Quality Metrics
This section outlines the standard requirements that all states must develop to be Workforce Pell-ready.
Key considerations include:
- Defining and Assessing Quality Metrics
- Certifying Completion Rate and Placement Rate
- Value-Added Earnings
- Eligible Providers
- Program Length and Other Restrictions
- Certification by the Governor
- Bilateral Agreements
- Losing and Regaining Eligibility
The regulation does not prevent states from adding more rigorous requirements to the Workforce Pell metrics.
Each governor must establish and publish a clear, publicly available process for institutional requests for review and approval of Workforce Pell programs. This must include both a timeline for the governor’s consultation with the state workforce board and a determination that a program meets the requirements for approval. There must also be a process for an institution to appeal the governor’s determination, and this process must include clear, transparent, and timely procedures applied consistently and fairly across all eligible institutions.
This resource refers to the responsibilities of the governor and state interchangeably. However, it is important to note that the law also enables the governor to select a designee for the purpose of making approval decisions on behalf of the governor/state. This may include someone at the state workforce or education department or the state agency overseeing workforce programs. A governor must inform the ED of the designated office if they choose to select a designee.
Defining and Assessing Quality Metrics
To ensure that Workforce Pell effectively supports quality job pathways, the regulation outlines a robust state-led approval framework for programs seeking Workforce Pell Grant eligibility. Under this framework, state governors (with consultation of the state workforce board) hold significant administrative discretion to evaluate and certify that short-term programs help learners and workers attain strong outcomes that lead to in-demand jobs. Central to this process is the requirement that states establish formal written definitions and processes to assess eligible programs against four metrics. These metrics help bridge the gap between higher education and the labor market by validating employment demand, verifying employer-aligned competencies, ensuring credential stackability, and securing the transferability of academic credit.
While these are not the only criteria that states will need to consider in certifying Workforce Pell programs, these metrics represent areas where states have greater flexibility to establish their own parameters and definitions. The boxes below delve further into detail:
Defining High-Skill, High-Wage, or In-Demand Sectors/Occupations
- Eligible programs must lead to a recognized postsecondary credential that is high-skill, high-wage, or in-demand. The regulation defines a recognized postsecondary credential as a credential consisting of an industry-recognized certificate or certification, a certificate of completion of a Registered Apprenticeship, a license recognized by the state involved or federal government, or an associate or baccalaureate degree.
- The state must make publicly available its methodology for determining and periodically reviewing which occupations and industry sectors are high-skill, high-wage (as defined under the Carl D. Perkins Career and Technical Education Act) or in-demand, including the competencies required in those industries and occupations.
- The regulation defines an in-demand industry sector or occupation identically to how that term is defined in the Workforce Innovation and Opportunity Act (WIOA). That definition is as follows: An in-demand industry sector or occupation is one of the following:
- an industry sector that has a substantial current or potential impact (including through jobs that lead to economic self-sufficiency and opportunities for advancement) on the state, regional, or local economy, as appropriate, and that contributes to the growth or stability of other supporting businesses, or the growth of other industry sectors; or
- an occupation that currently has or is projected to have a number of positions (including positions that lead to economic self-sufficiency and opportunities for advancement) in an industry sector so as to have a significant impact on the state, regional, or local economy, as appropriate.
- The state must conduct a periodic review of its list of high-skill, high-wage, or in-demand occupations and sectors at least every two years, aligned with the development or modification of the WIOA State Plan. This is intended to avoid duplication and ensure consistency between WIOA and Title IV.
- The resulting list of high-skill, high-wage, or in-demand occupations and sectors must be made publicly available. States are encouraged to post these lists prominently, in plain language, and in user-friendly, searchable formats, and to incorporate them into the WIOA State Plan as soon as feasible.
- Approval for whether a program meets this metric is at the discretion of the state and is certified by the governor. The state will have to document its process as part of the program certification it submits to ED.
Aligning with Employer Hiring Requirements
- The governor must have a written policy explaining how the state will determine whether a program meets the hiring requirements of employers in the relevant high-skill, high-wage, or in-demand sectors and occupations (see prior section).
- This policy must:
- Evaluate whether the competencies associated with the recognized postsecondary credential align with the competencies employers say they need in those sectors and occupations.
- Incorporate direct input from employers, which can be obtained through the state workforce board, local workforce development boards, industry or sector partnerships, sponsors of Registered Apprenticeship programs, joint labor-management partnerships, or other mechanisms defined by the state.
- The regulation states that because governors are already statutorily required to consult with the state workforce board, this employer-input requirement is not intended to be overly burdensome and allows substantial latitude in how states design the process.
Determining Stackability and Portability of Credentials
- The governor must have a written policy for determining whether a credential obtained upon program completion is stackable and portable.
- The governor must ensure that the program either:
- leads to a recognized postsecondary credential that is stackable and portable; or
- prepares students for employment in an occupation for which there is only one recognized postsecondary credential (such as a CDL).
- This policy must:
- Document connections between the credential and additional credentials within a pathway.
- Consider, when available, data showing whether students progress to additional credentials along career pathways.
