Feds will restore grant funding for thousands of students burned by for-profit college closures
The Department of Education is resetting the clock on Pell grant eligibility for students who burned through the federal aid to cover costs at colleges that closed, a move that will help tens of thousands of people complete their education at another school.
Pell, a form of federal financial aid for families typically earning less than $60,000 a year, 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, he would not have enough Pell money left to cover the degree.
That scenario has played out for thousands of students affected by the closures of Corinthian Colleges and ITT Technical Institutes in the past two years. Members of Congress urged the Education Department to restore Pell eligibility to those students, but the agency said it did not have the authority. That led Senate Democrats to introduce legislation that ultimately stalled.
But Sen. Patty Murray (D-Wash.), the ranking Democrat on the Senate Health, Education, Labor and Pensions Committee, identified a provision in the Higher Education Act that gives the Education Department authority to grant students additional aid. Murray wrote Education Secretary John B. King Jr. earlier this month and implored him to review the section in the law.
On Friday, Murray said the department has 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.
“This policy is expected to benefit several thousand students immediately who were at or near their lifetime limit, as well as more students whose institutions might close moving forward, and those who hadn’t reached their limits but who will be able to go back to school if they choose,” Undersecretary Ted Mitchell wrote in a response to Murray’s letter Friday.
Mitchell said the department will inform students and institutions of the policy change, and plans to establish a process in the event of future closings.
Murray estimates that the new policy will help more than 50,000 students enrolled at Corinthian and ITT Tech before their abrupt closures.
About 8.5 million students benefited from the $31 billion program in the 2014-2015 school year. The vast majority of recipients come from families earning less than $40,000 a year. Nearly two-thirds of African American undergraduates receive Pell funding, as do 51 percent of Latino undergrads, according to the Education Trust.
