requirements, OBBB implicitly provides a limited waiver of the HEA's master calendar requirement, so far as it is necessary to promulgate regulations that give effect to those provisions. See Dorsey v. United States, 567 U.S. 260, 274 (2012) (stating that an agency's compliance with an existing statute “cannot justify a disregard of the will of Congress as manifested either expressly or by necessary implication in a subsequent enactment” ( quoting Great Northern R. Co. v. United States, 208 U. S. 452, 465 (1908).

Here, the OBBB was enacted on July 4, 2025. The OBBB directs the Department to implement roughly a dozen provisions by July 1, 2026. Many of these provisions are not self-executing and could not be implemented absent the Department promulgating regulations to provide details for institutions on how to comply with the OBBB. Congress gave the Secretary discretion within the OBBB to implement the provisions impacting the title IV, HEA programs and knew that its commands were not self-executing when directing the Secretary to take action. Congress expected the Secretary to act via rulemaking before July 1, 2026, to enable these provisions to actually go into effect.

The master calendar in the HEA provides that regulatory changes initiated by the Secretary affecting the title IV, HEA programs must be published in final form by November 1st in order for them to go into effect by July 1st of the following year. 20 U.S.C § 1089(c)(1). Section 492 of the HEA requires the Department to undertake negotiated rulemaking as part of any regulation under title IV of the HEA. In order to conduct negotiated rulemaking and meet APA requirements, the Department must have a public hearing (providing notice to the public), solicit nominations from the public to serve on a negotiated rulemaking committee, select non-Federal negotiators, hold negotiations, develop an NPRM, publish an NPRM (with at least a 30-day comment period), and then publish a final rule that responds to any substantive comments received. The fastest possible timeframe in which the negotiated rulemaking process for the rulemaking packages assigned to the AHEAD Committee could have occurred is 149 days, which is irreconcilable with the timeline allowed by the enactment of the OBBB, due to the fact that there were 120 days between July 4, 2025, (the day the OBBB was enacted), and November 1, 2025, (the publication date of the final rule required by the master calendar).

It would not have been possible for the Department to undertake every step of the negotiated rulemaking process by November 1, 2025, in order to implement the provisions that become effective in the OBBB by July 1, 2026, which is the statutory effective date. Congress was aware of this temporal impossibility when they passed the OBBB, yet Congress decided that these provisions would still go into effect on July 1, 2026. Because these provisions are not self-implementing and cannot go into effect unless the Department promulgates a final rule, the OBBB implicitly waives the master calendar.

With important details unanswered by the plain text of the OBBB, it is clear that the policy scheme set forth in the HEA made by the OBBB cannot be implemented absent regulatory action by the Department. At the same time, even though the requirements of negotiated rulemaking are onerous, it is possible to undergo negotiated rulemaking and publish a final rule at least 30 days prior to the effective date of these OBBB provisions on July 1, 2026. Therefore, the OBBB does not waive negotiated rulemaking nor any provision in the APA. For provisions in the OBBB that become effective July 1, 2027, and beyond, Congress did not implicitly repeal the master calendar because it is possible for the Department to publish a final rule that complies with the master calendar to implement those provisions.

Severability

“It is axiomatic” that a regulation may be invalid in part but not in whole or as applied to one set of facts but not another. Ayotte v. Planned Parenthood of N. New England, 546 U.S. 320, 329 (2006). If a court finds one part of a regulation is unlawful, the “normal rule” is to enjoin only that part. Id. (quoting Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 504 (1985).

It is the Department's intent that if any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.

Statutes and regulations are severable if the separate provisions are “wholly independent of each other” and can operate independently. Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 502 (1985). That is the case here. No part herein will be affected if another part is found to be unlawful. Nor does the Department believe courts or regulated parties would be unable to apply the rule if one part is held invalid. C.f. Dep't of Educ. v. Louisiana, 603 U.S. 866, 868 (2024) (per curiam) (denying the government's request to stay a preliminary injunction against an entire rule where only parts were found to be invalid because “schools would face in determining how to apply the rule for a temporary period with some provisions in effect and some enjoined”).

VI. Public Participation

Section 492 of the HEA, 20 U.S.C. 1098a, requires the Secretary to obtain public involvement in the development of proposed regulations affecting programs authorized by the title IV, HEA programs. Prior to developing this NPRM, the Department obtained advice and recommendations from individuals and representatives of groups involved in the title IV, HEA programs. This outreach included a 30-day public comment period, one day of public hearings, and five days of in-person negotiated rulemaking sessions on these proposed regulations at the Department's headquarters in Washington, DC. Further details regarding these efforts are provided below.

On July 25, 2025, the Department published in the Federal Register (90 FR 35261) a notice of our intent to hold public hearings and to establish two negotiated rulemaking committees to consider regulatory changes to the title IV, HEA programs, with one committee addressing topics including institutional and programmatic accountability and the Pell Grant Program. The engagement included a 30-day written public comment period, a virtual public hearing on August 7, 2025, and five days of negotiated rulemaking specific to this NPRM.

Public Comments and Hearings

We received 1,864 written comments in response to the Federal Register notice. Additionally, we held a virtual public hearing on August 7, 2025. A total of 57 individuals testified virtually at the hearing.

You may view the written comments submitted in response to the July 29, 2025 “Intent to Establish Negotiated Rulemaking Committees; Correction” correction notice (90 FR 35652), by visiting the Federal eRulemaking Portal at Regulations.gov , within docket ID ED-2025-OPE-0151. Instructions for finding comments are also available on the site under “FAQ.”

Transcripts of the public hearings can be accessed at https://www.ed.gov/laws-and-policy/higher-education-laws-and-policy/higher-education-policy/negotiated-rulemaking-for-higher-education-2025-2026.

Negotiated Rulemaking

On July 25, 2025, we published the notice in the Federal Register referenced earlier in the Public Participation section. That notice also set forth a schedule for committee meetings and requested nominations for individual negotiators to serve on the AHEAD Committee.

We chose members of the negotiated rulemaking committee from individuals nominated by groups involved in the title IV, HEA programs. We selected individuals with demonstrated expertise

• Students who are currently enrolled and receiving assistance from the title IV, HEA programs: Eric Atchison, Arkansas State University System, and Magnus Noble (alternate), University of Illinois Springfield.

• Students who are veterans, U.S. military service members or groups representing them: Matthew Feehan, Veterans Education Project, and Julie Howell (alternate), Paralyzed Veterans of America.

• Employers and groups representing the business community, including small, medium, and large businesses: David Kafafian, Clasp, and Dennis Cariello (alternate), Hogan Marren Babbo & Rose.

• Legal assistance organizations that represent students and borrowers, consumer advocates, and civil rights groups that represent students: Tamar Hoffman, Community Legal Services of Philadelphia, and Zoe Kemmerling (alternate), Legal Aid of the District of Columbia.

• Public 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: Kristin Hultquist, HCM Strategists, and Tonjua Williams (alternate), St. Petersburg College.

• 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: Aaron Lacey, Thompson Coburn LLP, and Joanna Roush (alternate), Liberty University.

• Proprietary institutions of higher education, as defined in 34 CFR 600.5: Jeff Arthur, ECPI University, and Ryan Claybaugh (alternate), Paul Mitchell Advanced Education.

• State workforce agencies and workforce development boards: Rachael Stephens Parker, Maryland Governor's Workforce Development Board, and Andrea DeSantis (alternate), North Carolina Department of Commerce.

• State grant agencies, and other State and non-profit higher education financing organizations: J. Ritchie Morrow, Nebraska Coordinating Commission for Higher Education, and Elizabeth McCloud (alternate), Pennsylvania Higher Education Assistance Agency.

• State higher education executive officers, State authorizing agencies, and other State regulators: Randy Stamper, Virginia Community College System, and Heather DeLange (alternate), Colorado Department of Higher Education.

Accrediting agencies recognized by the Secretary of Education: Michale McComis, Accrediting Commission of Career Schools and Colleges, and Gedalia (Gary) Litke (alternate), Association of Advanced Rabbinical and Talmudic Schools.

• Organizations representing taxpayers and the public interest: Preston Cooper, American Enterprise Institute, and Ethan Pollack (alternate), Jobs for the Future.

After obtaining extensive advice and recommendations from the public, the Secretary, as required by Section 492 of the HEA, 20 U.S.C. 1098a, prepared draft regulations and submitted them to a negotiated rulemaking process. The committee for these proposed regulations began negotiations on December 8, 2025, and concluded on December 12, 2025. The committee reviewed and discussed draft regulations prepared by the Department, as well as alternative regulatory language and suggestions proposed by committee members. Additionally, during each negotiated rulemaking meeting, some non-Federal negotiators shared feedback that they had received from stakeholders in their respective constituencies. This approach facilitated the inclusion of a wide array of ideas and perspectives, which contributed to the development of the consensus language.

Under the organizational protocols for negotiated rulemaking agreed to by all members of the committee, if the committee reaches consensus on the proposed regulations, the Department agrees to publish, without substantive alteration, a defined group of regulations on which the committee reached consensus—unless the Secretary reopens the process or provides a written explanation to the participants stating why she has decided to depart from the agreement reached during negotiations. In this instance, consensus is considered to be the absence of dissent by any member of the negotiated rulemaking committee (abstaining members are not considered to be dissenting from the proposal). The committee reached consensus on the entirety of the draft regulations on December 12, 2025. As a result, this NPRM reflects the consensus language with minor technical and non-substantive corrections which are noted in subsequent sections of this NPRM.

The AHEAD Committee met subsequently during the week of January 5, 2026, to consider a separate set of draft regulations related to implementing accountability provisions in the OBBB, but the regulatory provisions discussed during that week are outside the scope of this proposed rule. The Department will publish a separate NPRM on these accountability regulations.

VII. Significant Proposed Regulations

The Department discusses substantive issues under the sections of the proposed regulations to which they pertain. Generally, we do not address proposed regulatory provisions that are technical or otherwise minor in effect.

Pell Grant Ineligibility When Other Aid Covers Full Cost Ineligibility due to Grant or Scholarship Assistance From Non-Federal Grants (§ 690.5(a) and (b))

Statute: Section 401(d)(6) of the HEA, as amended by Section 83004 of the OBBB, provides that beginning on July 1, 2026, a student shall not be eligible for a Pell Grant during any period for which the student receives grant aid from non-Federal sources in an amount that equals or exceeds the student's COA for such period.

Current Regulations: None.

Proposed Regulations: The Department proposes to establish in regulation that a student shall not be eligible for a Pell Grant for an award year during which the student receives grant or scholarship assistance from non-Federal sources (including States, eligible institutions, or private sources) in an amount that equals or exceeds the student's COA for the award year.

We also propose to clarify that “grant or scholarship assistance from non-Federal sources” does not include sources that Section 480(i) of the HEA excludes from “other financial assistance,” including tax credits under section 25A of the Internal Revenue Code (IRC), distributions under section 529 of the IRC or Coverdell Education Savings Accounts, and emergency financial assistance provided to students for unexpected expenses that are a component of cost of attendance.

