Dear Colleague:
In December 2014, the Higher Education Act of 1965, as amended (HEA), was changed to allow a student who does not have a high school diploma or the recognized equivalent of a high school diploma, or who did not complete a secondary school education in a homeschool setting, to be eligible for Title IV aid through one of the ATB alternatives if the student is enrolled in an “eligible career pathway program,” or ECPP.
Students who are enrolled in an ECPP may be eligible to receive Title IV aid if the student meets one of the following ATB alternatives:
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Passes an independently administered U.S. Department of Education (Department) approved ATB test;
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Completes at least six credit hours or 225 clock hours that are applicable toward a degree or certificate offered by the postsecondary institution; or
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Completes a State process approved by the Secretary of Education.
On October 30, 2023, final regulations were published implementing this statutory change. These regulations amend the provisions of the state process alternative and provide regulatory requirements for ECPPs that are used for establishing student eligibility for Title IV funds and will be effective July 1, 2024.
For purposes of this DCL the term ECPP only refers to programs that are approved by the Department to be used to establish student eligibility for Title IV funds through the ATB alternatives listed above. The term Career Pathway Program (CPP) refers to programs that have been developed for purposes of establishing student eligibility under the ATB alternatives but have not yet been approved by the Department.
ATB State Process (34 CFR § 668.156)
For a State to have its first State process approved by the Department, the State must submit the information listed in the attachment to atbstateprocess@ed.gov. You can also submit questions that you have about the State process to that mailbox. There is no deadline for submission of the information, and States may submit the information on a rolling basis after July 1, 2024.
If an application is approved during a payment period, an enrolled student can receive a Federal Pell Grant for the entire payment period in which the State was approved. A student can receive a Federal Direct Loan for the entire period of enrollment, which could be the academic year.
Per 34 CFR § 668.156(b), the first State process (first/initial application) approval will last two years. Per 34 CFR § 668.156(e), a State will then be required to submit a subsequent application if it seeks to continue participation after the two-year period. We encourage States to submit the subsequent application well before the expiration of their first approval to ensure continued Title IV eligibility of its State process. If a State process expires, any student admitted prior to the expiration of the State process will continue Title IV eligibility; however, no new students can enroll in a participating institution with an expired State process until the State resubmits an application, and it is approved by the Department.
Any State which had a State process approved by the Department prior to July 1, 2024, should submit for re-approval prior to the expiration of its current approval. These states are only required to submit information listed under “All State Process Applications” and “Subsequent State Process Applications” in the attachment.
A. REQUIREMENTS FOR STATE PROCESS APPLICATIONS
1. All State Process Applications (First and Subsequent) Must Contain the Following:
34 CFR 668.156 – Approved State Process |
Requirements for ALL applications for approval |
Check here when complete |
(a)(2)(i) |
1. List every postsecondary institution in the State that will participate in the State process. |
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(a)(2)(ii) |
2. Provide a brief overview of the requirements that participating institutions must meet to offer ATB through the state process. Please provide two pages or less. |
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(a)(2)(iv) |
3. Provide a brief overview of student eligibility criteria for participation in the State process. This does not need to be a copy of each participating institution’s admission policy. Please provide one page or less describing the overall method for determining student eligibility. |
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(a)(2)(iii) |
4. Provide a certified statement that all CPPs in which a student can enroll and receive Title IV aid meet the requirements outlined later in this DCL for “Eligible Career Pathway Program” See 34 CFR § 668.157. |
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GO TO THE FIRST OR SUBSEQUENT APPLICTION SECTIONS FOR FURTHER INSTRUCTIONS |
2. First State Process Application – Two-Year Approval
34 CFR 668.156 – Approved State Process |
Additional requirements for the FIRST application |
Check here when complete |
(a)(2)(v) |
1. Provide a statement that not more than 33 percent of the participating institution's undergraduate regular students withdrew from the institution during the institution's latest completed award year. Include in the statement the raw numbers outlined in the calculation in 34 CFR 668.156(a)(2)(v) for each participating institution. |
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(b)(2) |
