- Negotiated Rulemaking on Workforce Pell begins
- ED adds a new “lower earnings indicator” to the FAFSA
- House Committee marks up transparency bills
- Legal settlement will end the SAVE Plan
Negotiated Rulemaking on Workforce Pell begins
On Monday, the Department of Education (ED) kicked off the first negotiated rulemaking table for the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee. Announced over the summer, the AHEAD Committee is the second of two tables convened to implement the higher education components of H.R. 1, the “One Big Beautiful Bill” (OBBB) reconciliation legislation. The AHEAD Committee will be tasked with implementing Workforce Pell, the new accountability system that measures the earnings of program completers against a comparison group of high school graduates, and Gainful Employment/Financial Value Transparency regulations.
The December session is focused on Workforce Pell, leaving accountability and GE/FVT to January’s session. Tonjua Williams, president of St. Petersburg College, Florida, is serving as an alternate negotiator for public institutions of higher education. Randy Stamper, associate vice chancellor for career education and workforce programs for the Virginia Community College System, is serving as the primary negotiator for the state higher education officers seat.
As covered by AACC’s Jim Hermes in the Community College Daily, the Department released the draft Workforce Pell regulations that the negotiators that have considered for discussion throughout the week.
At the time of this writing, the negotiations are still ongoing, and no consensus checks have been taken. Open questions remain on calculating placement rates, the timing and structure of calculating the Value-Added Earnings measure, and the process for programs to regain eligibility.
AACC will be providing more detailed information at the conclusion of the session. If you would like to watch the final day of proceedings, you can register to attend in-person or virtually here.
ED adds a new “lower earnings indicator” to the FAFSA
On Monday, the U.S. Department of Education (ED) announced that the 2026-27 Free Application for Federal Student Aid (FAFSA) will now display information to prospective students on whether the graduates of their selected schools earn more than a comparable cohort of high school graduates.
After completing the FAFSA, a student may see a flag on their FAFSA Submission Summary that states “Some of Your Selected Schools Show Lower Earnings.” The next screen presents information on the median earnings of all schools on the student’s FAFSA, including any that generate lower graduate earnings.
The Scorecard data used to inform the lower earnings indicator measures the median earnings of undergraduate completers, four years after graduation, who are working and are not currently enrolled in a higher education program. These institution-level earnings are then compared to the median earnings of working adults in the state with a high school diploma or less, ages 25 to 34.
The Department has released the full list of earnings data for all undergraduate institutions, including a flag for which schools are currently designated as lower earnings. According to preliminary analyses by the American Association of Community Colleges (AACC), around 1.5 percent of community colleges – or less than twenty community colleges – will be subject to the new lower earnings indicator. For more information, please read our article in the Community College Daily.
House Committee marks up transparency bills
On Thursday, the House Committee on Education and the Workforce marked up four higher education-related bills, including two focused on bipartisan transparency priorities.
First, the Committee considered the Student Financial Clarity Act. Introduced by Rep. Lisa McClain (R-Michigan), the bill aims to standardize financial aid offers made to students, with a host of requirements for institutions on format, definitions, and connections to other resources. While this iteration is a new proposal, standardizing financial aid offers has generated bipartisan interest in Congress for some time.
AACC strongly supports promoting clarity, consistency, and accuracy of financial aid offers and communications to students. In 2022, we joined the National Association of Student Financial Aid Administrators (NASFAA) and nine other higher education associations to form the “College Cost Transparency (CCT) Initiative” to produce shared definitions and standards. While AACC does not see the need for further federal activity in this area, we appreciate that the Student Financial Clarity Act will allow institutions to omit from the universalized financial aid offer any aid for which the student is not eligible, the program is not eligible, or the institution does not participate in.
The Committee also considered the College Financial Aid Clarity Act, introduced by Rep. Brett Guthrie (R-Kentucky). The bill would create a universal net price calculator – another transparency initiative that has enjoyed bipartisan support throughout several Congresses. However, it also significantly expands the amount of data collected for and displayed on the College Scorecard. While AACC strongly supports the Scorecard as a consumer tool and has advocated for its authorization in statute, we question whether the expansion of data collection and disaggregation will be helpful in informing student choice. The Scorecard currently provides students with a clear and easily digestible picture of student access, costs, and success. In short, it presents them with the most important information. We are concerned that incorporating dozens of new elements on the Scorecard and requiring significant disaggregation of existing elements will be confusing, overwhelming, and ultimately undermine its utility as a consumer tool.
We also question whether this expansion will be worth the burden it places on institutions. For example, the bill requires disaggregation of programs by race/ethnicity, sex, and other student characteristics. For the majority of community college programs, it will be impossible to display this information to students because of privacy issues due to the small numbers of Title IV recipients in completing cohorts. In practice, colleges may be asked to undergo a significant increase in reporting to the federal government, only for students to see empty cells.
As we shared in a recent communication to the Hill, AACC is eager to promote transparency in student access, affordability, and success. We look forward to working with policymakers in the House and Senate to ensure that proposals accomplish these goals.
In addition to these two transparency bills, the Committee considered the Home School Graduation Recognition Act, which would clarify that home school graduates are considered to have graduated high school under the Higher Education Act, and a bill to require public institutions to offer in-state tuition rates for residents of Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and the United States Virgin Islands.
At the time of this writing, the markup is ongoing. Several amendments have been offered, and roll-call votes have been postponed to the end of the day. AACC will keep members updated on these and other issues considered by the Committee.
Legal settlement will end the SAVE Plan
On Tuesday, the Trump Administration announced that it had reached a settlement with the state of Missouri to end litigation surrounding the Biden-era Saving on a Valuable Education (SAVE) Plan.
First announced in July 2023, the SAVE Plan was the most borrower-friendly income-driven repayment (IDR) plan ever created and would have effectively halved the total amount of loans due for most enrolled borrowers. The Biden Administration was aggressive in encouraging enrollment in SAVE, launching widespread communications efforts and automatically enrolling millions of borrowers who were in other IDR plans.
Almost immediately, the SAVE plan was challenged in court, including by the state of Missouri. In March 2024, SAVE was blocked by court action during litigation, and millions of SAVE-enrolled borrowers were placed in administrative forbearance. These borrowers have been unable to switch out of SAVE to another repayment plan, even when interest began accruing on their loans in August 2025. As part of the litigation, the larger swath of borrowers has faced uncertainty and conflicting messages around if and how to enroll in other IDR programs. At several points throughout the past two years, the Department of Education (ED) has taken down the IDR application altogether as it weighed the implications of court actions on the REPAYE, PAYE, and ICR plans.
The settlement reached this week will end the SAVE plan for good. Per the terms, ED will not enroll any new borrowers in SAVE and will transition the 7.6 million borrowers currently in SAVE to another repayment plan. ED will be required to hold a negotiated rulemaking to officially remove SAVE as an active repayment option.