Pell Grants and unemployment benefits during approved training, Change 2

CLASSIFICATION
       EMPLOYMENT AND TRAINING ADMINISTRATION                   Approved Training
                   ADVISORY SYSTEM                              CORRESPONDENCE SYMBOL
              U.S. DEPARTMENT OF LABOR                          OWI
                 Washington, D.C. 20210                         DATE
                                                                December 20, 2022

     ADVISORY:         TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 21-08,
                       Change 2

     TO:               STATE WORKFORCE AGENCIES
                       ALL STATE WORKFORCE LIAISONS
                       STATE UI DIRECTORS
                       COMPREHENSIVE AMERICAN JOB CENTER MANAGERS
                       STATE AND LOCAL WORKFORCE BOARD CHAIRS AND DIRECTORS
                       STATE LABOR COMMISSIONERS

     FROM:             BRENT PARTON
                       Acting Assistant Secretary

     SUBJECT:          Federal Pell Grants and the Payment of Unemployment Benefits to Individuals
                       in Approved Training

1.     Purpose. To strongly encourage states to review their policies and practices for re-
       employment and re-skilling Unemployment Insurance (UI) beneficiaries and other
       unemployed jobseekers, and to inform jobseekers of their potential eligibility for Federal Pell
       Grants (Pell Grants) and other student aid to meet educational expenses associated with
       enrollment in an eligible postsecondary program. Further, to remind states that
       determinations made regarding UI Approved Training requests may be reported as
       “countable” non-monetary determinations for workload purposes.

2.     Action Requested. The Department of Labor’s (Department) Employment and Training
       Administration (ETA) strongly encourages State Workforce Agencies and UI Directors to
       continue to work together and coordinate efforts to ensure jobseekers and UI beneficiaries
       understand their options for retraining including their potential eligibility for Pell Grants (and
       other student aid), in accordance with the existing statutory definitions, regulations, and prior
       guidance. States should (1) ensure that information about Federal Pell Grants (Pell Grants)
       and other student aid is up to date and easily accessible; and (2) ensure that UI beneficiaries
       determine before enrollment whether training is considered by the state as UI Approved
       Training. ETA reminds states that states are required to ensure that UI benefits are still
       available to individuals in training with the approval of the State UI agency. States must
       distribute this advisory to appropriate staff.

3.     Summary and Background.

           a. Summary – The Department is collaborating with the Department of Education (ED),
              which administers the Pell Grant program, to work together with State UI agencies and

       RESCISSIONS                                               EXPIRATION DATE
       None                                                      Continuing

         American Job Centers (AJCs) to continue to ensure that interested UI beneficiaries know
         how they can pursue training opportunities and continue to receive UI benefits, and that
         all jobseekers can find the resources needed to get training and pursue new careers.
         Through this advisory, states are strongly encouraged to send notification letters to UI
         beneficiaries, as outlined in prior guidance, and to connect beneficiaries with information
         online about UI recipients’ potential eligibility for Pell Grants and other student aid.
         States are also encouraged to continue in their effort to make determinations approving or
         denying approval for training, in advance of beneficiaries’ enrollment in education or
         training, and to communicate with beneficiaries about how they can obtain a decision
         regarding training approval. These training request determinations may be reported as
         “countable” non-monetary determinations for workload purposes.

      b. Background – State UI and workforce agencies regularly assist millions of jobseekers
         with financial stability, reemployment, and career advancement. For jobseekers and UI
         beneficiaries aiming to upskill and move into a new career path, Pell Grants provide
         powerful support; yet not all jobseekers are aware of Pell Grant availability or how their
         UI benefits and Pell Grants interact.