2. Provide a certified statement establishing how the State will ensure that the total number of students who enroll through the State process during the initial period will total no more than the greater of 25 students or 1.0 percent of enrollment at each institution participating in the State process.* If an institution exceeds this number, the State must require the participating institution to reduce its number of students enrolled through the State process. If the participating institution refuses, the State must terminate the participation of the institution in the State process and must notify the relevant regional office and atbstateprocess@ed.gov mailbox of the termination. * This is the total number of students that a participating institution can enroll through the State process (not per ECPP). Additional ATB students can be enrolled through the ATB test alternative or the 6 credit/225 clock hour alternative. |
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(c)(2) and (c)(3) |
3. Provide a certified statement establishing that the State will monitor on an annual basis each participating institution’s compliance with requirements (2) and (3) under “Requirements for ALL applications for approval,” and require corrective action if a participating institution is found to be in noncompliance. |
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(c)(5) and (c)(6) |
4. Provide a certified statement establishing that the State will terminate an institution from the State process and prohibit participation of that institution in the State process for at least five years, if the participating institution refuses or fails to comply with the State process requirements under requirements (2) and (3) under “Requirements for ALL applications for approval.” |
3. Subsequent State Process Application – up to Five-Year Approval
34 CFR 668.156 – Approved State Process |
Additional requirements for the SUBSEQUENT (AFTER THE FIRST) application |
Check here when complete |
(a)(2)(v) |
1. For an institution listed for the first time on the application, provide a statement that not more than 33 percent of the participating institution’s undergraduate regular students withdrew from the institution during the institution's latest completed award year. Include the raw numbers outlined in the calculation in paragraph 34 CFR § 668.156(a)(2)(v) for each participating institution. This is only a requirement for a participating institution listed for the FIRST time. If the same participating institutions are listed from your State’s first application for a State process, you do not need to provide the withdrawal rates again. |
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(c)(2) and (c)(3) |
2. Provide a certified statement establishing that the State will monitor each participating institution’s compliance with requirements (2) and (3) under “Requirements for ALL applications for approval,” and require corrective action if a participating institution is found to be in noncompliance. Review must be done on an annual basis. * Note that participating institutions listed in the “First State Process Application” are not limited to the cap on enrollment. |
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(c)(5) and (c)(6) |
3. Provide a certified statement establishing that the State will terminate an institution from the State process and prohibit participation of that institution in the State process for at least five years, if the participating institution refuses to or fails to comply with the State process requirements under requirements (2) and (3) under “Requirements for ALL applications for approval.” |
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(e)(1) and (j)(1)(iii) |
4. Provide the success rate for each participating institution. The success rate for students without a high school diploma enrolled through the State process must be within 85% of the success rate of students with a high school diploma. The success rate calculation is defined under 34 CFR § 668.156(f). The Department has provided an example of this calculation. If 50 percent or more of the participating institutions across all States do not meet the success rate upon submission of the subsequent application, then the Secretary may, but is not required to, lower the success rate to no less than 75 percent for two years |
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(e)(3) |
5. States should provide a narrative of the economic circumstances for the typical student that enrolls through the State process. Include a description of successes and failures regarding overall educational attainment of participating students. The description should also include things that can be improved. To the extent available, provide the numbers of participating students at each participating institution by race, gender, age, economic circumstances, and educational attainment. If the enrollment figures are too low to report, because, for example, the reporting could create privacy concerns, the State can note that the participating institution declines to provide demographic information and provide the reason why. The Department will not provide an exhaustive list or reasons why an institution can decline providing demographic information. Once a State describes the reasons in its application, the Department will decide if the rationale is sufficient. |
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B. SUCCESS RATE CALCULATION EXAMPLE (34 CFR 668.156(f))
The State of X submitted its first application and was approved on July 1, 2025. The State decides to submit a subsequent application for continued participation on January 1, 2027, because the expiration of its initial State process is July 1, 2027. Each individual participating institution must use the data from the latest complete award year for which information is available. For the State of X that would be the 2025-2026 award year.
