They’re part of the 1 percent, but not the kind with a private jet and country-club membership.
They’re the relatively small population of students who don’t have a high-school diploma but are relying on federal aid to attend college. For them, life might be getting more challenging. That’s because starting July 1, students without a diploma or GED will no longer be eligible to receive federal student aid.
Over the past two decades such students, who are disproportionately minorities and from low-income families, have been able to receive federal aid for college, without a high-school diploma or its equivalent, by demonstrating their “ability to benefit” from higher education. They could prove such ability by taking a basic-skills test, or by completing six credits or 225 clock hours of college work.
But late last year, Congress tightened the eligibility requirements for student aid as it sought to pay for a growing Pell Grant program while maintaining the maximum Pell award level. Under the plan approved last December, students without a high-school degree no longer have a path to federal aid through the ability-to-benefit criteria. A measure moving through Congress now could restore eligibility for students in some career-oriented programs, but in a time of tight budgets, its prospects are unclear.
Though the Department of Education says it doesn’t have comprehensive data on the number of students who get federal aid through ability-to-benefit eligibility, department officials estimate that some 65,000 students who would have been eligible for a Pell Grant this coming year will no longer qualify without the ability-to-benefit provision. Other students receive other types of federal aid, like subsidized loans, through ability-to-benefit rules.
And although community colleges enroll the majority of ability-to-benefit students receiving all kinds of federal aid, among those who get Pell Grants, for-profits enroll the most students by far. About 70 percent of the students who receive Pell Grants under ability-to-benefit eligibility attend for-profit institutions, according to an estimate by the Education Department.
Many community-college students who take advantage of the ability-to-pay provision opt for technical or career-oriented programs. One such student is Jennifer Khlanteos, from Alton, Ill., who decided last year that she wanted a job with a better salary and more room for advancement than the clerical position she had held at a local newspaper.
Although Ms. Khlanteos, 27, thought she had graduated from high school, she was home-schooled during the last several months of her senior year, and the state did not list her as a high-school graduate because her home-schooling program wasn’t accredited. So she took and passed the ability-to-benefit basic-skills test and received a Pell Grant. It covered nearly all of the cost of the classes she took to become an emergency medical technician at Lewis and Clark Community College. She graduated in May—just a month after receiving her GED.
The Pell Grant, she said, was essential. “I wouldn’t have been able to take the classes and complete them without the ability-to-benefit,” she said. “We had pretty good-sized classes, and it’s the only way a lot of the students were able to be there.”
In Washington State, ability-to-benefit students make up more than 50 percent of those in the state’s Integrated Basic Education and Skills Training program, which integrates basic and remedial classes with a college-level curriculum and has been widely praised as an innovative community-college model. The end of ability-to-benefit will cut 15,000 to 20,000 students from the program over a five-year period, estimates Charles Earl, who is retiring next month as executive director of Washington State’s community- and technical-college system.
“A GED is important, but in the adult-education arena it’s also important that it’s married with postsecondary-level job skills,” he said. “When we put them together, we’ve found students learn more, they complete the programs in much higher percentages, and they get to work more quickly.”
“These folks have every ability to learn in postsecondary education, but they simply don’t have the money,” Mr. Earl added.
Ending Up on Unemployment?
The Center for Law and Social Policy estimates that about 1 percent of all students receiving federal student aid do so under ability-to-benefit rules. In the 2009 fiscal year, the government disbursed about $113-billion in aid, of which $12.8-billion went to students who qualified based on the ability-to-benefit provision, according to a report by the department’s inspector general.
Ending ability-to-benefit, supporters of the provision argue, will force students to earn a GED before enrolling at a community college, prolonging the time it takes them to receive a degree and begin working.
Illinois, for instance, offers a bridge program, based on the Washington State model, that moves students from adult-education classes quickly into college programs. Those students simultaneously earn their GED’s, according to Karen Hunter Anderson, vice president for adult education of the Illinois Community College Board.
“We now have a pool of students for whom we’ve developed very effective programs, but they aren’t going to be able to transition into them” without the support provided by ability-to-pay, Ms. Hunter said. “Instead, they’ll end up on unemployment or in very low-paying jobs.”
In other cases, students without a high-school diploma who want to enroll in a community college may not be able to take the GED exam.
“Access to GED is spotty, depending on where you are,” said David Baime, vice president for government relations at the American Association of Community Colleges. “We’re also concerned because the costs of taking the GED tests are rising.”
The proposal in Congress would partially restore ability-to-benefit eligibility, but only for students enrolling in “career-pathway programs” that are aligned with the needs of the regional economy and have been developed in collaboration with industry. Such programs are already common at community colleges. Sen. Patty Murray, a Washington State Democrat, attached the measure as an amendment to the Senate’s education budget, which passed out of the Appropriations Committee this month.
For-Profits Have a Stake
Community colleges are the most popular destination over all for students receiving federal aid under ability-to-benefit eligibility, enrolling about 60 percent of all such students. The provision has also been a modest boon for the for-profit sector, whose students depend heavily on Pell Grants.
Ability-to-benefit students make up nearly 6 percent of Corinthian Colleges’ enrollment, though the company recently ramped up recruitment of those students and was on track to increase to 10 percent in the next year, said Jarrel Price, an analyst at Height Analytics in Washington. (Corinthian had stopped enrolling such students during the 2010-11 academic year in order to bring down its student-loan default rates.) At Lincoln Education colleges, ability-to-benefit students also represent nearly 6 percent of total enrollment, said Mr. Price.
While the change coming next week may leave many students without high-school degrees scrambling to figure out how to pay their tuition, for-profit institutions have been looking for ways to make up for the loss of the aid.
Corinthian Colleges donated $1-million to the National Urban League to support GED programs, one of a number of similar efforts the company is making to expand the pool of high-school-educated students who will be eligible to use federal financial aid at Corinthian’s institutions.
Corinthian officials have said that the end of the ability-to-benefit provision poses a revenue challenge to the company, but they expect its investments in GED-preparation programs to help offset the losses by the beginning of next year.
The new high-school requirement for receiving federal aid has also given rise to a new venture by a subsidiary of the online-education company Cengage Learning, and Smart Horizons Career Online Education, a private, Web-only high school based in Florida.
The companies have teamed up to offer Bridge to Start, an online high-school program, which is designed “to assist postsecondary institutions in retaining students who did not complete high school and, upon the completion of their high-school diploma, make them eligible for federal funding,” according to a news release.