         In 2009, ETA published Training and Employment Guidance Letter (TEGL) No. 21-08,
         Pell Grants and the Payment of Unemployment Benefits to Individuals in Approved
         Training, to strongly encourage states to broaden their definition of approved training for
         UI beneficiaries during economic downturns, to notify UI beneficiaries of their potential
         eligibility for Pell Grants and other student aid, and to help individuals apply for Pell
         Grants on the Free Application for Federal Student Aid (FAFSA®) through the AJCs
         (referred to in the guidance and regulations as one-stop centers). Subsequently, advisory
         TEGL No. 21-08, Change 1 advised states of two important clarifications about Pell
         Grant eligibility requirements, encouraged states to use procedures that inform UI
         beneficiaries before enrollment in a program whether training received in the program is
         considered by the state as UI approved training, and reminded states that determinations
         made on UI approved training requests may be reported as “countable” non-monetary
         determinations for workload purposes.1

         As jobseekers return to the workforce in large numbers, bolstered by economic growth,
         many jobseekers can use this opportunity to grow their skills, obtain industry-recognized
         credentials, and obtain higher-paying jobs. To support these jobseekers, ETA is issuing
         this advisory to encourage State UI agencies and AJCs to continue to work closely
         together to ensure that jobseekers know about Pell as a resource, and UI beneficiaries
         who are interested in training opportunities can find appropriate information about how
         they can pursue training and continue to receive UI benefits.

    4. Notifying UI Beneficiaries of Pell Grant Eligibility. The Pell Grant program is a post-
       secondary educational grant program. Pell Grants are awarded to help students with
       demonstrated financial need to meet the cost of their postsecondary education. The
       circumstances many UI beneficiaries experience may mean they are eligible for Pell
       Grants or eligible to receive a larger Pell award, and ED has made efforts to encourage

1   See https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=2752

student financial aid administrators to use the discretion available to them to adjust
financial aid applicants’ information and accurately reflect their income. Guidance to
financial aid administrators from January 2021, updated in April 2022, is available here:
https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2021-01-29/update-use-professional-judgment-financial-aid-administrators.

To ensure that UI beneficiaries are aware of their potential eligibility for Pell Grants, states
are asked to send each beneficiary a letter or other communication (model attached)
describing the Pell Grant program, directing them to information about Pell Grants, and
emphasizing that UI beneficiaries can, in some circumstances, continue to receive UI
benefits while in training with the state’s approval. The model letter provides information
about Pell Grants and advises individuals of the website https://studentaid.gov/understand-aid/types/grants, which provides additional information about Pell Grants and other federal
grants for postsecondary enrollment. State UI agencies are free to modify this letter or
message to reflect appropriate contact information and state UI policy. States are
encouraged to tell letter recipients about information that can inform their training
decisions, such as https://collegescorecard.ed.gov/,
https://collegescorecard.ed.gov/training/, and https://www.trainingproviderresults.gov/, and
that advice and assistance are available through AJCs. State UI agencies should ensure that
both the name and address of the recipient is included in the body of the letter or message.
States should transmit this letter or message to all beneficiaries who received payments of
UI for the most recent week of unemployment. Also, states should send this letter or
message to individuals who receive first payments of regular compensation and those who
receive payments as a result of filing an additional or reopened claim.

Ongoing administrative costs that may be charged to this UI initiative should be reported
in accordance with prior guidance.

As required by the Paperwork Reduction Act, OMB has reviewed and approved this
information collection OMB Control Number 1205-0553, which expires on December 31,
2025. Under 5 CFR 1320.5(b), an agency cannot conduct, sponsor, or require a response
to a collection of information unless the collection displays a valid OMB Control Number.

A. Criteria for Determining if Training May be Approved. Section 3304(a)(8) of the
   Federal Unemployment Tax Act (FUTA) requires, as a condition of employers in the
   state receiving credit against the Federal unemployment tax, that ─

            [C]ompensation shall not be denied to an individual for any week because he
            is in training with the approval of the State agency (or because of the
            application, to any such week in training, of State law provisions relating to
            availability for work, active search for work, or refusal to accept work);

   As stated in prior guidance, this provision was added to Federal law to assure that UI
   eligibility criteria, such as actively seeking work, are not an impediment to the
   individual improving her or his prospects of employment by participating in approved
   training. States use a variety of procedures for determining when UI beneficiaries may

   participate in approved training and continue to receive UI benefits.