Reasons: The Department's proposed language mirrors the statute. When the total amount of a student's non-Federal grant and scholarship assistance equals or exceeds the student's COA, the student cannot receive a Pell Grant because Pell Grants may only be used to cover eligible expenses and, in such instances, all of the student's eligible expenses are covered by other sources of funding. When that total is less than the student's COA, the student can receive

Eligible institutions determine a student's COA based on the costs associated with individual programs of study. The allowable costs included in a student's COA are set forth in HEA Section 472 and generally encompass all the regular costs that a student would usually pay to attend a given program at an eligible institution: tuition and fees, books, supplies, and housing and food. 1 The COA can be further specified, on an individual basis, when a student informs his or her institution's financial aid office that they have costs that they are responsible for (for example, unusually high medical bills) that are not accounted for in the normal COA. In such cases, eligible institutions can use professional judgment on a case-by-case basis to adjust the student's COA to account for that student's unique costs.

1 Federal Student Aid Handbook—Volume 3, Chapter 2—Cost of Attendance— https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2025-2026/vol3/ch2-cost-attendance-budget.

Several negotiators expressed concern that the receipt of grant or scholarship aid would have an adverse effect and prohibit students from receiving a Pell Grant that may be necessary for their education. However, if a student's entire COA is met with non-Federal grant or scholarship aid, that student has no remaining allowable education expenses for a Pell Grant to be used for. Therefore, the student would have no need for a Pell Grant to cover education-related expenses. In addition, this provision safeguards the interests of taxpayers by only providing Pell Grants to students who need financial assistance, thereby ensuring equity with other students receiving aid from the Pell Grant Program.

During negotiated rulemaking, we received a request from a negotiator to add “assistance” for clarity and transparency for students. We do not believe providing this clarity would substantively change the regulation and did so.

The Department proposes that the regular exclusions from “other financial assistance” enumerated in Section 480(i) of the HEA would not be treated as non-Federal grant or scholarship assistance under this provision. For example, in Section 480(i), it states “emergency financial assistance provided to the student for unexpected expenses that are a component of the student's COA, and not otherwise considered when the determination of the student's need is made . . .” is not considered grant or scholarship assistance. The Department does not have the authority to exclude other types of non-Federal grant or scholarship assistance not specifically stated in the statute. This clarification does not substantively change the proposed regulation or affect the Department's enforcement of Section 480(i).

Although the Department believes its proposed regulations closely adhere to the statute, we have concerns about the vulnerability of this provision to abuse by institutions seeking to subvert the intent of the law by manipulating the amount of a student's grant or scholarship funds or by using professional judgment to slightly alter the student's cost of attendance. Because of these concerns, we have included a question regarding how to limit such vulnerabilities under the Directed Questions section in this NPRM.

Recalculation of a Pell Grant award (§ 690.80(d))

Statute: Section 401(d)(6) of the HEA, as amended by Section 83004 of the OBBB, provides that beginning on July 1, 2026, a student shall not be eligible for a Pell Grant during any period for which the student receives grant aid from non-Federal sources in an amount that equals or exceeds the student's COA for such period. Additionally, Section 401(f) states that payments of Pell Grant funds shall be made in accordance with regulations promulgated by the Secretary.

Current Regulations: Current regulations under § 690.80 prescribe instances in which an eligible institution recalculates a Pell Grant award. An eligible institution is required to recalculate a Pell Grant if there is a change to the student's Student Aid Index (formerly the Expected Family Contribution) or enrollment intensity (formerly the enrollment status). The eligible institution may, but is not required to, recalculate a Pell Grant due to a change in the student's COA when the enrollment status is unaffected.

Proposed Regulations: The proposed regulation requires that if, prior to the final disbursement of a student's Pell Grant for an award year, the eligible institution becomes aware that the student has received or will receive grant or scholarship assistance from non-Federal sources that equals or exceeds the student's COA, the eligible institution must either (1) reduce the non-Federal grant or scholarship assistance—insofar as the institution has control over such grant or assistance—until it does not equal or exceed the student's COA, or (2) return all of the Pell Grant funds that the student received for that award year pursuant to § 690.79 and cancel any future disbursements of such funds for that award year.

Reasons: The proposed regulation describes the options available to an eligible institution when it learns that a student has received or will receive non-Federal grant aid that equals or exceeds the student's COA. The Department understands that there will be circumstances when eligible institutions will not know this or become aware of it until after the final Pell Grant disbursement; in such cases the institution will not need to take any action. However, if an eligible institution becomes aware of this information prior to the final disbursement of Pell Grants for the award year, it must act in accordance with the proposed rule. The Department would like feedback from institutions to more thoughtfully understand if institutions have the resources, ability, or visibility to undertake this proposal.

Workforce Pell Grants

Date, Extent, Duration, and Consequence of Eligibility (§ 600.10(c))

Statute: Section 481(b)(3) of the HEA, as amended by Section 83002(b) of the OBBB, states that after the Governor of a State determines that a program meets specified requirements, the Secretary shall determine whether the program meets additional specified conditions necessary for the program to be considered an eligible workforce program.

Current Regulations: An eligible institution must obtain the Secretary's approval prior to offering title IV, HEA funds for certain educational programs. Currently, this requirement applies to: (1) the first direct assessment program offered by an eligible institution; (2) the first eligible prison education program offered at the first two additional locations where the eligible institution offers such programs; (3) any comprehensive transition and postsecondary program or short-term program; and (4) in cases where an eligible institution's Program Participation Agreement (PPA) includes a condition requiring such approval.

Proposed Regulations: We propose to require that an eligible institution obtain the Secretary's approval to offer an eligible workforce program, if the institution seeks to designate the program as eligible for the Pell Grant Program.

Reasons: Section 481(b)(3) of the HEA, as amended by Section 83002(b) of the OBBB, requires that each eligible

Neither the OBBB nor these proposed regulations contain language specific to an accrediting agency. But during negotiated rulemaking, a negotiator requested that the Department clarify the role that accrediting agencies play in the eligible workforce program approval process. The Department addresses this in our response below. An eligible institution must be able to demonstrate that each program, including eligible workforce programs,—collectively or individually—is included within its grant of accreditation. The Department does not require the accrediting agency to approve each eligible workforce program but an accrediting agency recognized by the Department may establish its own internal processes regarding the approval of eligible workforce programs, which must follow its established review procedures for substantive changes set forth in § 602.22. If an accrediting agency decides to approve one or more eligible workforce programs separately or based on established policies that require eligible institutions to make a substantive change request to add an eligible workforce program, the accrediting agency approval may come before or after approval by the Governor (but prior to Department approval).

Written Arrangements To Provide Educational Programs (§ 668.5(c))

Statute: Section 484(a) of the HEA provides that a recipient of title IV, HEA program funds must be enrolled in an eligible academic program leading to a degree or certificate at an eligible institution.

Current Regulations: Section 668.5 currently sets forth the conditions under which the Secretary will consider eligible programs to include educational programs that are offered by an eligible institution that has a written arrangement, sometimes referred to as a contractual agreement, with an ineligible institution or organization. Under such an agreement, an ineligible institution or organization provides part of the educational program offered by the eligible institution. Generally, an ineligible institution or organization may provide 25 percent or less of an eligible program without approval of the arrangement by the eligible institution's accrediting agency. Moreover, in some cases, the current regulations allow an ineligible institution or organization to provide more than 25 percent but less than 50 percent of an eligible program if the eligible institution offering the program receives approval from its accrediting agency as a substantive change, in accordance with applicable regulations under 34 CFR 602.22.

Proposed Regulations: The Department proposes that an eligible institution may enter into a written arrangement with an ineligible institution or organization to provide a portion of an eligible workforce program only if the ineligible institution does not provide more than 25 percent of the eligible workforce program. Programs under which an ineligible institution or organization provided more than 25 percent of the eligible program would not be considered to be an eligible workforce program.

Reasons: While the statute is silent on the issue of written arrangements, the Department believes that institutions offering eligible workforce programs should have some flexibility to enter into written arrangements with ineligible institutions and organizations, as they currently do with their other eligible programs. However, for written arrangements where 26 to 49 percent of the program is not provided by the eligible institution, the Department is concerned that requiring that such written arrangements be approved by the eligible institution's accrediting agency, as is required for other eligible programs under current regulations, may not be as effective in providing quality assurance for eligible workforce programs.

During negotiated rulemaking, several negotiators expressed concern that the 25 percent limitation could stymie innovation and employer engagement in the development and implementation of eligible workforce programs. One negotiator noted that some eligible institutions may not have the capabilities to offer an eligible workforce program without assistance from ineligible institutions or organizations. The negotiator mentioned that a written arrangement could help an eligible institution start an eligible workforce program without the need to purchase expensive capital equipment of its own, as necessary training on such equipment may be available from an ineligible institution or organization through a written arrangement. The Department responded by stating that it had considered several options in developing the draft regulations, ranging from the less than 50 percent upper limit that some negotiators had proposed, to express prohibition of written arrangements for eligible workforce programs. The 25 percent threshold that was proposed in the draft regulations and agreed to by all negotiators during the committee negotiations strikes a balance between providing institutions with the same flexibility that institutions have under existing policies for other eligible programs but offers additional assurance that the vast majority (75 percent or greater) of the eligible workforce program is provided by the eligible institution.

In proposing these regulations, the Department continues to seek public input on achieving a proper balance between providing eligible institutions with the flexibility to acquire educational resources from outside the institution that can enhance the quality of eligible workforce programs using written arrangements, while also ensuring that standards of quality assurance for the title IV, HEA programs continue be maintained for all types of eligible programs. Thus, we have included a question regarding this proposal under the Directed Questions section in this NPRM.

Eligible Program (§ 668.8(n))

Statute: Section 401(k)(1) of the HEA, added by Section 83002(a) of the OBBB, states that beginning on July 1, 2026, and each subsequent year, the Secretary shall award Pell Grants to eligible students to enroll in eligible workforce programs.

Current Regulations: § 668.8 defines which programs are considered eligible programs for the purposes of the title IV, HEA programs. Beyond the general requirements set forth in § 668.8, § 668.8(n) specifically states that eligible programs include: direct assessment programs, comprehensive transition and postsecondary programs, and prison education programs.

Proposed Regulations: The proposed regulations state that an eligible program includes, solely for the purposes of the Pell Grant Program, an eligible workforce program as defined in 34 CFR 690.92.

Additionally, we propose to make a technical restructuring edit to paragraph (n) due to the increasing number of eligible programs defined under the paragraph. The consensus language contained romanettes in the subparagraphs following subsection (n), however, those subparagraphs should be Arabic numerals because they are at the paragraph level instead of the subparagraph level. We have made that

Reasons: This is a conforming change, made to ensure consistency and alignment of the hierarchical structure throughout the Code of Federal Regulations (CFR). While we propose that the majority of eligible workforce program regulations be included under 34 CFR 690 Subpart H, to ensure that a reader knows that the definition of an eligible program includes an eligible workforce program, we propose to add a reference to eligible workforce programs under this section of the CFR.

