The Education Department said Monday will begin identifying students who burned through federal Pell grants to pay for colleges that closed before they could graduate, with the goal of restoring eligibility for thousands of people.
Pell is available only for six years or 12 semesters. Say a student pursuing a bachelor’s degree uses three years worth of that aid before his college closes. If that student is unable to transfer his credits and has to start over somewhere else, she would not have enough Pell money left to cover the degree.
Thousands of students affected by the closures of ITT Technical Institutes and Corinthian Colleges have found themselves in that exact position. Sen. Patty Murray (D-Wash.), the ranking Democrat on the Senate Health, Education, Labor and Pensions Committee, found a provision in the Higher Education Act that gives the Education Department authority to grant students additional aid, which ultimately led former Education Secretary John B. King Jr. to take action.
At the end of October, the department agreed to recognize its existing authority to restore Pell eligibility to students for the time they attended schools that closed dating back to 2008, when Congress shortened the aid time frame from 18 semesters to 12. But having those changes reflected in the operating system that governs financial aid disbursements took months.
On Monday, John Kane, a senior official in the Federal Student Aid office, said now that the system changes are in place, the department will be sifting through records to finds students who qualify to have their eligibility restored.
“We will adjust those students’ Pell Grant ‘lifetime eligibility used’ amount to remove the portion attributable to the students’ attendance at a closed school,” he said, in a statement. “The Pell Grant adjustment will be equivalent to the Pell Grant eligibility used at the closed school for each award year for which the student received Pell Grant funds. We will make one adjustment per school, per award year.”
Those adjustments will be processed in batches after the department determines an official school closure date and verifies student data. People who receive adjustments will be notified by email.
More than 50,000 students enrolled at Corinthian and ITT Tech before their abrupt closures could be helped by the restoration policy, according to estimates from Murray’s office.
In 2016, the Education Department said the $30-billion Pell program benefitted more than 6 million college students from families typically earning less than $60,000 a year. Nearly two-thirds of African American undergraduates receive Pell funding, as do 51 percent of Latino undergrads, according to the Education Trust.
The program is running a $10 billion surplus that higher education experts say should be used to provide awards throughout the school year, not just the fall and spring semesters, to speed up graduation. President Donald Trump, however, wants to use more than half of that reserve to increase defense spending and reduce the Education Department’s overall budget. Republicans and Democrats in Congress are reluctant to raid the reserve, setting the stage for a fight with the administration.
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