   Some states place strict limits on approved training, such as limiting approvals to
   occupational training (i.e., training designed to lead to a specific occupation) and to
   situations where there is no demand for an individual’s most recent job. As an
   example, an individual laid-off from a fast-food restaurant would be denied training,
   in some states, as fast-food jobs continue to exist. Such approaches limit an
   individual’s ability to obtain skills that might lead to more secure employment and
   higher wages.

   In an effort to help job seekers return to the workforce, increase their skills, and
   obtain industry-recognized credentials, ETA has continued to strongly encourage
   states to reconsider their laws and regulations, and any applicable administrative
   requirements, to determine if their approved training requirements are appropriate to
   the current economy. State UI agencies should also continue to consider approval of
   programs at community colleges with job skills components, courses leading to
   general equivalency degrees, courses in adult basic education, language courses, or
   other courses of study, including degree and certificate programs, which are likely to
   increase the individual’s long-term employability. Note that not all training programs
   meet the threshold necessary to meet a state’s definition of approved training as
   contemplated in FUTA, which will allow a student access to Pell Grants as defined
   under the Higher Education Act of 1965, as amended. Program eligibility
   requirements for the Pell Grant are defined in 34 CFR 668.8. Programs at community
   colleges may be more likely to qualify students for Pell Grants than programs at
   training facilities or institutions that are not institutions of higher education that
   participate in the Title IV, federal student aid programs (including the Pell Grant
   program).

   The Department will continue its commitment to work with states as they review their
   current policies. State UI agencies and workforce agencies are encouraged to
   continue to work closely together to ensure that UI beneficiaries who are interested in
   training opportunities can pursue training and continue to receive UI benefits.

B. UI and Workforce Agency Coordination. ETA strongly encourages state
   workforce agencies and state UI agencies to continue their re-employment efforts, to
   help jobseekers including UI beneficiaries understand their potential eligibility for
   Pell Grants and other student aid, and to ensure that UI beneficiaries enter training
   that allows them to continue receipt of their UI benefits. Providing referrals to and
   coordination of activities with other programs and services are free basic career
   services through the AJCs. State UI and workforce agencies may take several steps
   to accomplish this:

         i. States should review or establish processes to minimize the burden on
            individual UI beneficiaries in establishing whether a training program is
            consistent with UI eligibility rules.

             ii. State UI agencies should share with state workforce agencies and AJCs
                 whether and when beneficiaries can continue to receive UI benefits while in
                 approved training, and how the state determines UI-approved training.
                 Where WIOA program staff are advising UI beneficiaries on appropriate
                 training, WIOA program staff should coordinate with UI staff to secure
                 approval of that training, so the individual does not later face difficulty
                 maintaining UI eligibility due to training that does not qualify.
            iii. State agencies should coordinate how to best share information about UI-
                 approved training, and about how to obtain financial assistance in obtaining
                 that training.

C. Assisting Claimants in Finding Training and Applying for Financial Aid. States
   must ensure that WIOA staff or staff in other AJC partner programs are prepared to
   provide UI beneficiaries, jobseekers, and learners, as a part of their basic career services,
   assistance in establishing eligibility for programs of financial aid assistance for training
   and education programs not under WIOA (20 CFR 678.430(a)(11), in applying for Pell
   Grants and other financial aid. Individuals interested in applying for a Pell Grant must
   complete the Free Application for Federal Student Aid (FAFSA). Extensive and helpful
   information on applying for the FAFSA is available at https://studentaid.gov/h/apply-for-
   aid/fafsa. WIOA staff and other AJC partners can also provide UI beneficiaries seeking
   Pell Grants with skill assessments, career guidance, labor market information, job search
   assistance, assistance in choosing training, and assistance in obtaining funding for that
   training. These basic and (as necessary) individualized career services are available at no
   cost to jobseekers and UI beneficiaries, to support their employment goals, to provide
   information on eligible providers of education and training programs, and if eligible pay
   for the training.