- Use, where available, real-time labor market information.
- Include a process for employer validation.
- The regulation notes that many states already use similar evidence in their efforts to identify and validate “credentials of value.” The Employment and Training Administration at the Department of Labor (DOL) released guidance in its publication entitled: Understanding Postsecondary Credentials in the Public Workforce System (PDF), that provides a sub-regulatory definition of stackable and portable credentials that may be useful for states as they develop their written policies.
Ensuring Academic Credit and Transferability
- The governor must have a written policy describing how institutions will demonstrate that:
- Students who complete an eligible workforce program (including noncredit programs) will earn academic credit toward a related certificate or degree program, and
- That credit will be accepted by one or more eligible institutions through formal written agreements (articulation, transfer-of-credit, consortium, partnership, or similar arrangements).
- These agreements may be within the same institution that offers the workforce program or across multiple institutions, but in all cases must be documented in writing to ensure consistency and transparency.
Certifying Completion Rate and Placement Rate
In addition to the requirements outlined in the prior section, states must also certify outcomes associated with programmatic completion and job placement rates. Comparatively, these metrics are more rigid, requiring a minimum threshold, but allow for some flexibility in the application of state administrative data.
For programs seeking first-time eligibility, placement rate and completion rate are applied retroactive metrics—meaning that states will have to certify that a program seeking Workforce Pell eligibility has been in existence for at least 12 months* and has met the required completion rate and placement rate thresholds of 70% during that time frame.
*While a program must be able to demonstrate that it has existed for a year, it is not required that the program was offered throughout that year. For example, an institution may offer an 8-week eligible program in September and then again in April, and be certified if it meets the other requirements of Workforce Pell.
For the 2026–27, 2027–28, and 2028–29 award years, the regulation applies an interim approach to calculate completion and placement rates to give states and institutions time to build the necessary infrastructure. During these first three years, states would certify whether a program meets the required completion and placement thresholds based on their own analysis of available administrative data, including wage records. During these first three award years, alternative data and more flexible methodologies may also be used. Beginning with the 2029–30 award year and beyond, the performance framework would become more rigorous and more targeted.
Completion rate: For 2026–27, 2027–28, and 2028–29 award years, the state would use whatever administrative data source and methodology they deem appropriate for the state to certify that the program meets the 70% completion threshold within 150% of normal time. For example, if a program normally takes eight weeks to complete, at least 70% of students would need to finish within twelve weeks. If the state does not collect completion information for programs, then it must begin collecting the necessary information to certify the completion rate.
Beginning with the 2029–30 award year and beyond, the performance framework would become more rigorous and more targeted. At that point, the state would no longer calculate the completion rate using an interim state-specific method. Instead, it would be calculated by the eligible institution.
Placement rate: For job placement during the 2026–27, 2027–28, and 2028–29 award years, the rate would be calculated as the percentage of students who are employed during the second quarter after exiting the program. This approach is intentionally aligned with existing WIOA performance reporting, since states already measure employment in the second quarter after exit for WIOA participants and typically use wage records for that purpose. It does not initially require that students be employed specifically in the occupation for which they were trained. Instead, during the interim years, the question is simply whether they are employed at all in the second quarter after exit.
Beginning with the 2029–30 award year, job placement rate would still be calculated by the state, but shift to a stricter measure. Rather than looking at all students who exit the program, states would consider only those who complete it. And rather than measuring whether those completers are employed anywhere, the rate would measure whether at least 70% are employed in the specific occupation or occupations for which the program prepares them, or in a comparable high-skill, high-wage, or in-demand occupation, as determined by the governor using administrative data. ED would leave governors with significant discretion to determine what counts as comparable, based on state labor market context and state-defined high-skill, high-wage, or in-demand occupations. Ultimately, to track placement rates by field of study, states will likely need to expand Unemployment Insurance wage record collections to include Standard Occupational Classification (SOC) codes.
Completion and Placement Rate Exclusions
A student is not included in the numerator or denominator of the completion or placement rates if the student dies; experiences the onset of a medical condition that prevents employment; is ordered to the uniformed services, including active-duty service or service under the National Guard; or becomes incarcerated. Students enrolled in prison education programs that qualify for Workforce Pell are not excluded from the completion rate or placement rate calculations. Additionally, students who are enrolled in a subsequent postsecondary program following completion of a Workforce Pell program (and during the mandated time frame— second quarter after exit) are not excluded from the placement rate calculation.
Maintaining Eligibility
For each award year after an eligible workforce program is approved, the institution must do two things annually:
- Submit to the governor a list of students who completed the program during that award year, along with the information needed for the governor to verify the program’s job placement rate for that year.
- Report the program’s published tuition and fees through a process established by the U.S. Secretary of Education.
An eligible workforce program would lose eligibility at the end of the payment period* that begins after the Secretary determines that the institution failed to meet the required completion-rate or job-placement-rate standards. However, the Secretary would not make that determination while the program’s eligibility, approval, or reported job placement or completion rates are under appeal or awaiting the governor’s final certification.
