In July, Congress passed a budget reconciliation bill, H.R. 1, that expanded Pell Grant eligibility to students enrolled in certain short-term job training programs, known broadly as Workforce Pell. Previously, Pell Grants could only be used in programs that lasted at least fifteen weeks. The new law extends eligibility to programs that are between eight and fifteen weeks in length, and includes some outcome standards aimed at ensuring program quality and a requirement that programs are “stackable”—that is, they can be applied to progress toward a degree or other academic credential. The law directs the U.S. Department of Education to make Workforce Pell available to students on July 1, 2026.
The expansion of the Pell Grant program could create new opportunities for students and workers, building on state investments in short-term training programs at community colleges that are aligned to high-growth and high-wage industries. To date, most of these state funded short-term programs have not conferred academic credit and typically culminate with an industry-recognized credential. Applying the new key guardrails in the Workforce Pell legislation to such programs, such as requiring them to exceed a tuition-to-earnings floor and to offer on-ramps to credit-bearing programs, could catalyze broader improvement in state systems to bring greater accountability and quality to the growing field of nondegree credentials. However, Workforce Pell also introduces risks: overall evidence on the employment and earnings benefits of short-term training programs is mixed, raising concerns that students could exhaust some of their limited Pell eligibility, or even take on debt, to attend low-value programs.
States’ actions in the coming months and years will determine whether the expansion of Pell grants leads to strengthened accountability and quality in nondegree credentials, or to a riskier future for students. Under the new law, states are responsible for developing and implementing an approval process to determine which programs qualify for Workforce Pell. In this role, states have the opportunity to design and implement approval and oversight processes that maximize benefits and minimize risks to students. Absent advance planning, states will risk missing the opportunity to train students for high-wage jobs and rather may waste students’ time, money, and financial aid on programs that leave them no better off. Eight practical recommendations for states are set out below.
1. Plan for a phased, multiyear rollout.
Workforce Pell will require major changes in the way that short-term programs are currently tracked, from enrollment to outcomes, and in the way that they connect to credit-bearing academic pathways. While the U.S. Department of Education is just launching the process of developing regulations to implement the program, states should not wait for federal regulations to start planning for state implementation. States should bring together stakeholders from higher education, workforce and economic development, state consumer protection agencies, community, and industry to plan for what will certainly be a multiyear implementation.
Research indicates that, currently, only a small share of existing noncredit programs will qualify for Workforce Pell, based on requirements for length, articulation, and earnings gains. Rather than rushing to retool and approve additional programs for Workforce Pell, states should take a deliberate approach that ensures students receive high-quality training and robust economic returns in exchange for their valuable time and limited Pell Grant dollars. States should take a phased approach, starting with a first phase in July 2026 using a list of programs that already have been demonstrated to lead to high-skill, high-wage, and in-demand occupations and have a track record of producing earnings gains—including for disadvantaged workers—and then gradually expand the list to include other programs that show evidence of promising outcomes for students in a second phase of programs in 2027.
States should allocate funds to support community colleges’ efforts to establish and scale up Workforce Pell eligible programs that are carefully designed to meet industry demands, taking advantage of new federal funding to build quality short-term programs. Such efforts could include allocating funding for planning grants to support community colleges’ development of the industry partnerships necessary for high-quality program development, redesign, or expansion.
The law expanding Pell requires that, in order to be eligible, a program must provide a pathway to receiving academic credit toward a certificate or degree. States can capitalize on this requirement by developing talent pathways that start with career and technical education in K–12, continue through credentialing programs supported by Workforce Pell, and then extend into associate degrees and beyond, with students picking up industry-recognized credentials along the way. Workforce Pell programs that already fit into these high-value pathways should be a top priority for approval in the first phase.
2. Ensure that employers commit to hiring students from Workforce Pell programs for high-wage jobs.
It’s not enough to have industry involvement in validating credentials—students also need companies to commit to hiring short-term training graduates. Improving hiring outcomes starts with designing programs in ways that expose students to employers while they are studying. States should prioritize programs that have a work-based learning component, especially where that work-based learning component enables students to move directly into a high-quality job or leads to participation in a registered apprenticeship program. Students should be paid during the work-based learning component, which facilitates participation in training. Work-based learning components not only help prepare students for employment, such as through internship or other work experiences, but can also help colleges create hiring arrangements with local employers. On-the-job training for incumbent workers that provides credentials that allow for advancement and academic credit is another promising use of Workforce Pell dollars. States need to ensure that colleges maintain dynamic partnerships with employers in their community to facilitate employment, even in those programs that don’t include work-based learning.