   It may be appropriate to enroll UI beneficiaries in the WIOA Dislocated Worker or Adult
   program to access these services. An individual who meets WIOA Dislocated Worker
   eligibility, whether or not she or he is enrolled in the WIOA Dislocated Worker program,
   may qualify for either the simplified needs test or automatic zero expected family
   contribution test used by the FAFSA to determine the student’s need for federal student
   aid. As an example, a dependent student who has a parent who is a dislocated worker, or
   an independent student who is, or whose spouse is, a dislocated worker, may be eligible
   for more need-based aid, including Pell Grants. There is a question on the 2022-23
   FAFSA about dislocated worker status. For more information, please see page 21 of the
   following link: https://fsapartners.ed.gov/sites/default/files/2022-2023/2022-
   2023_Federal_Student_Aid_Handbook/_knowledge-center_fsa-handbook_2022-
   2023_application-and-verification-guide_ch2-filling-out-fafsa.pdf. Note that not
   everyone who receives unemployment benefits will meet the definition of a dislocated
   worker. For example, in general, those who quit their jobs are not considered dislocated
   workers, even if they are receiving unemployment benefits.

   ETA encourages WIOA program staff and AJCs to respond to general information
   requests about the dislocated worker eligibility and definition from financial aid offices,
   as necessary.

D. Administrative Costs. To ensure the continuity of service continues with UI
   beneficiaries, state UI agencies were advised through TEGL No 21-08 that administrative
   costs associated with this initiative could be charged to a UI grant. Costs associated with
   informing claimants of their benefit rights and determining eligibility for UI, including
   eligibility for benefits while in approved training, are necessary for the proper and
   efficient administration of a state’s UI law, and may be charged to the UI grant consistent
   with Section 303(a)(8) of the Social Security Act (SSA). Ongoing administrative costs
   that may be charged to this UI initiative should be reported in accordance with prior
   guidance in TEGL No. 21-08. State agencies may request reimbursement for ongoing
   administrative costs that were charged to the UI program related to this initiative via the
   quarterly UI-3 report. Such amounts should be included on line #26 (labeled “Other”)
   and identified in the UI-3 comments section as “Pell Grant = $#######”. While costs
   associated with AJC staff providing information, advice, and referral to training or
   education services that are part of this initiative may not be charged to UI grants, such
   costs are appropriate as career services under WIOA (see 20 CFR 678.430(a)(11)).

    There are no costs for a student to complete the FAFSA, which is the sole method to
    determine Pell Grant eligibility. It is cost free.

5. Inquiries. Please direct inquiries to the appropriate Regional Office. For questions on Pell
   Grant eligibility, students should contact the financial aid office at their current or
   prospective institution.

6. References.
    • Section 3304(a)(8) of the Federal Unemployment Tax Act (FUTA)
    • Section 303(a)(8) of the Social Security Act (SSA)
    • The Higher Education Act of 1965, Title IV, Part A, Subpart 1
    • 1998 Amendments to Higher Education Act of 1965 (Public Law (Pub. L.) 105-
       244), Section 401(a)(1) (20 U.S.C. 1070a(a)(1))
    • 20 U.S.C. 1070a (pertaining to Pell Grants)
    • The Workforce Innovation and Opportunity Act (WIOA) (Public Law (Pub. L.)
       113- 28), Title I sec. 134(c)(3)(E) enacted July 22, 2014
    • Employment and Training Administration, Workforce Innovation and Opportunity
       Act; Final Rule (WIOA DOL Final Rule) published at 81 FR 56071 (Aug. 19, 2016)
       (20 CFR 680.600)
    • Draft Legislation to Implement the Employment Security Amendments of 1970
       (commonly called the “Orange Book”)
    • Training and Employment Notice No. 32-08 - Guidance on 2009-2010 FAFSA: New
       Needs Determination to Include WIA Dislocated Workers
    • Training and Employment Guidance Letter (TEGL) No. 21-08 and Change 1 - Pell
       Grants and the Payment of Unemployment Benefits to Individuals in Approved
       Training
    • ET 207 Report in Handbook No. 401

7. Attachment.
    • Draft Letter Advising Claimants of Pell Grants/UI Approved Training

                                                                               ATTACHMENT I

          Draft Letter Advising Claimants of Pell Grants / UI Approved Training

[Claimant name and address should be printed on letter.]

