Advocacy Update on JOBS Act and Gainful Employment Regulations

By Jennifer Stiddard, August 10, 2023

One of the main tenets of NSC’s Making College Work campaign is providing affordable and accessible pathways for workers to attain high quality credentials. Why is this such a priority for NSC? Well, a significant portion of good jobs in the US require training beyond high school, but not a four-year degree. Every day, in communities across our nation, workers seek out opportunities to ensure their families can thrive. At the same time, businesses want to hire skilled workers—people trained for jobs in growing industries. As the need for skilled workers has grown, so has the availability of postsecondary education and training programs. In fact, some estimates put the inventory of unique credentials offered in the United States at over one million.

With such a wide array of non-traditional postsecondary opportunities, it is imperative to be able to assess the value of those opportunities for workers and businesses as well as provide equitable access to quality non-degree credentials that lead to good jobs. [Read NSC’s latest report on The Non-Degree Credential Quality Imperative]

This update focuses on two areas of federal policy that intersect with NSC’s Making College Work campaign that also have significant implications for our network.

What’s Happening with the JOBS Act

For nearly a decade, NSC and its network has advocated for the expansion of the Pell Grant program to include high quality short-term education and training programs. Conceptually, the idea of providing additional financial aid to students enrolled in high quality short-term education and training programs has garnered significant bipartisan support. NSC has rallied around the JOBS Act (S. 161, H.R. 793), which is a bipartisan bill (sponsored by Senators Tim Kaine (D-VA) and Mike Braun (R-IN), and Representatives Bill Johnson (R-OH) and Lisa Blunt-Rochester (D-DE)) that aims to provide greater access to Pell Grants for lower-income students enrolled in quality short-term programs that fall below 600 clock hours or 15 weeks in length. In addition to lowering the time threshold for Pell Grant eligibility, the JOBS Act would also institute a number of accountability standards that tie programmatic eligibility for these shorter-term programs to quality metrics.

Since the JOBS Act was first introduced in 2014 there have been a lot of ‘nearly there’ moments where it seemed like the bill was just on the cusp of passing into law. The latest was a scheduled markup of the JOBS Act which was set to occur in the Senate Committee on Health, Education, Labor, and Pensions in late July. It was expected that the JOBS Act, as amended, would pass out of committee setting it up for potential consideration by the full-Senate in the fall. However, the markup was cancelled less than 24 hours before it was set to occur; effectively shelving JOBS and a handful of other workforce bills for the time being.

Since the beginning of the year, there have also been new JOBS Act-like bills that have been introduced in both the House and Senate. These include the PELL Act (H.R. 496) introduced by Representatives Stefanik (R-NY) and Foxx (R-NC) in the House and Senators Budd (R-NC) and Scott (R-FL) in the Senate, as well as the Jobs to Compete Act (S. 2442, H.R. 1655) introduced by Representative Bobby Scott (D-NC) in the House. While the JOBS Act remains the only bipartisan bill, all these other bills have more like elements than differences. Where they differ tends to be on what accountability metrics should be implemented in order to determine quality. For example, each bill has a differing approach on how to factor wages into the quality equation. While it may make things confusing for advocates, it is a good sign that some of these bills have been introduced by committee leadership. The reality is that when the JOBS Act passes into law it won’t look exactly like the JOBS Act as currently drafted. The final bill will be negotiated by Congressional leaders, and the various bills introduced provide a snapshot into sticking points that Congress still needs to iron out.

What’s next for JOBS? That’s always a good question. There remains a lot of bipartisan interest from both the House and Senate. It’s unclear if the Senate will try again to mark it up in the fall. There may also be an opportunity to include JOBS in an appropriations package or other legislative vehicle. Continued advocacy helps make passage of the JOBS Act more of a reality. We couldn’t have gotten this far without our network, so please stay tuned for next steps.

Gainful Employment Regulations Could Impact Access to Federal Financial Aid

Gainful Employment is the other big story focused on applying accountability metrics to programmatic eligibility for federal financial aid. But what does that mean exactly? Essentially, within the Higher Education Act the law states that non-degree programs at nonprofit institutions, as well as virtually all programs at for-profit institutions must lead to ‘gainful employment’ in order to be eligible for federal financial aid. By not defining what ‘gainful employment’ means in the legislative statute it allows the Department of Education (ED) to regulate the definition. Attempts to regulate that definition have been a bit of a ping pong match for more than a decade with partisan views and a few lawsuits thrown into the mix.

In its latest iteration, ED released a notice of proposed rulemaking (NPRM) in the spring which provided a draft proposal of the regulation and 30 days for stakeholders to comment. In addition to GE the NPRM included other regulatory proposals around financial value transparency, financial responsibility, administrative capability, certification procedures, and Ability to Benefit (ATB).

The version of GE outlined in the latest NPRM is a bit more stringent than what has been proposed or implemented in the past. Obama-era GE included something called a debt-to-earnings metric which bases programmatic eligibility on a formula that compares student debt to earnings of graduates. Programs that provide too much debt and not enough earnings over a period of three years fail to remain eligible for federal student aid programs. The newly proposed GE regulations include an additional layer on top of debt-to-earnings whereby programs would also be evaluated using a wage floor. Essentially, ED would set an earnings threshold for each state based on median high school earnings (which ED estimates to be approximately $25,000 nationally). Programs may lose eligibility to federal financial aid if graduates typically do not exceed the wage threshold.

ED estimates that of the approximately 32,000 GE programs in total, about 1,800 would fail at least one of the two financial-value metrics. This would impact an estimated 703,000 students (278,000 due to the high school earnings test). It is important to note that programs with smaller cohorts of graduates would be exempt from these requirements. ED also asserts that the majority of programs that may lose eligibility under this GE proposal are offered by for-profit institutions. However, if implemented community college programs would also be impacted to some degree. Additionally, if the JOBS Act were to pass into law GE regulations would apply to those programs as well.

For those who have followed NSC’s work on defining quality nondegree credentials, it’s evident that NSC supports using wages as a measurement of value. It’s one way of ensuring that a worker is better off for having attained a credential. However, wages are tricky when it comes to implementing an accurate measurement. Particularly, when only wages are being used and there is not a consideration of other elements of job or credential quality. Often the data we wished we had in terms of assessing wages and value frankly do not exist.

NSC’s comments to ED provide detailed insight into assessing credential value based on our research and what we’ve learned from our network. The comments also noted that it is very important to do this accurately and thoughtfully if the result is cutting off financial aid for students. NSC believes that only using a statewide high school earnings metric as a threshold for financial aid eligibility is flawed – as it is not realistic to expect that the same job pays as much in Abilene as it does in Austin. An earnings threshold also does not accurately account for return on investment or increases in wages for graduates. NSC encourages ED to reassess its proposal and consider more accurate metrics to assess value and earnings if it proceeds with evaluating programs in such a way.

NSC also provided comments on limitations around clock hours for certain non-degree programs, as well as concerns with certain elements of the Ability to Benefit regulations. NSC’s full comments may be viewed here.

What’s next for GE? ED will attempt to issue a final rule in the fall. It may be identical to what was proposed in the NPRM, and it may not be. If ED is able to issue its final rule before November 1st then the new regulations will likely see an implementation date of July 1, 2024.