IN AN EFFORT TO GET AMERICA’S recently unemployed workers back to work, the Obama administration has implemented several initiatives to encourage them to learn new job skills through postsecondary education. These initiatives are likely to affect higher education institutions and provide additional opportunities to educate workers who have been negatively impacted by the economic downturn.
The administration’s effort really began with the American Recovery and Reinvestment Act, which provided $17 billion to expand Pell Grants for all students. The next step: ensure that unemployed workers could and would access these funds.
Increasing Eligibility with Professional Judgment
On April 2, the U.S. Department of Education posted a letter online to remind financial aid offices of their authority to use “professional judgment” to make adjustments to students’ student aid eligibility to accommodate circumstances not reflected in the Free Application for Federal Student Aid (FAFSA). Written on behalf of Education Secretary Arne Duncan by Daniel T. Madzelan, the letter stated that when families experience a layoff, face a costly medical situation, or lose a house to foreclosure, it is unlikely they will know about their right to request an adjustment to one or more of the components that determine their eligibility for financial aid.
“It is for this reason that I encourage you to do more than provide good service to the students who request that you make an adjustment,” Madzelan states. “I would ask you to reach out to your students (and prospective students), particularly those who seem to have hit a rough patch, to make sure that they know there may be ways that you can help.”
Families are unlikely to know about their right to request an adjustment to components that determine aid eligibility.
Madzelan noted that the loss of a job, a reduction in work hours or wages, income loss associated with a prospective student’s decision to leave the workforce, or the need to reduce work hours to return to school could all be reasons to adjust students’ aid eligibility.
A month after this first letter was posted, Arne Duncan communicated to financial aid officers that they may use a letter from the unemployment agency of the student’s state or other evidence that a student is receiving unemployment benefits to document that the student’s earned income is zero.
Duncan wrote that unemployment benefits would not have a material impact on what students are expected to pay for college in the financial aid eligibility formula.
“Unemployment benefits can also be considered zero as the Department of Education, in consultation with the Department of Labor and the Office of Management and Budget, has determined that the maximum unemployment benefits available would not have a material impact on the Expected Family Contribution of an independent student. If there are other members of the student’s family for whom you may have evidence of their receiving unemployment benefits, we encourage you to examine the totality of the family’s economic situation and make any appropriate adjustments,” Duncan wrote.
Notifying the Unemployed about Financial Aid
The U.S. Department of Labor sent a letter on May 8 to state workforce agencies, administrators, liaisons, board chairs, directors, and commissioners urging them to notify unemployment insurance (UI) beneficiaries of their potential eligibility for Pell Grants and other student aid and to help individuals apply for Pell Grants through One-Stop Career Centers.
The One-Stop Career Centers are designed to provide a full range of assistance to job seekers under one roof. Established under the Workforce Investment Act, the centers offer training referrals, career counseling, job listings, and similar employment-related services. The Labor Department has notified states that they should ensure that all One-Stop Career Centers are prepared to assist UI beneficiaries in applying for Pell Grants and other financial aid. One-Stop Career Centers have also been encouraged to collaborate with local financial aid offices to ensure unemployed workers get the information they need.
To help workforce agencies notify UI beneficiaries of their potential eligibility for Pell Grants, the Department of Labor distributed a draft letter for agencies to use as a template. The letter notifies recipients that “President Obama announced that workers like you who are getting unemployment insurance (UI) benefits will receive special consideration for financial aid to pay for job training or education. You may also be able to keep your UI benefits while enrolled.”