Limitations on Remedial Coursework That is Eligible for Title IV, HEA Program Assistance (§ 668.20(b) and (g))

Statute: Section 401(k)(3)(B) of the HEA, added by Section 83002(a) of the OBBB, prohibits an eligible institution from taking into account noncredit or reduced credit remedial coursework (including a course in English as a second language) when determining enrollment intensity and COA for an eligible workforce program offered in credit hours.

Current Regulations: The current regulations prescribe instances when noncredit or reduced credit remedial coursework can (§ 668.20(b)) and cannot (§ 668.20(c) and (d)) be included in a student's enrollment intensity (formerly enrollment status) and COA. For example, a remedial course cannot be below the educational level needed for a student to successfully pursue their program after one year in that course and be included in a student's enrollment intensity (§ 668.20(c)(2)). Also, in order to be included, remedial courses must be at least at the high school level, as determined by the eligible institution, its state legal authority, or its accrediting agency (§ 668.20(c)(3)(ii)).

Proposed Regulations: We propose that an eligible institution may not take into account any noncredit or reduced credit remedial coursework (including a course in English as a second language) when determining enrollment intensity and COA for a student enrolled in an eligible workforce program, as defined under 34 CFR 690.92, that is offered in credit hours.

Reasons: Section 401(k)(3)(B) of the HEA, added by Section 83002(a) of the OBBB, prohibits the inclusion of noncredit or reduced credit remedial coursework to determine enrollment intensity or COA for an eligible workforce program.

Section 401(d)(1) of the HEA states that the “. . . period during which a student may receive Federal Pell Grants shall be the period required for the completion of the first undergraduate baccalaureate course of study being pursued by that student at the institution at which the student is in attendance, except that any period during which the student is enrolled in a noncredit or remedial course of study, as described in paragraph (2), shall not be counted for the purpose of this paragraph.”.

Section 401(d)(2) of the HEA states, “(2) Noncredit or remedial courses; study abroad.—Nothing in this section shall exclude from eligibility courses of study which are noncredit or remedial in nature (including courses in English language instruction) which are determined by the eligible institution to be necessary to help the student be prepared for the pursuit of a first undergraduate baccalaureate degree or certificate or, in the case of courses in English language instruction, to be necessary to enable the student to use already existing knowledge, training, or skills . . .”. However, Section 401(k)(3)(B) of the HEA, added by Section 83002(a) of the OBBB, explicitly states that Section 401(d)(2) of the HEA does not apply to an eligible workforce program. In other words, students enrolled in eligible workforce programs offered in credit hours can only receive Pell Grants for courses that they receive credit for.

The Department clarified during negotiated rulemaking that the prohibition on noncredit courses is not in reference to programs offered using clock hours. The prohibition applies specifically to noncredit courses in credit hour programs. In clock hour programs, whether or not coursework confers academic credit is irrelevant for purposes of the title IV, HEA programs. The Department interprets Sec. 401(d)(1) to apply an exception to the normal requirement that coursework in a credit hour program carry academic credit in order for that coursework to be considered for Title IV purposes.

Student Eligibility (§ 668.32(c))

Statute: Section 401(k)(2)(B) of the HEA, added by Section 83002(a) of the OBBB, states that a student is not eligible for a Pell Grant in an eligible workforce program if the student is enrolled, or accepted for enrollment, in a program of study that leads to a graduate credential, or if the student has obtained a graduate credential.

Current Regulations: The existing Pell Grant Program regulations generally prohibit an individual with a baccalaureate degree or first professional degree from receiving a Pell Grant (§ 668.32(c)(2)(i)(A)).

Proposed Regulations: The proposed regulations clarify that an otherwise eligible student who has obtained a baccalaureate degree can receive a Pell Grant to enroll in an eligible workforce program. The proposed regulations state that a student who is receiving a Pell Grant to enroll in an eligible workforce program may not be enrolled in or accepted for enrollment in a program of study that leads to a graduate credential, nor have attained a graduate credential.

Reasons: Section 401(k)(2) of the HEA states “To be eligible to receive a Pell Grant for enrollment in an eligible workforce program the student may not “be enrolled, or accepted for enrollment, in a program of study that leads to a graduate credential; or . . . have attained such a credential.” Section 401(k)(2) does not explicitly exclude students who possess a bachelor's degree from being eligible to receive Pell Grant funds for enrollment in an eligible workforce program. In doing so, Section 401(k) superseded the ordinary Pell Grant eligibility limitations under Section 401(d)(1) that prohibit students who have already earned a bachelor's degree from receiving Pell Grants. 20 U.S.C. 1070a (limiting eligibility to students who have not completed their “first undergraduate baccalaureate course of study.”)

Students must generally have a bachelor's degree in order to enroll in graduate programs, so the ordinary rule under subsection (d)(1) already excluded students who are enrolled in or admitted to a graduate degree program or already have a graduate degree. It would be unnecessary for Congress to change the ordinary rule, if all that was intended is to prevent graduate students or graduate degree holders from receiving a Pell Grant. As such, by necessary implication, the statute in subsection (d)(1) is supplanted for the purposes of eligibility in the Workforce Pell Grant Program by Section 401(k)(2). In effect, this means that an eligible student for the purposes of this program is: (1) a student who meets all of the other eligibility criteria in Section 401 (such as needs analysis); (2) has not earned a graduate degree, is not admitted to a graduate program, nor is enrolled in a graduate program; and (3) has not exhausted their lifetime Pell Grant eligibility of 12 semesters (or its equivalent) under Section 401 (d)(5). As such, students who already have a bachelor's degree are not disqualified from receiving Pell Grants for eligible workforce programs on that basis alone.

During negotiated rulemaking the Department agreed to provide more graduate credential in the preamble of this NPRM. A graduate credential includes, but is not limited to, a graduate degree such as a master's degree or doctoral degree, a first-professional degree such as a Doctor of Medicine (MD), Doctor of Dental Surgery (DDS), or Juris Doctor (JD), a graduate certificate (including a postgraduate certificate), or another professional credential that is above the undergraduate level. A graduate credential does not include an undergraduate post-baccalaureate certificate.

Although it is not directly relevant to the interpretive task of construing the eligibility criteria in the OBBB related to the Workforce Pell Grant, the Department believes that allowing students with bachelor's degrees to be eligible to receive Pell Grant funds for enrollment in an eligible workforce program is beneficial. The proposed regulation allows otherwise eligible students with bachelor's degrees who require new proficiencies in order to become employed in a new high-skill, high-wage field with the ability to achieve this cost-effectively and in a short period of time. Additionally, because other applicable student eligibility requirements still apply—for example, Lifetime Eligibility Used (LEU) limits on Pell Grant eligibility—the Department believes appropriate safeguards are in place to ensure that Pell Grant funds are not overutilized for this purpose. Under § 690.6(e), LEU is the requirement that a student may receive no more than 6 Scheduled Awards, as determined by the Secretary, which is calculated as a percentage not to exceed 600 percent.

A negotiator also requested the Department add an overview of satisfactory academic progress (SAP) requirements as they relate to eligible workforce programs. Under § 668.32(f) and § 668.34, a student is required to maintain SAP in his or her course of study according to the eligible institution's published standards of SAP. The Department is not proposing to change current SAP regulations, nor are any changes to those regulations required as a result of the OBBB's amendments to the HEA. For any program less than an academic year, including all eligible workforce programs, eligible institutions must evaluate a student's SAP at the end of each payment period. If the eligible institution chooses to have a warning period, 2 it is possible for a student to receive all of their Pell Grant disbursements for the entire eligible workforce program. Alternatively, an eligible institution could choose not to have a warning period but to evaluate a student's academic progress after each payment period; in that case, if a student fails SAP at the end of the first payment period, the student would be ineligible to receive any subsequent Pell Grant disbursements unless they successfully appeal under the eligible institution's SAP appeal policy.

2 2025-26 Federal Student Aid Handbook, ch. 1,—(“Financial aid warning is a status a school assigns to a student who is failing to make SAP. The school reinstates eligibility for aid for one payment period and may do so without a student appeal. This status may only be used by schools that check SAP at the end of each payment period and only for students who were making SAP in the prior payment period for which they were enrolled or who were in the first payment period of their program.”) Available at, https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2025-2026/vol1/ch1-school-determined-requirements .

Definitions (§ 690.2(c))

Statute: Section 401(k)(1) of the HEA, added by Section 83002(a) of the OBBB, states that beginning on July 1, 2026, and each subsequent year, the Secretary shall award Pell Grants to eligible students enrolled in eligible workforce programs.

Current Regulations: 34 CFR 690.2 contains a list of definitions that pertain to the Pell Grant Program.

Proposed Regulations: The proposed regulation adds a cross reference to the definition of an eligible workforce program to this section.

Reasons: This is a conforming change made to ensure consistency and alignment throughout the CFR. While we propose that the majority of the eligible workforce program regulations be under 34 CFR 690 Subpart H, the Department seeks to ensure that readers can easily find the full definition of an eligible workforce program.

Duration of Student Eligibility (§ 690.6(a) and (f))

Statute: Section 401(k)(2)(B) of the HEA, as added by Section 83002(a) of the OBBB, states that a student is not eligible for a Pell Grant for an eligible workforce program if that student is enrolled, or accepted for enrollment, in a program of study that leads to a graduate credential, or if the student that has obtained a graduate credential.

Current Regulations: Section 690.6(a) generally states that a student is only eligible to receive a Pell Grant for the period of time required to complete his or her first undergraduate baccalaureate course of study.

Proposed Regulations: The proposed regulation exempts enrollment in an eligible workforce program from the prohibition of a student having already obtained a baccalaureate degree.

Reasons: This is a conforming change to align with § 668.32(c), to ensure consistency and alignment throughout the CFR. As discussed in detail in the Student eligibility (§ 668.32(c)) section of this preamble, the Department interprets the statutory text to allow an individual with a bachelor's degree to receive a Pell Grant to enroll in an eligible workforce program because Section 401(k)(2)(B) of the HEA, amended by Section 83002(a) of the OBBB, only explicitly prohibits enrolling in or obtaining a credential in a graduate level program.

During negotiated rulemaking, a negotiator requested that the Department inform each student enrolling in an eligible workforce program about their LEU at specific percentages. The Department has considered the negotiator's suggestion but declines to implement it for two reasons. First, the Department already provides information on LEU to all students, so a disclosure specific to eligible workforce programs is not necessary. Comments on the FAFSA Submission Summary inform students of their approximate Pell Grant usage at 50 percent intervals. For example, a student between 100 percent and 150 percent would see a comment reading “The limit to the total amount of Federal Pell Grants that a student may receive is the equivalent of six school years. Based upon information reported to the National Student Loan Data System (NSLDS®) database by the schools you have attended, you have received Pell Grants for the equivalent of between one and one and one-half years.” Second, the Department is concerned that a disclosure such as this could be perceived as a warning to students not to enroll or continue in his or her program, rather than solely an indication of the amount of LEU the student has remaining. The Department prefers that students work directly with their institution's financial aid office regarding their Federal financial aid eligibility. However, the Department committed to providing additional guidance to the community about ensuring that students who enroll in eligible workforce programs receive clear and accurate information that Pell Grants they receive for enrollment in such programs count against their lifetime limits.

