Neg Reg Deep Dive: Proposed Regulations on Prison Education Programs

By Jill Desjean, NASFAA Policy & Federal Relations Staff

Late last month, the Department of Education (ED) issued a Notice of Proposed Rulemaking (NPRM) requesting public comments on draft regulations to implement Pell Grants for individuals enrolled in prison education programs (PEPs).

Prison education programs were covered by the Affordability and Student Loans negotiated rulemaking committee in late 2021, which also included topics such as Public Service Loan Forgiveness (PSLF) and several types of loan cancellation and discharge, for which ED is also soliciting public comment and is expected to release final language by November 1 for implementation next July. Only one topic from the Affordability and Student Loans committee, a new income-driven repayment (IDR) plan, remains outstanding and ED has indicated it plans to release draft language for public comment shortly. 

In the FAFSA simplification section of the Consolidated Appropriations Act of 2021, Congress amended the Higher Education Act (HEA) to add section 484(t), restoring eligibility for Pell Grants to individuals experiencing incarceration in federal or state correctional facilities. This student population had been eligible for Pell Grants until the Violent Crime Control and Law Enforcement Act of 1994 instituted a ban on their eligibility. The change provides for restoration of Pell Grant eligibility for these students, but limits that eligibility to those enrolled in prison education programs, which are defined in the statute.

Institutions that wish to offer Pell Grants to students who are confined or incarcerated are required to work with carceral facilities to develop PEPs that comply with the implementing regulations developed through this rulemaking process. However, there is no expectation that every institution will choose to offer Pell Grants to individuals who are confined or incarcerated, only that if they do offer Pell Grants it must be through a PEP.

Certain confined or incarcerated students who are currently receiving Pell Grants who would not qualify under the new eligibility rules would be grandfathered until they exhaust their Pell Grant eligibility, reach their maximum timeframe for program completion, or until July 1, 2029, whichever comes first. This does not apply to the Second Chance Pell program under the Experimental Sites Initiative, for which ED has not yet established an end date.

Proprietary institutions are prohibited from offering PEPs, as are institutions that have been subject to certain adverse actions by ED, by a state, or by the institution’s accreditor in the last five years.

Pell Grants for PEPs may not exceed the cost of attendance (COA). The proposed regulations would require other aid to be reduced first in the event that the other aid plus the Pell Grant exceeded the student’s COA. If other aid could not be reduced, the Pell Grant would have to be reduced.

Per the proposed regulations, PEPs will be considered additional locations, even if instruction is delivered through distance education or correspondence courses. While ED argued during negotiations that treatment of PEPs as additional locations was necessary to ensure program integrity and accurate collection of data such as Pell Grant expenditures, student demographics, and mode of instruction, institutions were concerned about other requirements that apply to additional locations, such as campus crime reporting and disclosures required under the Clery Act. ED counsel assured negotiators that Clery Act reporting is only required in cases where institutions own or control property, which they believe will be rare with PEPs. ED did commit, however, to working with institutions on a case-by-case basis where they did own or control property at a carceral facility.

ED maintains the 25% cap on incarcerated students as a proportion of an institution’s enrolled students and the associated waiver of that cap. However, it adds that PEPs would not qualify for the waiver during their first two years of operation and, after that, would have to demonstrate a completion rate of at least 50%, meet all of the eligibility conditions of new Subpart P (discussed below), and meet both administrative capability and financial responsibility requirements. Institutions granted a waiver could enroll up to 50% incarcerated students for five years and, after that five years, could enroll up to 75% incarcerated students for up to five years.

The regulations add Subpart P to the regulations in section 668. This new subpart will include all relevant details to the establishment of PEPs, how PEPs would gain and maintain eligibility to offer Pell Grants, oversight, and reporting requirements.

PEPs would have an added layer of accountability beyond the standard triad that is made up of the federal government, states, and accreditors, which provide an accountability structure for postsecondary education outside of prisons. The carceral facility — the Federal Bureau of Prisons or state departments of corrections — where an institution seeks to offer a PEP would serve as the oversight entity for PEPs and would be responsible for approving PEPs being offered in their facilities.

The statute authorizing Pell Grants for prison education programs requires that the oversight entity make a determination that a PEP is operating in students’ best interests as part of the decision to approve a PEP to operate in their facility. The best interest determination would include feedback from relevant stakeholders, including currently and formerly incarcerated individuals. 

