Having secured an additional $17 billion for Pell Grants, Barack Obama is now determined to make sure that unemployed workers have access to them. President Obama on Friday announced his administration's intention to reform the unemployment system in the U.S., saying he intends to "change senseless rules that discourage displaced workers from getting the education and training they need to find and fill the jobs of the future." The policy changes are likely to have a major effect on institutions - particularly community colleges - and financial aid offices everywhere.

Obama talked about the case of Maureen Pike, a woman who lost her job but took the opportunity to upgrade her skills, earning an associate's degree and then landing a new job. "The only reason she could afford to do that while supporting her twins was because the state of Maine allowed her to keep her unemployment benefits and study with the help from a Pell Grant. Pell Grants cover tuition at almost every community college in the country, and unemployment benefits can help those studying to gain new skills to support their families at the same time," said the President.

But many states do not operate the way that Maine does. States generally require people who collect unemployment to be actively looking for work, which can make it difficult to sign up for school or job training.

In his remarks, Obama said, "The idea here is to fundamentally change our approach to unemployment in this country, so that it's no longer just a time to look for a new job, but is also a time to prepare yourself for a better job. That's what our unemployment system should be -- not just a safety net, but a stepping stone to a new future. It should offer folks educational opportunities they wouldn't otherwise have, giving them the measurable and differentiated skills they need just -- not just to get through hard times, but to get ahead when the economy comes back."

The President has directed the Departments of Education and Labor to work closely with states and institutions of higher education and encourage them not only to allow these changes, but to inform all workers receiving unemployment benefits of the training programs and financial support open to them. The two agencies, working together, have created a new web site, www.opportunity.gov, to help workers discover and take advantage of these opportunities. The President reiterated his intention that by 2020, America will again have the highest proportion of college graduates in the world, and asked again that every American to commit to at least one year or more of higher education or career training.

The Labor Department is now encouraging states to update their rules about re-training so that during economic downturns the unemployed can enroll in community colleges and other education or training programs without giving up their benefits. It would appear that the encouragement is tied in part to Recovery Act funds; states are required to report to the Department of Labor by June 30 how they will use those funds. A March 4, 2009 directive to states from the Department of Labor informs them that they are "expected to use Recovery Act funds in innovative ways and that service delivery strategies should be focused on innovative and effective approaches that both meet the demands of today's economy and result in an improved workforce system for tomorrow's global economy."

As we have reported before, the Department of Labor has already urged unemployment agencies to collaborate with financial aid officers. But now each state is to send a letter to all recipients of unemployment insurance benefits to encourage them to consider enrolling in postsecondary education and applying for financial aid.

The Department of Education Friday updated its April 2, 2009 letter to schools on the use of Professional Judgment. The update advises schools that:

"During this period of economic hardship, you may use the letter from the state unemployment agency, or other evidence that a student is receiving unemployment benefits, to document that the income earned from work of that student is zero for the purposes of adjusting data items for the student on the student's federal financial aid application. For purposes of implementing this letter only, unemployment benefits can also be considered zero as the Department of Education, in consultation with the Department of Labor and the Office of Management and Budget, has determined that the maximum unemployment benefits available would not have a material impact on the Expected Family Contribution of an independent student. If there are other members of the student's family for whom you may have evidence of their receiving unemployment benefits, we encourage you to examine the totality of the family's economic situation and make any appropriate adjustments. Unemployed individuals will be able to present letters for 90 days from the date of issuance of those letters to an aid administrator for consideration under this guidance."

The updated letter reiterates the Department's earlier encouragement that schools do not hesitate to use professional judgement. The Department acknowledged that many financial aid administrators have been reluctant to use professional judgment because the Department has used the percentage of students for whom a professional judgment determination has been made as part of its risk-based model to select institutions for program reviews, but said that it recognizes that appropriate use of professional judgment by a school is likely to increase in the current economic environment, and that the model will be adjusted for the 2008-09 and 2009-10 award years.

These new developments are apparently just the beginning of the administration's plans. Obama said Friday that "In the weeks to come, I will also lay out a fundamental rethinking of our job training, vocational education, and community college programs. It's time to move beyond the idea that we need several different programs to address several different problems -- we need one comprehensive policy that addresses our comprehensive challenges."

Obama has appointed Jill Biden, the wife of Vice President Biden and a community college professor at Northern Virginia Community College, to lead a national effort to raise awareness about access to community college.

Media Coverage

College for the Unemployed Inside Higher Ed

Obama Vows to Restructure Worker-Training System The Chronicle of Higher Education

Making Pell Grants More Essential Congressional Quarterly

Obama Wants You to Go Back to School Talk Radio News Service

Obama Proposes Unemployed Get Grants for More Education, Training FOXNews

By Darrill Anderson
NASFAA Associate Director of Communications

Posted 05/11/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.