If a program loses eligibility because it fails the completion-rate or job-placement-rate requirements—or if an institution voluntarily discontinues a failing program—the institution may not reestablish that program’s eligibility, or create a substantially similar program, for two years. This restriction applies to programs with the same four-digit CIP code that lead to employment in occupations with identical SOC codes. The two-year period begins on the earlier of either the date the program lost eligibility or the date the institution voluntarily discontinued the failing program.
*The FSA Handbook provides greater detail on how payment periods are defined.
Value-Added Earnings
The Value-Added Earnings (VAE) metric serves as a financial protection test for students. The underlying philosophy is that a short-term program should not cost more than the economic boost (the “value add”) it provides its graduates relative to a basic self-sufficiency baseline. The VAE metric is primarily the responsibility of ED to calculate. However, the governor will also need to demonstrate that the state considered program costs and likely earnings outcomes as part of its certification process. It is therefore important for the state and other stakeholders to understand the VAE metric as part of both near-term and long-term eligibility considerations.
Under this metric, an eligible workforce program’s total published tuition and fees cannot exceed its calculated VAE rate. If a program charges more than the VAE rate generated by its graduates, it must either lower its tuition or lose eligibility for Workforce Pell funding.
VAE Formula: No later than three months prior to the beginning of the award year, the U.S. Secretary of Education will publish the VAE that will apply to the eligible workforce program for that upcoming award year. Unlike placement rate and completion rate—which will be measured retroactively—VAE is a forward-looking metric that measures the earnings of individuals who received federal financial aid (i.e., a Workforce Pell Grant) and completed their program. For program completers receiving Workforce Pell, the earnings measurement period is the first full tax year following the award year in which the student completed their program.
Calculating VAE:
Adjusted Median Earnings = (Median Earnings of Program Completers / Regional Price Parity Index) * 100
VAE = Adjusted Median Earnings – (150% of the Federal Poverty Line)
Once the VAE figure is calculated, the institution must pass the following test to maintain Workforce Pell eligibility for that program:
Published Tuition + Fees ≤ Value-Added Earnings
Under the regulation, VAE does not become a factor in programmatic eligibility until the 2030-2031 award year. The reason for this gap is that the statute dictates that earnings must be calculated for students who received federal financial aid and completed the program three years prior to the award year. Thus, the earliest that VAE can be calculated for students who complete in the 2026-2027 academic year is 2030-2031. This multi-year window for calculating VAE will be ongoing, as each cohort of completers will be evaluated three full years after they finish their program.
Another difference between VAE and completion rate and placement rate is that VAE will be under the full purview of the U.S. Secretary of Education. ED will be responsible for calculating median annual earnings for each Workforce Pell program by using student completion data that institutions are required to report to the Secretary to support its administration of, or participation in, Title IV, which includes Workforce Pell. The Department will then utilize that list of Title IV-receiving completers and obtain aggregated median earnings data from another federal agency (most likely the IRS).
VAE Exclusions: The VAE median earnings calculation excludes the earnings of individuals who are actively enrolled in another postsecondary program at the time the metric is calculated. This differs from the placement rate calculation, which essentially penalizes programs with students subsequently enrolled during the post-completion window.
Regional Price Parities: To ensure fairness between states with vastly different cost-of-living levels, the median earnings calculation is adjusted using the Bureau of Economic Analysis Regional Price Parities. This standardizes earnings based on state and metropolitan-area cost levels. (Note: If more than 50% of the students are enrolled from outside the institution’s home state, this regional adjustment is omitted.)
Cohort size: To accurately calculate median earnings, a statistically valid cohort size is required. If a program does not have enough Title IV (i.e., Workforce Pell Grant) completers in a single year to meet the minimum threshold of 30, the regulation allows ED to aggregate multiple cohorts from up to four prior award years to build a large enough sample size. If the Department cannot aggregate a cohort to meet the minimum threshold of 30 students, then VAE will not be calculated. A program will not lose eligibility if VAE cannot be calculated.
Penalties: The intent with VAE is that ED will provide institutions with the opportunity to adjust their programmatic tuition and fees if a program is slated to fail the VAE test. If an institution chooses not to reduce its tuition and fees for a failing program and does not withdraw from eligibility, it may face a financial penalty. ED provides the following example within the final Rule (PDF) released on May 19, 2026:
“Value-added earnings provided during the 2029-30 award year would apply to a program’s tuition and fees for the 2030-31 award year. If the institution charges $5,000 in tuition and fees for the eligible workforce program during the 2029-30 award year but the value-added earnings for the eligible workforce program is $2,500, for the remainder of the 2029-30 award year, the institution can continue charging enrolled students $5,000 in tuition and fees. However, for the 2030-31 award year, the institution must reduce its tuition and fees to a maximum of $2,500 or voluntarily withdraw its program from eligibility for Pell Grant funds. If the institution continues to charge students $5,000 in tuition and fees and offers Pell Grants to enrolled students during the 2030-31 award year, the Secretary will assess a liability for the amounts of Pell Grants disbursed for students enrolled in the program for that award year.”