3. Protect students from the riskiest providers.
States should develop safeguards to protect students from enrolling with training providers that pose heightened risk of poor outcomes, including for-profit colleges. For-profit colleges’ incentive to maximize profits for owners and shareholders has led to widespread predatory practices, including the use of deceptive recruiting practices. For-profits also have weaker outcomes: students at for-profit colleges are more likely to take on debt and default on their loans. For-profit college students also experience worse labor market outcomes. For-profit providers also have a troubling record of falsifying their job placement rates and other outcome data.
States should prioritize Workforce Pell participation by programs offered by community colleges and other public and nonprofit providers with a record of strong outcomes. Where for-profit providers are approved, states must institute safeguards, including:
- barring providers that have a record of consumer protection violations or failure to comply with reporting requirements from eligibility;
- providing a mechanism for students to submit complaints about provider misconduct;
- devoting adequate resources to enforcement and oversight by state regulators and state attorneys general, including resources for verifying outcomes data and investigating consumer complaints; and
- terminating program approval for providers that fail to comply with requirements, including data submission requirements.
Programs operated by online program management companies (OPMs)—for-profit companies that partner with colleges to offer online programs—also pose heightened risks. OPMs provide marketing, recruiting, and sometimes instruction. In many cases, the OPM’s role is not disclosed. OPMs are frequently paid based on the number of students they recruit. These “tuition sharing” arrangements incentivize OPMs to maximize enrollment and have given rise to alleged deceptive recruiting practices. To address this risk, states should prohibit such arrangements for OPM-operated programs that participate in Workforce Pell and should require disclosure of the OPM’s role.
4. Protect students from taking on harmful debt.
Evidence of whether short-term training programs improve employment and earnings outcomes is mixed: while some short-term training programs can lead to employment and earnings gains, results vary widely by field of study. A study of a 2011 pilot Pell Grant expansion to short-term workforce training programs found that the expansion did not increase students’ employment or earnings in the medium to long term. These results suggest that Workforce Pell students face a risk of wasting their time and exhausting part of their Pell Grant eligibility on programs that provide little or no benefit. Worse still, some students may borrow federal or private loans or take on credit card debt to afford tuition costs not covered by Pell for programs that don’t deliver value.
During the 2011 Pell Grant expansion pilot, which was offered at public two-year colleges, 9 percent of participants took out federal loans, averaging $4,021. Since the new Workforce Pell program expands eligibility beyond community colleges to more expensive providers, an even higher percentage of students may take on debt to attend Workforce Pell programs, and in higher amounts. To protect students from taking on harmful debt, state approval processes should exclude programs that charge students more than the maximum amount of Pell Grant funding available for the program, unless the difference is covered by an employer, a state aid program, or the institution. Alternatively, states could prioritize approval of programs that do not push students into debt. For example, states could consider prioritizing approving such programs for Workforce Pell eligibility in the first phase, as described in step 1 above.
5. Require accreditor review.
By statute, programs can qualify for Workforce Pell only where they are offered by accredited, Title IV-eligible institutions. This requirement is intended as a quality safeguard: accreditors are tasked with creating and enforcing quality standards for Title IV institutions. However, not all accreditors include noncredit programs in the scope of their oversight. This creates a potential gap in quality review for Workforce Pell programs.
To address this gap, states should require accreditor review of such programs as a condition of program eligibility for Workforce Pell. While accreditors are making moves to review short-term programs, some institutions may need to change accreditors, add a programmatic accreditor, or encourage an existing accreditor to expand the scope of their program review in order to meet an accreditor-review requirement. Accordingly, states should provide a substantial grace period before an accreditor program-review requirement goes into effect, to give institutions and accreditors time to make any changes that would be needed to meet the requirement.
6. Build and maintain robust data systems.
States should prioritize the establishment and/or maintenance of statewide longitudinal data systems (SLDS) to enable regulators to evaluate program eligibility for Workforce Pell and track program effectiveness across education and training programs. Data systems should integrate data on both credit- and non-credit-bearing programs and ideally encompass cross-agency data including K–12, postsecondary, and workforce development agency data. Data systems should include a broad range of data, including data on student outcomes and demographics.
