On May 22, 2015, the U.S. Department of Education ("ED" or "the Department") released guidance regarding a December 2014 amendment to the Higher Education Act of 1965, as amended, that makes an individual without a high school diploma (or its recognized equivalent) or who did not complete secondary school education in a home school setting eligible for Title IV student financial aid through ability to benefit (ATB) alternatives if such individual is enrolled in an "eligible career pathway program" ("ECPP") offered by a postsecondary institution. The guidance also provides detail regarding how postsecondary institutions can determine the first payment period for which a student is entitled to Title IV aid and how to determine whether a student is eligible for a regular or a limited Pell Grant award. On June 24, 2015, the Department released a related announcement about approved ATB tests that can be utilized by institutions under this new law. See Electronic Announcement - ATB.

To be eligible for any Title IV aid, the student must: 

  1. Pass an independently administered Department of Education–approved ATB test or complete at least six credit or 225 clock hours that are applicable toward a degree or certificate offered by the postsecondary institution; and 
  2. Be enrolled in an ECPP offered by a public, nonprofit or for-profit institution. That program must: 
    1. "concurrently enroll students in connected adult education and eligible postsecondary programs"
      • The adult education portion of the eligible career pathway program is defined according to the term "adult education" in Title II of the Workforce Investment Opportunity Act (WIOA), meaning academic instruction and education services below the postsecondary level that increase an individual's ability to read, write and speak in English and perform mathematics or other activities necessary for the attainment of a secondary school diploma or recognized equivalent; transition to postsecondary education; and obtain employment. An institution may not include the cost of the adult education component of the ECPP in a student's cost of attendance for Title IV purposes (as the coursework is below the postsecondary level). In addition, the institution may not pay the cost of the adult education component using Title IV aid. In other words, the institution, the student or another non-Title IV revenue source must fund the adult education component of the ECPP.
      • The "eligible postsecondary program" portion of the ECPP means a Title IV eligible postsecondary program as currently interpreted by ED (i.e., meeting the existing Title IV regulatory definition of an eligible program). 
    2. "provide students with counseling and supportive services to identify and attain academic and career goals"
    3.  "provide structured course sequences that (i) are articulated and contextualized and (ii) allow students to advance  to higher levels of education and employment"
    4.  "provide opportunities for acceleration for students to attain recognized postsecondary credentials, including degrees, industry relevant certifications, and certificates of completion of apprenticeship programs"
    5.  "be organized to meet the needs of adults"
    6.  "be aligned with the education and skill needs of the regional economy" and
    7.  "have been developed and implemented in collaboration with partners in business, workforce development, and economic development." 

Currently, the Department's guidance places the obligation on the postsecondary institution to determine whether or not a program currently offered by the institution or created by the institution in the future meets the definition of "eligible career pathway program" such that ATB students may be determined by that institution to be Title IV eligible. 

A potential consequence of an incorrect interpretation of the new law and the Dear Colleague Letter by an institution is that ED may conclude that all students enrolled in the program are ineligible for Title IV aid and require the institution to return Title IV funds for such students where the students have no other basis for Title IV eligibility other than through an "eligible career pathway program."

Institutions of higher education interested in benefiting from this new law may want to undertake a prudent and thorough analysis of whether they can meet the requirements of the new law and how they will document compliance with it.