Student with a high school Diploma Calculation Steps
STEP 1
Calculation |
Number of Students |
Determine the number of students with high school diplomas who enrolled in the same ECPP(s) as students participating in the State Process |
100 |
Subtract the number of those students who withdrew or were expelled and who received a 100 percent refund of tuition |
10 |
Result (denominator for Step 2) |
= 90 |
STEP 2
Calculation |
Number of Students |
Determine the number of students with high school diplomas or equivalent who enrolled in the same ECPP(s) as students participating the States process and |
|
1) Successfully completed an eligible program |
20 + |
2) Remained enrolled in an eligible program at the end of the award year; or |
20 + |
3) Successfully transferred to and remained enrolled in another institution at the end of the award year |
5 |
Result (Numerator of the success rate calculation) |
= 45 |
STEP 3
Calculation |
Number of Students |
Result from Step 2 (All who completed, remained enrolled, or transferred) |
45 |
Result from Step 1 (All enrolled minus those who withdrew or were expelled with 100% refund) |
/90 |
Step 2/Step1 (Success Rate) |
50% |
Student without a high school Diploma Calculation Steps
STEP 4
Calculation |
Number of Students |
Determine the number of students without a high school diploma who enrolled in the same ECPP(s) as students participating in the State Process |
10 |
Subtract the number of those students who withdrew or were expelled and who received a 100 percent refund of tuition |
- 1 |
Result (denominator for Step 2) |
= 9 |
STEP 5
Calculation |
Number of Students |
Determine the number of students without a high school diploma or equivalent who enrolled in the same ECPP(s) as students participating the States process and |
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1) Successfully completed an eligible program |
1 + |
2) Remained enrolled in an eligible program at the end of the award year; or |
2 + |
3) Successfully transferred to and remained enrolled in another institution at the end of the award year |
1 |
Result (Numerator of the success rate calculation) |
= 4 |
STEP 6
Calculation |
Number of Students |
Result from Step 5 (All who completed, remained enrolled, or transferred) |
4 |
Result from Step 4 (All enrolled minus those who withdrew or were expelled with 100% refund) |
/9 |
Step 2/Step1 (Success Rate) |
= 44.4444% |
STEP 7
Calculation |
Success Rates |
Success Rate for students without a high school diploma (Step 6) |
44.4444% |
Success Rate for students with a high school diploma (Step 3) |
/50% |
Overall success rate |
= 88.8889%. Since this result is greater than 85 percent, the success rate meets the regulatory requirements. |
Important Things to Remember When Applying for State Process Approval:
1. The initial State process approval will be for a two-year period. The Department’s approval of a subsequent State process may be for a period not to exceed five years, though the approval may be for fewer than five years. States must continue to reapply for approval to remain able to use the State process alternative (34 CFR 668.156(i)).
2. If the Department does not respond to a State process request for approval within six months of receipt, then the State process is deemed approved, and students can enroll in the ECPPs at the participating institutions and receive Title IV aid for two years with an initial application, or five years with a subsequent application (34 CFR 668.156(d)(2)(ii)).
3. The Department may publish a notice in the Federal Register requesting additional data from States with an approved State Process. Deadlines and procedures will be clearly established in the notice. The Department will provide States with ample time to collect and report data (34 CFR 668.156(h).
4. The Department has discretion to terminate approval of a State process if it determines that the information that the State submitted as a basis for approval is inaccurate or if a State is violating any of the terms of its approval. A State can appeal the termination of approval by emailing atbstateprocess@ed.gov. If the State decides not to appeal, or the termination is upheld after appeal, then the State cannot reapply to the Secretary for a period of five years (34 CFR 668.156(j).
B. Eligible Career Pathway Program (34 CFR § 668.157)
Institutions relying on the ATB ECPP alternatives to establish student eligibility for Title IV funds must be able to document that each ATB ECPP offered by the institution meets the eligibility requirements detailed in the cited regulation. That documentation must be provided to the Department when obtaining initial approval for the ATB CPP or when requested by the Department.
Institutions that offered one or more ATB CPPs prior to July 1, 2024, must apply to the Department to have one of its CPPs certified as eligible for Title IV purposes by the earlier of:
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The submission of any update the institution makes to the Electronic Eligibility Application (E-App) on or after January 1, 2025; or
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The submission of the institution’s recertification application on or after January 1, 2025.
At that time, institutions will need to upload documentation using the E-App to demonstrate that one of its CPPs meets the eligibility requirements. The institution will also be expected to provide a list of all other ATB CPPs and certify that they meet the regulatory requirements (34 CFR 668.157(b)(2)). The Department reserves the right to request documentation for other programs if circumstances warrant (34 CFR 668.157(e)). If the Department determines that the CPPs do not meet the regulatory requirements, students enrolling in the programs may not use the ATB alternatives to establish Title IV eligibility. Students already enrolled under the ATB CPP alternatives will remain eligible for Title IV funding.
For institutions that have not offered an ATB CPP prior to July 1, 2024, the institution must submit an E-App with supporting documentation and receive approval from the Department prior to awarding Title IV aid to prospective students. After the first CPP has been approved as eligible, the institution can offer more ATB CPPs without approval. The institution must notify the Department of additional programs and certify that all other ATB CPPs meet the regulatory eligibility requirements (34 CFR 668.157(c)(2). The Department may choose to review any subsequent ATB CPPs offered by your institution for any reason.
If the Department does not approve an ATB CPP for eligibility purposes, the institution may appeal that decision by contacting its appropriate regional office to initiate the appeal (34 CFR 668.157(d).
