Published by: WCET | 12/18/2025
Tags: Distance Education, Managing Digital Learning, Negotiated Rulemaking, Online Learning, Reciprocity, SAN, SARA, State Authorization, State Authorization Network, Student Success, U.S. Department Of Education, WCET, Workforce/Employment
Last week marked the close of the first week of the second negotiated rulemaking to implement the higher education provisions of the One Big Beautiful Bill Act, Public Law 119-21 (OB3). Convened by the Department of Education (the Department), the AHEAD negotiated rulemaking committee began its work by tackling one of the most closely watched elements of OB3: changes to the Federal Pell Grant program, including the creation of a new Workforce Pell Grant for short-term programs. The rulemaking reached consensus with the regulatory process to implement the new Workforce Pell Grants, as directed by Congress, to take effect on July 1, 2026.
For this rulemaking, the Department deliberately narrowed the committee’s focus, separating what were originally two large issue areas, Workforce Pell and Accountability, into distinct, week-long discussions. Week one focused on the regulatory framework needed to support the new Pell Grant opportunity for 8-to 15-week workforce-oriented programs. As with all negotiated rulemakings, the goal was to reach consensus on regulatory language. Consensus means that no committee member dissented from the final draft proposal for regulatory language at the conclusion of the meetings. When consensus is achieved, that language, subject to technical adjustments, forms the basis of the Department’s proposed regulations released for public comment. The AHEAD committee was successful in reaching consensus during week one, largely on the implementation structure for Workforce Pell.
This work builds on momentum from the previous RISE negotiated rulemaking, which concluded in early November and also achieved consensus. The agreed-upon RISE language is now posted on the Department’s website, providing the higher education community an early look at what is expected to appear in the forthcoming Notice of Proposed Rulemaking (NPRM).
In this post, we will address three key areas that affect the digital learning community:
The Department convened two negotiated rulemaking committees to implement the higher education provisions of the One Big Beautiful Bill Act (OB3). OB3 made significant statutory changes that require regulatory direction before institutions, states, and students can fully understand how the new policies will operate in practice.
Most notably, OB3 created a new Federal Pell Grant eligibility pathway, commonly referred to as Workforce Pell, for short-term programs designed to lead to in-demand occupations, as determined by states. This marks a substantial expansion of the Pell Grant program beyond its traditional focus on longer-term academic undergraduate programs. In addition, OB3 established new accountability standards intended to apply across all institutional sectors, reflecting a statutory emphasis on holding all institutions accountable to students for program-level student success and economic return on investment.
To conduct these statutory directives, the Department established two negotiated rulemaking committees:
Departing from past practice, the Department adopted a compressed rulemaking schedule, allotting only two weeks total to each committee. For AHEAD, Pell Grants and Accountability are being addressed in separate discussions and consensus votes, requiring members to deliberate and decide on each issue within a single week, with no time to consult constituencies between sessions.
Under negotiated rulemaking requirements, consensus language approved by the committees, subject only to technical edits, will form the proposed regulations, which will be issued as a Notice of Proposed Rulemaking (NPRM) and opened for public comment before finalization.
Week one of the AHEAD negotiated rulemaking focused on the Federal Pell Grant program, setting the foundation for how the statute’s workforce-focused eligibility expansion will operate in practice. Pell Grants are designed to provide need-based grant assistance to low-income students to help cover the cost of undergraduate education and training.
As directed by statute, the committee’s week one negotiations centered on defining student eligibility for Pell Grants and implementing the new authority to expand Pell eligibility to shorter-term workforce programs. While this expansion creates a significant new access opportunity for students seeking in-demand credentials leading to employment, it also introduces new regulatory responsibilities for institutions and states, particularly around program approval, oversight, and the conditions under which programs may retain eligibility as determined by the Secretary of Education.
Governors will play a central role in implementing Workforce Pell Grants. In consultation with a state board, Governors must establish a state-level process to review institutional requests and determine whether a program meets applicable statutory and regulatory requirements. Through this process, the Governor assesses whether proposed programs align with the state’s identified in-demand occupations and meet required standards related to program quality, duration, and workforce relevance. State approval is required both for initial eligibility and for programs to maintain eligibility. Upon a Governor’s approval, the Secretary may certify the program as eligible to award Workforce Pell.
For interstate distance education, the consensus language allows Governors of two states to enter into bilateral agreements permitting students in one state to enroll in eligible programs located in another state. The Department emphasized Congress’s intent that states play a direct role in setting conditions and collecting data necessary to implement Workforce Pell. While reciprocity through the State Authorization Reciprocity Agreements (SARA) was raised by negotiators, the distinction was discussed that while SARA may provide participating institutions the institutional state approval to offer an activity in another state, Workforce Pell addresses specific programs that require state program approval to be eligible workforce programs.
Overall, the statute reflects Congress’s intent for states, through their Governors, to serve as a key gatekeeper for Workforce Pell. This state review function reinforces OB3’s reliance on state labor market expertise and establishes a formal accountability checkpoint before federal Pell funds can be used for short-term workforce programs.
The practical elements for data collection and maintaining eligibility will continue to be assessed and shared in future WCET Frontiers posts.
As shared in our previous rulemaking post, we urge our community to monitor rulemaking resources and consider the potential regulatory impact.
We suggest the following resources:
It is critical for the digital learning community to pay close attention to the Department of Education rulemaking to assess whether and how consensus draft regulations apply to distance learning, and to anticipate operational, compliance, and financial impacts. Early awareness allows institutions to evaluate implementation timelines, identify necessary system or policy changes, and estimate costs or resource demands. Equally important is the opportunity to review consensus regulatory language during negotiated rulemaking, to prepare informed public comments, seeking clarification, flagging practical implementation challenges or conflicts with existing requirements, and offering constructive suggestions or support, before the rules are finalized.
The Department will convene the second half of the AHEAD Committee on January 5-9, 2026. Registration to stream the meetings will be available soon on the Department’s rulemaking webpage. In addition, the Department is anticipated to release proposed regulations from the RISE Committee early in the new year and has signaled further rulemakings in 2026 focused on accreditation. Taken together, 2026 is shaping up to be another busy year for higher education policy. WCET and SAN will continue to keep you informed and provide implementation-focused analysis of developments affecting the digital learning community. Stay tuned!