Federal Pell Grant Payments From More Than One Institution (§ 690.11)

Statute: Section 401(k)(4) of the HEA, as added by Section 83002(a) of the OBBB, states an eligible student cannot

Current Regulations: Current § 690.11 states that a student is not entitled to receive Pell Grant payments concurrently from more than one eligible institution or from the Secretary and an eligible institution.

Proposed Regulations: The proposed regulations clarifies that a student is not entitled to receive Pell Grant payments concurrently for enrollment in an eligible workforce program and any other educational program at the same or a different eligible institution, including another eligible workforce program.

The proposed regulations also update the title of this section to “Concurrent Federal Pell Grant payments”.

Reasons: This language implements the statutory prohibition on a student receiving a Pell Grant for enrollment in an eligible workforce program and for enrollment in another eligible program at the same time.

Scope and Purpose (§ 690.90)

Statute: Section 401(k)(1) of the HEA, added by Section 83002(a) of the OBBB, states that beginning on July 1, 2026, and each subsequent year, the Secretary shall award Pell Grants to eligible students enrolled in eligible workforce programs, in the same manner and with the same terms and conditions as the Secretary awards Pell Grants to eligible students enrolled in other eligible programs. Section 481(b)(3), as added by Section 83002(b) of the OBBB, defines the requirements for an educational program offered by an eligible institution to be considered an eligible workforce program, which differ from the requirements to be considered an eligible program for the purposes of participation in other title IV, HEA programs set forth in Section 481(b) of the HEA.

Current Regulations: None.

Proposed Regulations: We propose adding a scope and purpose section to 34 CFR 690 Subpart H that will apply to eligible institutions that offer eligible workforce programs. In this section, we clarify that an eligible student enrolled in an eligible workforce program is only eligible for Federal financial assistance under the Pell Grant Program and no other title IV, HEA programs. In other words, students who enroll in an eligible workforce program are not eligible for Direct Loans, a Federal Supplemental Educational Opportunity Grant, Federal Work Study, or other forms of title IV assistance. Furthermore, this section clarifies that, as provided in this subpart, eligible students and eligible institutions that offer Pell Grants to students enrolled in eligible workforce programs are subject to the same regulations and procedures that otherwise apply to title IV, HEA program participants.

Reasons: Every subpart in 34 CFR starts with a scope and purpose section to establish the legal boundaries, intent, and application of the regulations in that subpart, defining what is covered and why the regulations exist. Therefore, we have included a scope and purpose for this new subpart.

In particular, this scope and purpose section highlights the fact that under these proposed rules, a student enrolled in an eligible workforce program would only be eligible for a Pell Grant and would not qualify for any other assistance under title IV of the HEA (such as Direct Loans, a Federal Supplemental Educational Opportunity Grant, and Federal Work Study) on the basis of enrollment in that program. Section 481(b) of the HEA sets forth the requirements for an educational program to be considered an eligible program for the purpose of participation in the title IV, HEA programs, including minimum length requirements. HEA Section 481(b)(3), added by Section 83002(b)of the OBBB, imposes specific requirements for an educational program to be considered an eligible workforce program which differ from those applicable to other eligible programs.

While an educational program has to satisfy a different set of requirements to be considered an eligible workforce program than it must satisfy in order to be considered an eligible program for the purpose of the other the title IV, HEA programs, it is technically possible that an educational program could satisfy the statutory requirements for both an eligible workforce program and eligible program. Specifically, some educational programs of a duration of 300 and 599 clock hours could satisfy the statutory requirements to be both an eligible workforce program and eligible program for the purposes of the Direct Loan program authorized under part B of title IV of the HEA. In such situations, the Department proposes to require an institution to offer such programs as either an eligible workforce program or an eligible program for the purposes of the Direct Loan program, but not both.

The Department takes this position for several reasons. First, the Department believes that allowing programs that include between 300 and 599 clock hours to qualify for both the Pell Grant and Direct Loan programs would run counter to the intent of the statutory provisions of Workforce Pell. Those provisions build on an existing framework for funding job training programs under the Workforce Innovation and Opportunity Act (WIOA), whereby participants enrolling in programs under WIOA choose a program from a State's Eligible Training Provider List (ETPL) and can then qualify for funding to enroll in that program through Individual Training Accounts (ITAs). Under this framework, an eligible workforce program that is included on a State's ETPL would, in many cases, allow students who qualify for Pell Grants to fund their programs fully or partially through that resource, while funding gaps for students whose Pell Grants do not fully cover training expenses, or students who do not qualify for Pell Grants, are addressed through ITAs under WIOA. In cases where these two sources of funding would be available to students enrolled in eligible workforce programs, many students would not need Direct Loan funds to cover their cost of attendance. Indeed, in some of those cases students would not even qualify for Direct Loans if amounts received from these other sources fully covered the student's cost of attendance. Second, although it is technically possible for a short-term program that qualifies for Direct Loans to also comply with the requirements for an eligible workforce program, adding the Department's proposed regulations for eligible workforce programs on top of those required for Direct Loans would result in two entirely different frameworks for the calculation of completion and placement rates for students in the programs depending on each title IV, HEA program funding source. Moreover, institutions wishing to qualify an educational program that provides between 300 and 599 clock hours for eligibility for students to receive funding under both title IV, HEA programs would be subject to a burdensome and complex array of completion and placement rate requirements. It would require one set as mandated for Direct Loan eligibility that is calculated entirely by the institution and substantiated by non-federal auditors, and one set required for eligible workforce program eligibility, as described in Components determined by the Secretary (§ 690.94(c)), that is calculated either solely by the State Governor or by the institution and the Governor. The Department believes that the burden and complexity (for institutions, auditors, and the Department) that would be associated with applying the

This section also clarifies that eligible workforce programs are subject to all other title IV eligibility requirements, consistent with OBBB, unless the Department specifically notes in the regulations that the program is exempt from such requirement. For example (as discussed in Written arrangements to provide educational programs (§ 668.5(c)), we propose that an eligible institution offering an eligible workforce program is prohibited from entering into a written arrangement with an ineligible institution or organization whereby the ineligible institution or organization would provide more that 25 percent of the eligible workforce program.

Definitions—Cohort Period (§ 690.91)

Statute: Section 481(b)(3)(B) of the HEA, added by Section 83002(b) of the OBBB, states that for each award year, the total amount of the published tuition and fees of an eligible workforce program for such year may not exceed the “value-added earnings” of students who received Federal financial aid and who completed the program 3 years prior to the award year. An eligible workforce program's value-added earnings are determined by calculating the difference between the median earnings of such students (as adjusted by the State and metropolitan area regional price parities of the Bureau of Economic Analysis based on the location of such program) and an amount that is equal to 150 percent of the poverty line applicable to a single individual (as determined under Section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) for such year).

Current Regulations: None.

Proposed Regulations: The proposed regulations define the cohort period as the award year that ends three full award years prior to the beginning of the award year for which value-added earnings are being determined.

Reasons: The proposed regulations implement the statutory requirement that the cohort for the value-added earnings calculation is “. . .students who received Federal financial aid under this title and who completed the program 3 years prior to the award year. . .”. For context, the Department will request the median earnings from the Federal agency with earnings data for individuals who completed the eligible workforce program and received a Pell Grant during the cohort period to complete the value-added earnings calculation (see the discussion under § 690.95 for more information).

Section 481(b)(3)(A)(iv)(IV) states that the value-added earnings metric is calculated using the earnings of Pell Grant recipients who “received Federal financial aid under this title and who completed the program 3 years prior to the award year” from eligible workforce programs. It is not possible to calculate value-added earnings for a program that has not yet become eligible because no students could have received Federal financial aid to attend a program that is not yet an eligible program. Therefore, the Department interprets the statute to mean that the value-added earnings metric only becomes relevant once individuals have graduated from an eligible workforce program and enough time has passed to calculate the value-added earnings.

During negotiated rulemaking, several non-Federal negotiators requested that the Department stress in regulation that the cohort period only include individuals that completed the eligible workforce program three “full” award years prior to the current award year. Negotiators believed that unless the Department defined the cohort period in this way, we could have included the earnings of individuals that completed the program but, their earnings would not reflect the full impact of having participated in an eligible workforce program. By establishing a cohort period that is three full award years prior to the current award year, we ensure that a program completer has an amount of time between the completion of the eligible workforce program and obtaining a job that that appropriately captures corresponding increases in income associated with completion of the program. This also means that the 2030-31 award year is the first time the value-added earnings measure can be calculated for programs that begin in the 2026-27 award year due to the fact that such programs will first receive Pell Grants during the 2026-27 award year. The Department ultimately accepted the negotiators' reasoning and adopted the change.

Definitions—Earnings Measurement Period (§ 690.91)

Statute: Section 481(b)(3)(B) of the HEA, as added by Section 83002(b) of the OBBB, states that the value-added earnings for an eligible workforce program are determined by calculating the difference between the median earnings of such students, as adjusted by the State and metropolitan area regional price parities of the Bureau of Economic Analysis based on the location of such program, and 150 percent of the poverty line applicable to a single individual as determined under Section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) for such year.

Current Regulations: None.

Proposed Regulations: The proposed regulations define an earnings measurement period for the value-added earnings calculation as the first full tax year following the award year in which the student completed the eligible workforce program.

Reasons: The proposed regulation implements the statutory requirement that the Department obtain median earnings for eligible workforce program completers. The Department originally proposed to obtain from the Federal agency with earnings data “[t]he median earnings of such students during the most recent tax year for which data is available at the time of the calculation, as adjusted by the State and metropolitan area regional price parities of the Bureau of Economic Analysis based on the location of such programs.” 3 The Department did not define an earnings measurement period in the original proposal sent to negotiators. During negotiated rulemaking, one negotiator asserted that the Department needs to more clearly define the specific tax year for which we would obtain median earnings of eligible workforce program completers, which does not need to be the same tax year for all completers. Another negotiator believed that the tax year in question should be the first full tax year following the award year in which the student completed the eligible workforce program. That timeframe would allow the evaluation of earnings for one full working year after having participated in the eligible workforce program. The negotiator noted that if the Department uses the earnings information from the tax year in which the individual completed the eligible workforce program, it may not be indicative of a full year of earnings potential of the completer. The Department ultimately agreed with the negotiator's assertion that using earnings from the first full tax year following the award year in which the student completed the program is consistent with the statute.