The statute includes several criteria upon which oversight entities may ensure this best interests requirement is met, including evaluating post-release continuation in postsecondary education, transfer of credits, job placement rates, and earnings. While oversight entities must review all of the best interests indicators in making its determination, ED does not require that a PEP necessarily meet every indicator. Instead, ED expects oversight entities to consider the “totality of the circumstances of the program.” ED also establishes certain indicators as optional areas for oversight entities to consider in its best interest determination, including PEP completion rates and recidivism rates.

Oversight entities would be permitted to approve PEPs for two years without benefit of the aforementioned data to conduct the best interests determination, in acknowledgment of the fact that such data would not be available until after the program has begun to be offered at the carceral facility.

While all PEPs would have to be approved by the carceral facility, an institution would only be required to obtain both accreditor and ED approval for the first PEP offered at their first two additional locations. ED would retain the authority to terminate approval of the eligible PEP if the institution violated any terms of the newly-established Subpart P, or if the information the institution submitted to ED, accreditors, state authorizers, or the carceral facility in support of its application was materially inaccurate.

Three requirements are established to ensure that students who enroll in PEPs do not face professional licensure and certification barriers to obtaining employment in the field their program prepared them for. Institutions would be required to ensure (based on information provided by the oversight entity), for the state the correctional facility is located or, for federal correctional facilities, the state in which most of the individuals confined or incarcerated will reside upon release, that

  • PEPs offered satisfy any educational requirements for professional licensure or certification in that state,

  • PEPs designed to meet the education requirements for professional licensure or certification are not offered if state or federal prohibitions would prevent formerly incarcerated individuals from obtaining such licensure or certification, and

  • Disclosures are made as to whether the institution had made a determination that state or federal prohibitions (other than the state in which the correctional facility is located or the state where most students are likely to return in the case of a federal correctional facility where the institution would already be required to meet such requirements) would prevent formerly incarcerated individuals from obtaining licensure or certification. 

Some concerns raised during negotiations could not be addressed by regulation. For instance, negotiators asked that ED consider treating all applicants who are incarcerated to be independent for federal student aid purposes. However, the dependency status requirements are statutory, so ED lacks the authority to change them. 

Congress did include a new provisional independent student status as part of the FAFSA Simplification Act that could allay some of the concerns negotiators raised about the ability of individuals who are incarcerated to obtain parental information. While Congress gave ED authority to implement this provision early, ED does not plan to do so. As such, incarcerated students will be eligible for Pell Grants in 2023-24 without benefit of requesting provisional independent status on the FAFSA. Institutions can, of course, continue to perform dependency overrides on a case-by-case basis for incarcerated students who are unable to obtain parental information. 

While negotiators made great progress in reaching consensus on how to establish parameters under which PEPs could offer Pell Grants to individuals experiencing incarceration, ED still has several logistical details to consider, such as how applicants who are incarcerated will complete the FAFSA. ED included a draft paper Incarcerated Applicant Form (IAF) as part of its request for public comments on the 2023-24 FAFSA earlier this year in preparation for an Oct. 1, 2022 launch. However, the draft was identical to the proposed 2023-24 FAFSA for the broader population of applicants.

NASFAA submitted joint comments with the Vera Institute of Justice with suggestions for changes to the IAF and, while ED indicated that it would consider many of the suggestions made, no revised draft was provided, leaving much of the 2023-24 application process for incarcerated applicants still uncertain. 

ED has indicated that confined and incarcerated students will be exempt from income verification requirements and will be subject only to identity verification and submission of statement of educational purpose. A new ISIR flag will be added to identify students who are confined or incarcerated, which will be populated by:

  • ED, after comparing the applicant's address on the FAFSA to ED’s prison database of carceral facilities;

  • The applicant filing the Incarcerated Applicant Form, which will go to a different P.O. Box and zip code than the standard FAFSA; or

  • The financial aid administrator setting the flag upon determining the student is incarcerated.

Next Steps

Public comments are due Aug. 26, 2022. Following closure of the public comment period, ED will draft final regulations based on comments received. Because the negotiating committee reached consensus on Prison Education Programs, ED is limited to non-substantive changes. If the regulations are published by November 1 they will become effective July 1, 2023.

NASFAA intends to submit comments on this topic. Watch Today’s News to read NASFAA’s comments. Please reach out to NASFAA at [email protected] with your concerns about the proposed PEP rule and, if you submit your own comments, please also share them with NASFAA.

 

Publication Date: 8/10/2022


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