I am writing to urge you to consider taking advantage of opportunities for education and
training available to unemployed workers currently receiving Unemployment Insurance (UI)
benefits. (If you are unsure of your UI benefit status, please contact our office at [enter UI
agency phone number]). Bolstered by successful vaccination efforts and economic growth
following the COVID -19 pandemic, displaced and unemployed jobseekers seeking to return
to the workforce can use this opportunity to grow their skills, obtain industry-recognized
credentials, and obtain higher-paying jobs.

Jobseekers, such as yourself, receiving UI benefits will receive special consideration for
financial aid to pay for job training or education and may also be eligible to continue
receiving UI benefits while enrolled in approved training and education programs. Studies
have shown that workers with more education and training have more secure jobs and earn
higher wages.

The Federal Pell Grant program provides financial aid to eligible applicants for educational
expenses and covers up to $6,345 per year. These grants are provided at many institutions of
higher education (IHE) including universities, community colleges, and many trade and
technical schools. Please check with the financial aid office of the IHE you are interested in
attending to ensure participation in the Pell Grant program. If you do not qualify for a Pell
Grant, you may be eligible for other types of aid, such as Federal Direct Loans, or aid from your
State or IHE.

Applying for financial aid and finding training is not difficult. To apply for Federal student
aid submit the Free Application for Federal Student Aid (FAFSA®) here:
https://studentaid.gov/h/apply-for-aid/fafsa. The application is free to submit, there is no
cost. Check out https://studentaid.gov/understand-aid/types/grants, for helpful information
as well. If you are interested in pursuing these opportunities, here are the steps you should
take:

   •   Decide what type of training best meets your needs at https://collegescorecard.ed.gov/

   •   For additional resources:
   •   You may want to visit www.MyNextMove.org, sponsored by the U.S. Department of
       Labor, to explore careers.
   •   You can also learn about different education and training programs at
       https://collegescorecard.ed.gov/, www.TrainingProviderResults.gov. Staff at
       American Job Centers may also be able to assist you in making education, training, or
       career decisions. To locate the nearest American Job Center, you may call the toll free
       number: 1-877-US-2-JOBS (1-877-872-5627) for assistance or visit
       https://www.careeronestop.org/LocalHelp/service-locator.aspx.

       [States are encouraged to provide the most specific information possible,
       including, if possible, auto-populating this information using zip codes.]

   •   Colleges or American Job Centers can also help you submit the FAFSA for Pell
       Grants and other federal financial aid. The only application is available at
       https://studentaid.gov/h/apply-for-aid/fafsa or by calling 1-800-4FEDAID to receive a
       paper copy. For 2022-2023 FAFSA, you will need to report your income from 2020;
       you can ask your IHE to adjust your eligibility to reflect your current circumstances.

   •   Finally, please contact our office at [enter UI agency phone number] in advance
       of enrolling to ensure that you can continue to receive unemployment benefits
       while enrolled in the program you have chosen. Not every training program will
       excuse you from the requirement that you be seeking and available for work in order
       to receive unemployment benefits. Also, not every UI benefits training program will
       qualify for Pell Grants; please contact the IHE you would like to attend to learn more.

Be sure to take this letter with you to the school/IHE you select. For the next 90 days, it
confirms that you are an unemployment insurance beneficiary. While it does not guarantee
you a Pell Grant, your school can use this letter to adjust your eligibility. After 90 days, or if
you no longer have this letter, you may provide alternative evidence that you are currently
receiving unemployment insurance, such as [enter state-specific example].

While our economy is rebounding, we have an opportunity to improve workers’ skills and lay
the foundation for a stronger economic future. I encourage you to carefully consider this
opportunity.