3 Dep't of ED, AHEAD Negotiated Rulemaking Discussion Draft and Draft Amendatory Text, (December 2025), available at— https://www.ed.gov/media/document/2025-ahead-discussion-draft-112625.pdf.

Thus, the proposed regulation defines it here for two reasons: (1) to ensure that all students would have a year's worth of earnings and (2) to clarify the point

In our illustrative example from the prior section (Definitions—Cohort period), the cohort period for the 2030-31 award year includes completers who graduated during the 2026-27 award year. The 2026-27 award year ends June 30, 2027. The first full tax year following the award year is the 2028 tax year (January 1, 2028, through December 31, 2028), therefore, the 2028 tax year is tax year for which the Department would request earnings information for and use as the basis for calculating the program's value-added earnings.

Definitions—In-Demand Industry Sector or Occupation (§ 690.91)

Statute: Section 481(b)(3)(B) of the HEA, as added by Section 83002(b) of the OBBB, states that the term in-demand sector or occupation has the meaning given in Section 3 of WIOA. Section 3 of WIOA defines that term to mean (i) an industry sector that has a substantial current or potential impact (including through jobs that lead to economic self-sufficiency and opportunities for advancement) on the State, regional, or local economy, as appropriate, and that contributes to the growth or stability of other supporting businesses, or the growth of other industry sectors; or (ii) an occupation that currently has or is projected to have a number of positions (including positions that lead to economic self-sufficiency and opportunities for advancement) in an industry sector so as to have a significant impact on the State, regional, or local economy, as appropriate.

Current Regulations: None.

Proposed Regulations: The proposed regulation defines an in-demand industry sector or occupation identically to how that term is defined in Section 3 of WIOA.

Reasons: The Department is required by law to use the definition of in-demand industry sector or occupation as defined under WIOA. This definition will be used by Governors to decide whether or not to approve a program under § 690.93. We use the term “in-demand industry sector or occupation” under § 690.93(a)(1), which states that an eligible workforce program is (in part) a program that “provides an education aligned with the requirements of high-skill, high-wage (as identified by the State pursuant to Section 122 of the Carl D. Perkins Career and Technical Education Act (20 U.S.C. 2342)), or in-demand industry sectors or occupations[.]” The Department also proposes using the term in § 690.93(b)(1)(ii) which states that a Governor must have a written policy for determining whether a program meets the hiring requirements of employers in an in-demand sector or occupation and that the program prepares students for such employment.

Definitions—Governor (§ 690.91)

Statute: Section 481(b)(3)(B) of the HEA, as added by Section 83002(b) of the OBBB, states that Governor means the chief executive of a State. Section 103 of the HEA defines State to mean “in addition to the several States of the United States, the Commonwealth of Puerto Rico, the District of Columbia, Guam, American Samoa, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and the Freely Associated States.” Section 103 of the HEA further defines Freely Associated States to mean “the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau.”

Current Regulations: None.

Proposed Regulations: We propose to define Governor as (1) the chief executive of a State or outlying area as defined under Section 3 of WIOA or (2) if an eligible institution is located on Tribal lands, the Tribal government.

Reasons: To the extent possible, the Department has sought to align eligible workforce programs with pre-existing definitions and concepts under WIOA; therefore, we have proposed to use the definition of Governor under WIOA. The Governor's approval is the first step in the full approval process for an eligible workforce program.

The chief executive of a State is the governor of one of the 50 States and mayor of the District of Columbia. The chief executive of an outlying area is the highest public official in the U.S. Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and the Republic of Palau.

Traditionally, for purposes of the title IV, HEA programs, Tribes have had autonomy to make decisions regarding the authorization of postsecondary eligible institutions. See 34 CFR 600.9(a)(2)(ii). The proposed language would provide Tribes the ultimate authority over determinations of approved programs. Tribes would still need to consult with the State board, as required under proposed § 690.93(a) in order to approve the program. The Department believes this compromise achieves the goal of maintaining Tribal sovereignty over these decisions while also ensuring State boards are consulted as required by the statute.

A governor can designate a public official in the State or outlying area, including someone at the State workforce or education department, the State agency overseeing workforce programs to make approval decisions on behalf of the governor. A governor must inform the Department of the designated office through a process as determined by the Secretary.

Definitions—Recognized Postsecondary Credential (§ 690.91)

Statute: Section 481(b)(3)(B) of the HEA, added by Section 83002(b) of the OBBB, states that “recognized postsecondary credential” has the meaning given in Section 3 of WIOA.

Current Regulations: None.

Proposed Regulations: We propose to define “recognized postsecondary credential” as a credential consisting of an industry-recognized certificate or certification, a certificate of completion of a Registered Apprenticeship under 29 CFR part 29, a license recognized by the State involved or Federal Government, or an associate or baccalaureate degree.

Reasons: The training and instruction that an apprentice receives through a Registered Apprenticeship program are designed to provide them with the knowledge necessary to obtain a license. Additionally, the Department is required by law to use the definition of a recognized postsecondary credential as contained in WIOA; however, we amended the definition based on the recommendation of a negotiator, adding the word “Registered” in front of apprenticeship. 29 CFR part 29 establishes the procedures for an apprenticeship to be registered with the Department of Labor's Office of Apprenticeship, and the two terms are synonymous under the WIOA statute and regulations. Therefore, the Department agreed with the rulemaking committee that a certificate, as defined under 29 CFR 29.2, that a student receives from a Registered Apprenticeship would be a recognized postsecondary credential.

A negotiator also requested that the Department clarify the portion of the definition that states a recognized postsecondary credential can be “a license recognized by the State involved or Federal Government.” For context, the “recognized postsecondary credential” is a part of the Governor's approval process of the program under § 690.93(a)(3). The Governor must ensure that the program either (1) leads to a recognized postsecondary credential that is stackable and portable across more than one employer; or (2) prepares students for employment in an occupation for which there is only one

Several elements of this definition warrant additional discussion. Under the definition of an “educational program” in 34 CFR 600.2, in order to qualify for any type of title IV, HEA program funds, a program must lead to “an academic, professional, or vocational degree, or certificate, or other recognized educational credential . . .” This credential may not be the same as the “recognized postsecondary credential” conferred upon completion of both educational requirements and non-academic requirements such as on-the-job training, work experience, or a licensure exam. The Department understands that licensure for employment in an occupation generally is not granted by the eligible institution upon completion of a program. Instead, licensure is typically granted by a Federal, State or local government, licensure body, or association, and the education a student receives as part of an eligible program may meet only the educational requirements for a license. Similarly, a Registered Apprenticeship program requires a related instruction component that may be met by an eligible workforce program, but the program also requires a substantial amount of on-the-job learning with an employer, which may occur over several years. In these cases where the education included in an eligible workforce program meets the educational requirements for a recognized postsecondary credential but does not meet all the requirements for such a credential, the program nonetheless fulfills the requirement to lead to a recognized postsecondary credential under proposed 34 CFR 690.93(a)(3)(i). This is because it is necessary to obtain the educational component in order to obtain licensure. Additional discussion of this concept as it pertains to Registered Apprenticeship programs can be found under the section Components determined by Governors (§ 690.93(g)).

Definitions—State Board (§ 690.91)

Statute: Section 481(b)(3)(B) of the HEA, as added by Section 83002(b) of the OBBB, states that State board has the meaning given in Section 3 of WIOA.

Current Regulations: None.

Proposed Regulations: We propose to define State board to mean the State workforce development board established under Section 101 of WIOA and 20 CFR 679 Subpart A.

Reasons: The Department is required by Section 481(b)(3)(B) of the HEA, added by Section 83002(b) of the OBBB, to use the definition of State board as contained in WIOA. The Governor would be required to consult with the State board in making his or her decision whether to approve a workforce program. Ultimately, the Governor would need to attest to having consulted with the State board on the certification form developed by the Secretary.

Additionally, we propose making a technical correction due to the incorrect cross-reference. The consensus language referenced 34 CFR 679 Subpart A, but the correct reference here is 20 CFR 679 Subpart A. We have made that technical correction in the amendatory language.

Definitions—Tuition and Fees (§ 690.91)

Statute: Section 481(b)(3)(A)(iv)(IV) of the HEA, as added by Section 83002(b) of the OBBB, states that for each award year, the total amount of the published tuition and fees of the program for such year is an amount that does not exceed the value-added earnings of students who received Federal financial aid and who completed the program 3 years prior to the award year.

Current Regulations: None.

Proposed Regulations: We propose to define tuition and fees to mean the institutional charges for an eligible workforce program.

Reasons: As set forth above, Section 481(b)(3)(A)(iv)(IV) of the HEA, added by Section 83002(b) of the OBBB, limits the total amount of tuition and fees that an eligible institution may charge to students enrolled in an eligible workforce program. Therefore, it is necessary for the Department to define what constitutes tuition and fees. The Department chose to define tuition and fees to mean “the institutional charges for an eligible workforce program” because such charges include those direct education related costs which must be paid to the institution for enrollment in an educational program. Institutional charges do not include living expenses such as food, housing, and transportation. The concept of “institutional charges” has a long regulatory history and has applications throughout the general provisions regulations for the title IV, HEA programs and will be understandable to financial aid staff at schools who are accustomed to the concept. 4 The concept of “institutional charges” also has the advantage of including most fees charged by institutions, but excluding discretionary expenses that such as tickets to concerts or athletic events. Discretionary expenses are not fixed nor are they controlled by the institution, so such expenses would not be considered as part of an institution's compliance with the value-added earnings calculation. We note that the concept of institutional charges traditionally includes food and housing if contracted with the institution; however, for purposes of this definition we are only referring to the published tuition and fee portion of institutional charges associated with the eligible workforce program. This is because the statute refers to tuition and fees, which ordinarily means costs for the educational services provided by the institution.

4 Federal Student Aid Handbook—Volume 4, Chapter 2— https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2025-2026/vol4/ch2-disbursing-title-iv-funds.

As set forth in § 690.94(d), on a yearly basis, the Secretary must confirm that each eligible workforce program complies with the requirement that the program's published tuition and fees do not exceed the value-added earnings of the eligible workforce program. To enable the Secretary to make this determination, under proposed § 690.94(b)(2), the eligible institution would be required to report the published tuition and fees for an eligible workforce program. To collect information regarding tuition and fees charged by the eligible institution to students for enrollment in an eligible workforce program, the Department may be able to utilize the reporting requirements under the current regulations at § 668.408(a)(2)(vi) or our consensus language from the Student Tuition and Transparency System (STATS) and Accountability rulemaking at § 668.406(a)(2)(iv). The Department will provide sub-regulatory guidance to institutions on the reporting of tuition and fees. Additionally, under proposed § 690.95(f), the eligible institution must provide, upon request, evidence satisfactory to the Secretary that its published tuition and fees do not exceed the published value-added earnings for that award year.