Documentation requirements and examples of acceptable documentation are outlined in the table below.
The acceptable documentation examples are not exhaustive. An institution can submit alternate documentation where it believes it would fulfill the documentation requirement. Once the institution submits that documentation to the Department, an eligibility analyst will provide feedback on whether the documentation meets the standards of the regulation.
34 CFR 668.157 – Eligible Career Pathway Program |
Requirement in regulation |
Non-exhaustive acceptable documentation examples |
(a) |
An institution demonstrates to the Secretary that a student is enrolled in an eligible career pathway program by documenting that— |
N/A |
(a)(1) |
The student has enrolled in or is receiving all three of the following elements simultaneously— |
N/A |
(a)(1)(i) |
An eligible postsecondary program as defined in § 668.8 |
Document that all CPPs meet the eligible program standards in 34 CFR 668.8. Additional information can be found in Volume 2 of the FSA Handbook. |
(a)(1)(ii) |
Adult education and literacy activities under the Workforce Innovation and Opportunity Act as described in 34 CFR 463.30 that assist adults in attaining a secondary school diploma or its recognized equivalent and in the transition to postsecondary education and training. |
1. Document that the program offers at least one of the activities listed in paragraphs (a) or (h) of 34 CFR 463.30 and provide a description of how it offers the activity. (Two pages or less); or |
(a)(1)(iii) |
Workforce preparation activities as described in 34 CFR § 463.34. |
Document how the CPP will help a participant acquire a combination of basic academic skills, critical thinking skills, digital literacy skills, and self-management skills. For examples see 34 CFR 463.34. (Two pages or less) This may also include: 1. Employability skills that address competencies in using resources and information, working with others, understanding systems, and obtaining skills necessary to successfully transition to and complete postsecondary education, training, and employment; or |
(a)(2) |
The program aligns with the skill needs of industries in the State or regional labor market in which the institution is located, based on research the institution has conducted, including— |
N/A |
(a)(2)(i) |
Government reports identifying in-demand occupations in the State or regional labor market |
1. A relevant report by a Federal agency completed within 5 years of initiating the CPP; |
(a)(2)(ii) |
Surveys, interviews, meetings, or other information obtained by the institution regarding the hiring needs of employers in the State or regional labor market |
1. Completed surveys sent out to by the institution to at least 10 State or regional employers noting hiring needs; |
(a)(2)(iii) |
Documentation that demonstrates direct engagement with industry |
1. Meeting minutes from local and/or State Workforce Development Boards demonstrating engagement with industry; or |
(a)(3) |
The skill needs described in paragraph (a)(2) of this section align with the specific coursework and postsecondary credential provided by the postsecondary program or other required training |
Demonstrate through narrative documentation that coursework and/or training and the credential the student will receive upon graduation from the CPP align with the skill needs of industries in the State and regional labor market. (Two pages or less) |
(a)(4) |
The program provides academic and career counseling services that assist students in pursuing their credential and obtaining jobs aligned with skill needs described in paragraph (a)(2) of this section, and identifies the individuals providing the career counseling services |
Document what career counseling service(s) will be provided to students enrolled in CPPs. (Two pages or less) |
(a)(5) |
The appropriate education is offered, concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster through an agreement, memorandum of understanding, or some other evidence of alignment of postsecondary and adult education providers that ensures the education is aligned with the students' career objectives |
1. Agreement, memorandum of understanding, or other documentation between the institution and the adult education agency or provider; or |
(a)(6) |
The program is designed to lead to a valid high school diploma as defined in § 668.16(p) or its recognized equivalent. |
Document the secondary component of the CPP. The “recognized equivalent of a high school diploma” is located in 34 CFR 600.2. The procedures to evaluate the validity of a HS diploma are in 34 CFR 668.16(p). It should be noted that although the secondary component is required in order for the program to be eligible as an ATB ECPP, the hours, credits or work in the secondary component is not eligible for Federal student aid. That component cannot be included in determining the length of the postsecondary program, the student’s Title IV enrollment status, or the cost of attendance. |
Additional Resources and Contact Information:
Please send questions regarding topics discussed in this Dear Colleague Letter through the Contact Customer Support link in Federal Student Aid’s Help Center. When submitting a question, please enter your name, email address, topic, and question. In addition, please indicate if your question relates to an open audit or program review. When selecting a topic, please select “Policy Guidance.”
Sincerely,
Dr. Nasser Paydar
Assistant Secretary
Office of Postsecondary Education