Eligible Workforce Program—Program Length Limitations (§ 690.92(a) and (b)

Statute: Section 481(b)(3)(A) of the HEA, as added by Section 83002(b) of the OBBB, states that an eligible workforce program must be at least 150 clock hours of instruction, but less than 600 clock hours of instruction, or an equivalent number of credit hours and be offered by an eligible institution during a minimum of 8 weeks, but less than 15 weeks.

Current Regulations: None.

Proposed Regulations: The proposed regulation establishes the minimum and

Reasons: The Department proposes these limitations because Section 481(b)(3)(A) of the HEA, as added by Section 83002(b) of the OBBB, explicitly restricts the types of academic progress measurements for eligible workforce programs to credit and clock hours and establishes clear limits on both the length of time in which an eligible workforce program can be offered and the number of credit or clock hours that may be included in such program.

Rather than explicitly provide the amount of credit hours that may be included in an eligible workforce program, the statutory language states that a program offered in credit hours must be the equivalent of least 150 clock hours of instruction, but less than 600 clock hours of instruction. Section 481(b) of the HEA, when establishing minimum requirements for credit or clock hours in eligible programs, has done so using ratios of 37.5 clock hours to each semester hour and 25 clock hours to each quarter hour. Therefore, to determine the minimum and maximum number of credit hours for an eligible workforce program, we divided 150 and 599 by 37.5 for programs that use semester and trimester hours and by 25 for programs that use quarter hours. This method is also consistent with established instructional measurement equivalencies under § 668.8(d)(1)(ii) and (d)(2)(ii). Therefore, the equivalent number of credit hours for 150 to 599 clock hours is 4 to 15 semester or trimester hours or 6 to 23 quarter hours.

During negotiated rulemaking, several negotiators requested that the Department expand the duration of an eligible workforce program beyond 14 weeks. The Department noted that the statute is clear that the duration of an eligible workforce program is a minimum of 8 weeks, but less than 15 weeks. In other words, a program cannot last or exceed 15 weeks, therefore, the Department is proposing a 14-week maximum duration. The Department lacks the statutory authority to further extend the maximum allowable length of a program.

For all eligible programs, “a week of instructional time” is defined in two ways under 34 CFR 668.3(b). The term can mean any period of seven consecutive days in which at least one day of regularly scheduled instruction or examinations occurs, or, after the last scheduled day of classes for a term or payment period, at least one scheduled day of study for examinations occurs. For a program offered using asynchronous coursework, it can also mean any period of seven consecutive days in which the institution makes available the instructional materials, other resources, and instructor support necessary for academic engagement and completion of course objectives. This period must also be one in which the institution expects enrolled students to perform educational activities demonstrating academic engagement during the week. The Department proposes, for purposes of consistency and integrity in the title IV, HEA programs, to use this definition in the context of eligible workforce programs. The HEA, as amended by the OBBB, does not require a program to run for a sequential time period, therefore, it is acceptable for an eligible workforce program to have non-sequential weeks of instructional time, as defined in the previous paragraph. The program would be considered an eligible workforce program as long as the weeks of instructional time used to determine the students' Pell Grant eligibility do not exceed a total of 14 weeks. For example, non-sequential weeks of coursework that occur over a year but only include 14 weeks of instructional time (as defined under 34 CFR 668.3(b)) applicable to the student's Pell Grant eligibility is acceptable.

We also understand that in rare instances some students may take slightly longer than 14 weeks of instructional time to complete their eligible workforce program. This could be due to illness or other unforeseen circumstances in the student's life. An individual student may take longer than the published duration of the eligible workforce program; however, this cannot be the norm for most students. If most students in the program take more than 14 weeks of instructional time to complete the program, then the program is not less than 15 weeks of instructional time, and the school's program length must be adjusted accordingly. This ensures that institutions are not able to circumvent the maximum length requirement by declaring a course to be 14 weeks or less, when in practice it takes most students longer than that to complete it. At the same time, this approach provides flexibility such that institutions may provide flexible arrangements to students who have difficult life circumstances unrelated to the course.

Eligible Workforce Program—Prohibition on Offering Correspondence Courses, Study Abroad, and Direct Assessment Coursework (§ 690.92(c))

Statute: Section 481(b)(3)(A)(ii) of the HEA, as amended by Section 83002(b) of the OBBB, states that “ a program is an eligible program for purposes of the Workforce Pell Grant program under section 401(k) only if it is not offered as a correspondence course. . .”. Section 401(k)(3)(B) of the HEA, as added by Section 83002(a) of the OBBB, provides that the provisions of subsection (d)(2) of the same section, which allow for the consideration of study abroad coursework in Pell Grant eligibility calculations, shall not be applicable to eligible workforce programs. Section 481(b)(3)(A) of the HEA, added by Section 83002(b) of the OBBB, outlines what makes a workforce program eligible for Pell Grant funds. Section 481(d) of the HEA provides that the term “eligible program” includes an instructional program that, in lieu of credit hours or clock hours as the measure of student learning, utilizes direct assessment of student learning or the direct assessment of student learning by others.

Current Regulations: None.

Proposed Regulations: The proposed regulation prohibits an eligible workforce program from offering correspondence courses, coursework as part of a study abroad program, or credit or clock hour equivalencies that are part of a direct assessment program.

Reasons: The Department believes that the statute explicitly prohibits eligible workforce programs from offering correspondence courses and study abroad coursework. Section 481(b)(3)(A)(ii) of the HEA, as amended by Section 83002(b) of the OBBB, states that “ a program is an eligible program for purposes of the Workforce Pell Grant program under section 401(k) only if it is not offered as a correspondence course . . .”. In addition, Section 401(k)(3)(B) of the HEA, as amended by Section 83002(a) of the OBBB, states that “ the provisions of subsection (d)(2) shall not be applicable to eligible workforce programs. ” Section 401(d)(2) of the HEA allows study abroad programs to receive Pell Grants, but since this provision is excluded for eligible workforce programs, this means eligible workforce programs are prohibited from offering study abroad. Furthermore, although direct assessment programs are required to

Eligible Workforce Program—Requirements for Approval by the Governor (§ 690.92(d))

Statute: Section 481(b)(3)(A)(iii) of the HEA, as added by Section 83002(b) of the OBBB, states that the Governor of a State determines whether a program meets certain requirements to qualify as an eligible workforce program.

Current Regulations: None.

Proposed Regulations: The proposed regulation requires that an eligible workforce program be approved by the Governor of a State through a process meeting the requirements under § 690.93.

Reasons: Section 481(b)(3) of the HEA, added by Section 83002(b) of the OBBB, explicitly states that the Governor of a State, after consultation with the State board, shall determine whether a program meets certain requirements to qualify as an eligible workforce program. States have a major role in the program approval process because they are well positioned to identify high-skill, high-wage, and in-demand sectors or occupations needed within the State and understand the hiring requirements of employers within these industries and occupations. The Department interprets this text to mean that the Governor of a State must approve each eligible workforce program. For more information on the Governor's approval process, see § 690.93 of the Significant Proposed Regulations section.

Eligible Workforce Program—Requirements for Approval by the Secretary (§ 690.92(e))

Statute: Section 481(b)(3)(A)(iv) of the HEA, as added by Section 83002(b) of the OBBB, states that after the Governor of a State determines that a program meets certain requirements, the Secretary shall determine whether the program meets other conditions to be considered an eligible workforce program.

Current Regulations: None.

Proposed Regulations: The proposed regulation requires that an eligible workforce program meet the requirements established by the Secretary as described in § 690.94. The proposed regulations outline the requirements an eligible workforce program must meet, as follows. The program must be offered by an eligible institution and must exist for at least 12 months before the Secretary determines whether the program qualifies as an eligible workforce program. The program must have a verified completion rate of at least 70 percent each award year, within 150 percent of the normal time for completion. The program must have a verified job placement rate of at least 70 percent each award year, measured 180 days after completion. The total amount of the published tuition and fees of the program for such year is an amount that does not exceed the value-added earnings of students who received Federal financial aid under this title and who completed the program 3 years prior to the award year. Earnings are determined by calculating the difference between the median earnings of such students, as adjusted by the State and metropolitan area regional price parity of the Bureau of Economic Analysis based on the location of such program, and 150 percent of the poverty line for a single individual for the appropriate tax year.

Reasons: Section 481(b)(3) of the HEA, as added by Section 83002(b) of the OBBB, explicitly states that after the Governor of a State determines that a program meets the requirements, then the Secretary determines if the program meets other conditions to be considered an eligible workforce program. The Department interprets this text to mean that the Secretary must approve each eligible workforce program. For more information on the Secretary's approval process, see section § 690.94 of the Significant Proposed Regulations section.

Eligible Workforce Program—Value-Added Earnings (§ 690.92(f))

Statute: Section 481(b)(3)(A)(iv)(IV) of the HEA, as added by Section 83002(b) of the OBBB, states that for each award year, the total amount of the published tuition and fees of an eligible workforce program for such year is an amount that does not exceed the value-added earnings of students who received Federal financial aid under this title and who completed the program 3 years prior to the award year.

Current Regulations: None.

Proposed Regulations: The proposed regulation requires that an eligible workforce program comply with the annual value-added earnings requirements described under § 690.95.

Reasons: Section 481(b)(3)(A)(iv)(IV) of the HEA, as added by Section 83002(b) of the OBBB, states that “. . . for each award year, the total amount of the published tuition and fees of the program for such year is an amount that does not exceed the value-added earnings of students who received Federal financial aid under this title and who completed the program 3 years prior to the award year.” For more information on the value-added earnings requirements, see section § 690.95 of the Significant Proposed Regulations section.

Eligible Workforce Program—Limitations Due to Actions Taken by the Secretary (§ 690.92(g))

Statute: Section 487 of the HEA allows the Department to establish criteria for eligible institutions to follow as part of the eligible institution's PPA to participate in the title IV, HEA programs.

Current Regulations: None.

Proposed Regulations: The proposed regulation prohibits eligible institutions from offering an eligible workforce program if they have been subject to any suspension, emergency action, or termination of programs during the five years preceding the date of the determination.

Reasons: Eligible institutions that have faced suspension, emergency action, or termination of programs within the past five years are at a higher risk for compliance issues because they have had compliance issues in the past. Allowing these eligible institutions to offer eligible workforce programs has a higher likelihood of exposing students to programs that may not meet quality or financial responsibility standards. This limitation has been used in other programs, for example, the prison education program under § 668.236(a)(5)(i), to safeguard program integrity and protect students and Federal funds.

Components Determined by Governors (§ 690.93(a))

Statute: Section 481(b)(3)(A)(iii) of the HEA, added by Section 83002(b) of the OBBB, states that after consultation with the appropriate State board, the Governor must approve the program.

Current Regulations: None.

Proposed Regulations: The proposed regulation requires that prior to the Secretary's review of compliance with

Reasons: This section very closely mirrors the statute, with minor, non-substantive technical edits to account for regulatory formatting. The Department contemplated providing additional regulatory context to the statutory framework in the HEA; however, ultimately, we decided against doing so in § 690.93(a). We believe that Governors may be currently implementing several of the requirements enumerated in the proposed regulations through other programs in their States authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (Perkins V) and WIOA; therefore, the Department proposes to provide Governors the flexibility to establish policies that best serve students in their specific States. While Governors would have substantial flexibility, we propose under § 690.93(b) that Governors would be required to publish written policies that would be used to evaluate if a program meets the four criteria and provide additional context in the regulations as to what these policies must incorporate.

We note that in cases where students enroll in an eligible workforce program through distance education and said students are located in a State other than a State where the Governor approved the program, the program may be subject to a bilateral agreement. For more information on bilateral agreements, please see § 690.93(h) of the Significant Proposed Regulations section.

Finally, during negotiated rulemaking, a negotiator asked the Department to encourage Governors to publish lists of eligible workforce programs on a publicly accessible website. The Department agrees with the negotiator's suggestion, and although we are not requiring this as part of our regulations, we strongly encourage Governors to maintain and publish a list of eligible workforce programs in their State. Governors may wish to use the existing processes established to disseminate the State list of WIOA eligible training providers to members of the public, as described in 20 CFR 680.500, or update those processes to more effectively disseminate both eligible workforce programs qualifying for Pell Grant funds and WIOA eligible training providers to the public.

Components Determined by Governors (§ 690.93(b))

Statute: Section 481(b)(3)(A)(iii) of the HEA, added by Section 83002(b) of the OBBB, requires the Governor to approve a program.

Current Regulations: None.

Proposed Regulations: The proposed regulations require that the Governor shall establish, after consultation with the State board, a process for an institution to request a determination that a program meets the requirements of § 690.3(a) and that is publicly available and includes the criteria the Governor will use to determine if a program meets each of the requirements. This shall include the State's methodology to determine and periodically review which occupations and industry sectors are high-skill, high-wage (as identified by the State pursuant to Section 122 of the Carl D. Perkins Career and Technical Education Act (20 U.S.C. 2342)), or in-demand, including the competencies needed in such industries and occupations, as identified by the State pursuant to Section 102 of WIOA, and where the list of such occupations and sectors will be made publicly available. The Department encourages States to make the list of such occupations and sectors publicly available in searchable and easy to navigate formats. The aforementioned periodic review must be done not less than every two years concurrent with development and modification of the State Plan under Section 102(c) of WIOA. In addition, we encourage Governors to include such lists in their State's WIOA State Plan as soon as possible.

The Governor's process must include a written policy for determining whether a program meets the hiring requirements of employers in the high-skill, high-wage, or in-demand sectors and occupations for which the program prepares students for employment. The review must consider whether the expected competencies for which the recognized postsecondary credential intends align with the competencies needed in such high-skill, high-wage, or in-demand sectors and occupations. Further, these determinations must incorporate direct input from employers, which may be secured from the state board and local workforce development boards, industry or sector partnerships, sponsors of Registered Apprenticeship programs, joint labor-management partnerships, or through other methodologies established by the State.

The process would be required to include a written policy for determining if a credential is stackable and portable. The process must also document connections to additional credentials, consider, if available, real-time labor market information and other data showing whether students have obtained additional credentials through career pathways, and include a process for employer validation.

The proposed process must include a written policy for institutions to establish that an eligible workforce program will ensure the award of academic credit toward a certificate or degree program upon a student's successful completion of the eligible workforce program and enrollment in such certificate or degree program. Furthermore, it requires that such credit will be accepted at one or more eligible institutions through written agreements, including established articulation agreements, transfer-of-credit agreements, consortium or partnership agreements, or similar arrangements.

The process must include the information an institution must submit to the Governor to assess an eligible workforce program on the criteria

The proposed regulations require that the Governor's process includes the timeline for the Governor's consultation with the state board and a determination that a program meets the requirements. There also must be a process for an institution to appeal that determination, and such process must include clear, transparent and timely procedures that are applied consistently and equitably at all eligible institutions. Finally, the process would need to include an attestation affirming that a State board consultation occurred.

Reasons: The Department believes it is important for Governors to have written policies on how programs would be approved and transparency when policies change. Written policies establish a framework for consistent and standardized program approval. Written policies would also make the approval process clear and transparent for eligible institutions by outlining what information is necessary for said institutions to submit its program to the Governor for approval.

We note that these proposed requirements for written policies are all based on the statutory requirements contained in the regulations under § 690.93(a) and are cross-referenced to the written policies below with the requirements under § 690.93(a). We encourage Governors to post all written policies prominently to appropriate websites and to use plain language.

Included in the first component of the proposed process is the State's methodology for determining and periodically reviewing high-skill, high-wage, or in-demand sectors or occupations as required by § 690.93(a)(1). During negotiated rulemaking, the Department accepted a recommendation from several negotiators to align the periodic review process with development and modification of the WIOA State Plans. WIOA State Plan development or modifications include reviews of occupations and sectors that occur every two years, which would eliminate overlap or redundancy between WIOA and title IV regulations. The list of occupations must be posted publicly, and as noted above, the Department encourages the list to be posted prominently and in plain language.

The second component that would require a written policy for how the Governor will determine whether the program meets the hiring requirements of employers is tied to the requirements proposed under § 690.93(a)(2). We propose for a State's policy to incorporate consideration of the alignment between the expected competencies for which the recognized postsecondary credential intends and the competencies needed in the relevant sectors and occupations to ensure students are equipped with the skills needed to obtain employment. Additionally, the proposed regulations require direct input from employers because employers can speak directly to their own hiring needs. We note that this information could be obtained through many methodologies as determined by the Governor, including from the State board. Governors are already required by statute to consult with the State board; therefore, we believe this would not be an overly burdensome policy to establish. The proposed regulation provides Governors with broad latitude to determine how these requirements should be incorporated in their written policy.

The third component, requiring a written policy for how the Governor will determine if a credential obtained upon completion of the program is stackable and portable, is tied to requirements proposed under § 690.93(a)(3). The written policy must include a means to establish if the credential has documented connections to additional credentials. The policy must also consider, if available, data showing whether students have obtained additional credentials through career pathways and real-time labor market information, where available, and include a process for employer validation. Further, as many states have established strategies to assess credentials and identify “credentials of value”, these components are commonly used evidence for establishing stackability and portability. 5 We received several proposals from negotiators during negotiated rulemaking to define “stackable” and “portable.” As noted throughout this preamble, we attempted to align as much of the proposed regulations as possible with WIOA. WIOA does not define stackable or portable. The Employment and Training Administration at the Department of Labor released guidance in its publication entitled: Understanding Postsecondary Credentials in the Public Workforce System, 6 that provides a sub-regulatory definition of stackable and portable credentials that may be useful for States as they develop their written policies.

5 Advance CTE, The State of Career Technical Education, (2025), available at, https://careertech.org/wp-content/uploads/2025/09/StateofCTE_Credentials_2025_FullReport.pdf.

6 Understanding Postsecondary Credentials in the Public Workforce System— https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEN/2020/TEN_25-19.pdf.

The fourth component that would require a written policy to ensure that academic credit will be awarded to students, and that credit will be accepted at one or more eligible institutions and is tied to requirements under proposed § 690.93(a)(4). We accepted a suggestion from multiple negotiators that the arrangements should be written and ratified through a formal arrangement between eligible institutions. A formalized arrangement is important for consistency, clarity, and transparency for students. Note that under HEA Sec. 481(b)(3)(A)(iii)(IV) the written policy can be within the same eligible institution offering the eligible workforce program.

The fifth component would require Governors to have a process to inform eligible institutions what to submit to the Governor in order for the Governor to calculate placement and completion calculations. This is tied to requirements under § 690.94(a)(2) and (b)(1). These provisions require specific annual placement and completion rates for eligible workforce programs. The Department believes that it is important for Governors to clearly publish what information is necessary for them to calculate the completion and placement rates because it would standardize the process and make the data expectations clear for the stakeholders.

The sixth component, which is explained within the regulatory text itself, requires Governors to provide a process and timeline for consultation with the State board and a process for an appeal of a program's denial. This policy would provide clear, transparent, and timely procedures for eligible institutions which can be applied consistently and equitably across all eligible institutions.

Finally, the Governor would be required to include in their attestation that the Governor consulted with the State board. This requirement is intended to provide a written record of the consultation with the State board.

Components Determined by Governors (§ 690.93(c))

Statute: Section 481(b)(3)(A)(iii) of the HEA, added by Section 83002(b) of the

Current Regulations: None.

Proposed Regulations: The proposed regulations require that the Governor shall not approve a program until it meets all the requirements of paragraph (a) and paragraph (b) of § 690.93.

Reasons: The proposed regulations are designed to ensure that a Governor has established written and published policies for eligible institutions to follow prior to reviewing a program and has reviewed each program based on those policies prior to approval.

Components Determined by Governors (§ 690.93(d))

Statute: Section 481(b)(3)(A)(iii) of the HEA, added by Section 83002(b) of the OBBB, states that after consultation with the appropriate State board, the Governor must determine whether to approve the program.

Current Regulations: None.

Proposed Regulations: The proposed regulation requires that the Secretary documents the Governor's approval and determination that a program meets all applicable requirements by accepting a certification by the Governor that includes the following—

(1) The name of the program;

(2) The 6-digit Classification of Instructional Programs (CIP) Code of the program;

(3) The Standard Occupational Classification (SOC) codes(s) for the occupation(s) for which the program prepares individuals for employment;

(4) A signed statement that the program was approved by the Governor and that the program currently meets, and has met for the 12 months immediately preceding the certification, the requirements described in § 690.93(a);

(5) The date the eligible workforce program was approved;

(6) If applicable, a certification that the State determined that the program meets the alternative completion and placement standards under 34 CFR 690.94(a)(3)(i);

(7) An agreement that, upon request of the Secretary of Education or Secretary of Labor, the Governor will make available to the Secretary of Education and Secretary of Labor documentation of its process for making the determination in paragraph (a) of § 690.93;

(8) An agreement that the Governor will inform the Department of Education and Department of Labor and the eligible institution within 15 calendar days of its final decision to withdraw approval of the eligible workforce program;

(9) A certification that the Governor takes into consideration the cost of the program and the anticipated wages of the industry or occupation prior to the initial determination of the program's value-adding earnings is made under § 690.95; and

(10) Such other information as the Secretary of Education or Secretary of Labor may require.

Reasons: The Secretary must know the name of the program in order to fulfill the statutory and regulatory requirements, including but not limited to being able to approve the correct program once an eligible institution's application is received for review by the Secretary of Education under § 690.94. We must obtain the CIP code and the 6-digit SOC code to fulfill the statutory and regulatory requirements, including but not limited to, enforcing the two-year prohibition on a program regaining eligibility due to loss of eligibility due to a program's failure to meet the placement and completion rates under § 690.97(a). Additionally, such data elements facilitate important information sharing about how to find training programs that prepare individuals for in-demand occupations.

The Department proposes to collect a signed statement that the program meets, and has met for the 12 months immediately preceding the certification, all of the requirements under § 690.93(a) and we propose to collect the date the eligible workforce program was approved. This requirement is necessary because Section 481(b)(3)(A)(iv)(I) of the HEA requires that the program be offered by the eligible institution “for not less than 1 year prior to the date on which the Secretary makes a decision. . .”. Note that this proposed regulation would not require the Governor's process to have been in place to assess the requirements under 690.93(a) for one full year, but merely requires the Governor to validate that, at the time of the determination, the program had met those criteria for at least the 12 months prior.

The Department also proposes that an eligible workforce program must submit placement and completion rates to have the program approved by the Secretary. Under proposed § 690.94(a)(2)(i), for the 2026-27, 2027-28, and 2028-29 award years only, as determined through a certification from the Governor, based on the Governor's analysis using administrative data, including wage records, a program use alternative data to assess completion and placement rates. After the 2028-29 award year, the placement and completion rate calculations would be different. The alternative data are intended to provide an “on ramp” to States and institutions that do not yet have the administrative data to conduct the full placement and completion rate calculations. We also discuss the rates in further detail in the § 690.94(a) section of this preamble.

The Department of Education and the Department of Labor will work in close partnership to implement the eligible workforce program process. Neither Department intends to dictate a state's written policies or approval process of an eligible workforce program. However, to ensure program integrity, both Departments must reserve the right to request additional documentation from the Governors, if necessary, regarding the policies and program approval. In addition, both Departments need to know within 15 calendar days of a Governor's final decision to withdraw approval of an eligible workforce program. We note that the Department of Education would not need to be informed of an ongoing investigation; we only need to be informed of the Governor's final decision to withdraw approval of the program.

As noted in the definition of cohort period under § 690.91, the first time the Department would calculate the value-added earnings under § 690.95 is during the 2030-31 award year. During negotiated rulemaking, a negotiator requested that the Department develop an alternative method to calculate the value-added earnings prior to 2030-31. The statute says that the value-added earnings is calculated based on the earnings of individuals that completed the program three years prior to the current year, therefore, the Department does not have the authority to require institutions to implement the value-added earnings prior to 2030-31.

During negotiated rulemaking, the Department accepted a proposal from one of the negotiators to add a requirement for the Governor to certify that he or she has taken into consideration the cost of the program as it compares to the anticipated wages of the industry or occupation prior to the Department's determination of the program's value-adding earnings. The negotiator argued that such an evaluation was necessary given the time between the establishment of a program and the first time that the value-added earnings for the program would be calculated, during which there would be no required evaluation of the economic value of the program to students. The Department believes that such an evaluation is likely to occur even without this requirement and that it is

Finally, because these are Federal funds, the Department may request other information to ensure program efficacy and integrity. This is a provision we have incorporated into many of our regulations. For example, in the application process for prison education programs under § 668.239(b)(9) we state that the Secretary can request “[s]uch other information as the Secretary deems necessary.”

Components Determined by Governors (§ 690.93(e) and (f))

Statute: Section 481(b)(3)(A)(iii) of the HEA, added by Section 83002(b) of the OBBB, states that after consultation with the appropriate State board, the Governor must determine whether to approve the program.

Current Regulations: None.

Proposed Regulations: The proposed regulations require that the Governor's approval, under paragraph (a) of this section, ends at the expiration of the eligible institution's PPA. We also propose that prior to the expiration of an eligible institution's PPA, the Governor must provide, through a process determined by the Secretary, a certification of continued approval of each eligible workforce program offered by the eligible institution.

Reasons: The Department seeks to ensure that the Governor remains active in the oversight and accountability of an eligible workforce program. After the Governor approves the program, the eligible institution would apply to the Secretary for approval. After the Secretary approves the program, it would become an eligible workforce program. The Department does not believe that approval of the eligible workforce program should last in perpetuity without any further evaluations by the Governor of the eligible workforce program's regulatory compliance with the criteria required to be an eligible workforce program. An eligible institution's PPA can be in effect from one to six years, ensuring some level of periodic review of programs.

Components Determined by Governors (§ 690.93(g))

Statute: Section 481(b)(3) of the HEA, as added by Section 83002(b) of the OBBB, establishes the requirements for Governors to approve eligible workforce programs.

Current Regulations: None.

Proposed Regulations: We propose that a program which serves as a related technical instruction component of a Registered Apprenticeship Program meets the requirements of paragraph (a)(1) and (a)(2) of § 690.93.

Reasons: The related technical instruction component of a Registered Apprenticeship Program provides apprentices with the knowledge of subjects related to the occupation and is the component of the Registered Apprenticeship program that would commonly seek to become Pell Grant eligible after approval by the Secretary. Registered Apprenticeship Programs go through a rigorous registration process administered by the Department of Labor under 29 CFR part 29. Since Registered Apprenticeships are paid jobs with an employer that operate under approved program standards structured to prepare apprentices with the qualifications for a specific occupation, all programs that serve as a related technical instruction component of a Registered Apprenticeship program meet the requirement of paragraph (a)(2) of § 690.93. Further, as Registered Apprenticeships are linked to demonstrated hiring needs, the Department of Labor has consistently asserted that Registered Apprenticeship programs qualify as occupations in-demand in the local labor market under WIOA and Registered Apprenticeships are automatically eligible for inclusion on state eligible training provider lists under WIOA section 122. 7 Accordingly, a Governor must consider a program that serves as a related technical instruction component of a Registered Apprenticeship program to provide education that aligns with the requirements high-skill, high-wage, or in-demand industry sectors or occupations and that the program meets the hiring requirements of potential employers. While the proposed regulation does not extend such treatment to the requirement at paragraph (a)(3) of § 690.93, the Department notes that a program that serves as a related technical instruction component of a Registered Apprenticeship program does in all cases lead to a Registered Apprenticeship Certificate of Completion, as defined in 29 CFR 29.2 Definitions, including interim credentials, which are considered to be a recognized postsecondary credential that is nationally portable. Further, there are many ways a Registered Apprenticeship Certificate of Completion may be determined to meet the state's criteria for being a recognized postsecondary credential that is stackable, including those described in guidance from the Department of Labor. 8

7 Dep't of Labor, Training and Employment Guidance Letter No. 08, (May 17, 2021), available at https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2021/TEGL_8-19_Change-1.pdf.

8 Dep't of Labor, Training and Employment Notice No. 25-19, (June 8, 2020), available at https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEN/2020/TEN_25-19.pdf.

Components Determined by Governors (§ 690.93(h))

Current Regulations: None.

Proposed Regulations: The Department proposes that the Governors of two States may enter into a bilateral agreement, that is published publicly, regarding the enrollment of students located in one of those States into some or all of the programs located in the other State, under certain conditions.

First, the Governor in the State in which the student is located, in consultation with the State board, would need to include the occupation(s) or sector(s) on the list developed under the process set forth in 34 CFR 690.93(b)(1)(i). Second, the Governor of the State in which the eligible institution(s) offering such program(s) is located would be required to determine, in consultation with the State board, that the program meets the conditions under 34 CFR 690.93(a). Finally, the bilateral agreement would be required to include provisions for data-sharing among the States for purposes of completion and placement rate calculations.

Reasons: The Department recognizes that there may be instances where students who live in one State may wish to use Pell Grants to pay for eligible workforce programs offered by an institution that is located in another State (where the program is approved by the other State). Further, during rulemaking, several negotiators asked if an eligible workforce program could be offered through distance education (defined under 34 CFR 600.2) to students located in a different State than where the eligible institution is located. The Department has two significant

First, such reciprocity is more likely to lead to rapid proliferation of certain types of eligible workforce programs offered through distance education that are not aligned to local workforce needs, and because the oversight framework for these programs is only now being developed, there is significant risk associated with allowing rapid widespread adoption of programs. Rapid expansion of eligible workforce programs could reduce the Department's ability to provide oversight of institutions, and has the potential to incentivize educational offerings at scale rather than to smaller groups of students. Both of those risks were realized during the rapid expansion of distance education during the 2000s.

Second, the Department is concerned that nationwide reciprocity, without constraints, would circumvent statutory intent that eligible workforce programs fulfill specific local, regional, and State workforce needs. Many components of an eligible workforce program center on high-wage, high-skill, or in-demand occupations and sectors and employability in the State where the eligible workforce program is approved. For example, if a Governor of a State on the east coast of the United States approves an eligible workforce program based on the factors in his or her State, those same factors may not apply to students seeking to enroll in the same eligible workforce program on the west coast of the United States.

At the same time, the Department does not seek to discourage high-quality eligible workforce programs offered through distance education. We propose to permit bilateral agreements between two Governors, as opposed to multilateral agreements that allow multiple Governors to offer eligible workforce programs to students through distance education. The bilateral agreements would ensure that Governors are more intentional about program offerings and students' Pell Grant eligibility is not used for enrollment in eligible workforce programs that will not lead to job opportunities and will have insufficient return on investment where the student lives. The Governor of the State where the student is located would be required to ensure that the list developed under 690.93(b)(1)(i) includes the occupation(s) or sector(s) that are relevant in the State where the student program is located because students should only enroll in eligible workforce programs that will prepare them to enter the workforce upon completion.

The bilateral framework encourages two Governors to speak directly to one another about each other's specific State standards. This is in contrast to a multilateral agreement that may have an independent reciprocity or membership organization that has national standards that may not actually meet the needs of the student where the student is located.

Finally, there are annual completion and placement metrics that must be met each year for the eligible workforce program to maintain eligibility. The bilateral agreement includes provisions for data-sharing among the States for purposes of completion and placement rate calculations so that the Governor where the eligible institution is located can properly evaluate and certify that the eligible workforce program meets all appropriate outcome metrics.

There are also operational aspects that support the efficacy of bilateral agreements. As noted in the previous paragraph, Governors would still need to comply with the completion and job placement metrics discussed under § 690.94(a). Eligible institutions and Governors would need to obtain, analyze, and share information with the Department about students in different states than where the eligible institution is located. This would require complex and thoughtful agreements better suited to bilateral than multilateral agreements. These regulations also would not prevent a State from entering into more than one bilateral agreement with other States. Additionally, the Department's proposal does not prevent an institution from seeking approval in multiple states pursuant to the written policies and processes of each state.

After a written bilateral agreement is ratified, the eligible institutions offering eligible workforce programs in both States would be able to disburse Pell Grants to eligible students not located in the State where the eligible institution is located.

We note that this provision would not apply to an individual who is attending an eligible workforce program in person and resides in a different State than where the eligible workforce program is offered.

The Department has made a technical update to the consensus language under § 690.93(h)(1) and (2). We changed “State Board” with an upper case “B” to “State board” with a lower case “b”.

Components Determined by the Secretary (§ 690.94(a))

Statute: Section 481(b)(3)(A)(iv) of the HEA, as added by Section 83002(b) of the OBBB, requires that “. . .after the Governor of such State makes the determination that the program meets the requ

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