States should also provide data to the public through an interactive College Scorecard-style online tool. The tool should feature a dashboard that permits prospective students to compare program costs, student debt burdens, program length, completion rates, stackability, and earnings and employment outcomes. Students should be able to use the tool to compare programs within and across institutions.
7. Measure whether programs produce meaningful, sustained earning gains.
Workforce Pell programs must meet an earnings requirement demonstrating a meaningful return on investment. States should require programs to measure and publicly report outcomes data—starting with how much students can expect their earnings to increase if they complete—and use Workforce Pell implementation to bring that kind of accountability and transparency to all training programs. To that end, states should require programs to measure and publish pre- and post-program earnings at standardized intervals (for example, average earnings for the two to four quarters before participants start the program; and earnings at four, eight, and twelve quarters after participants exit). States should support this transparency by creating standardized statewide data systems that connect to both state unemployment insurance wage records and higher education data. While pre-to-post earnings changes are not a perfect measure of a program’s causal impact, this measure is a significant improvement over the current workforce system measures. For example, the Workforce Innovation and Opportunity Act (WIOA) only requires programs to report post-program earnings two and four quarters after exit. Over time, this information could be supplemented for select programs by rigorous evaluations that investigate how these metrics relate to programs’ causal impacts, as well as how participants’ earnings evolve over longer periods, such as five or ten years after exit (see step 8).
8. Require institutions to undergo a rigorous evaluation of their programs.
Workforce Pell increases the urgency for states to understand the outcomes of short-term non-degree credential programs. As states plan for Workforce Pell, they should require that institutions participate in rigorous evaluations of their short-term programs. States should set aside funding to support evaluations of 5 percent of the Workforce Pell-eligible programs in their state each year. Evaluations should target a diverse array of programs across sectors, occupations, geographies, institution types, and program designs.
Rigorous evaluations can allow states and institutions to compare similarly situated students, to test whether workforce credential programs improve their economic outcomes, particularly whether they lead to sustained earnings gains in the long term. When possible, states should consider leveraging public institutions of higher education as evaluators or partners to take advantage of these institutions’ existing connections to state longitudinal data systems.
Conclusion
In enacting Workforce Pell, Congress responded to years of bipartisan interest in expanding federal financial aid to the growing portfolio of short-term workforce training programs at community colleges and other higher education institutions. Much of this interest has come from state-funded programs that have been targeted at a limited number of high-wage occupations and require close connection to local employers’ needs. As Workforce Pell makes federal funding available to a wider range of programs, states need to take the reins and ensure that these newly available federal dollars deliver a positive return on investment for students and for their state’s economy. The mixed track of short-term programs overall, and the unfortunate history of institutions that have profited off of student’s federal financial aid, heighten the need for vigorous oversight and planning as Workforce Pell rolls out.
Tags: workforce, federal financial aid, Pell Grants, job training
Eight Steps States Should Take to Get Workforce Pell Right for Students and Workers
In July, Congress passed a budget reconciliation bill, H.R. 1, that expanded Pell Grant eligibility to students enrolled in certain short-term job training programs, known broadly as Workforce Pell. Previously, Pell Grants could only be used in programs that lasted at least fifteen weeks. The new law extends eligibility to programs that are between eight and fifteen weeks in length, and includes some outcome standards aimed at ensuring program quality and a requirement that programs are “stackable”—that is, they can be applied to progress toward a degree or other academic credential. The law directs the U.S. Department of Education to make Workforce Pell available to students on July 1, 2026.1
The expansion of the Pell Grant program could create new opportunities for students and workers, building on state investments in short-term training programs at community colleges that are aligned to high-growth and high-wage industries. To date, most of these state funded short-term programs have not conferred academic credit and typically culminate with an industry-recognized credential. Applying the new key guardrails in the Workforce Pell legislation to such programs, such as requiring them to exceed a tuition-to-earnings floor and to offer on-ramps to credit-bearing programs, could catalyze broader improvement in state systems to bring greater accountability and quality to the growing field of nondegree credentials. However, Workforce Pell also introduces risks: overall evidence on the employment and earnings benefits of short-term training programs is mixed, raising concerns that students could exhaust some of their limited Pell eligibility, or even take on debt, to attend low-value programs.
States’ actions in the coming months and years will determine whether the expansion of Pell grants leads to strengthened accountability and quality in nondegree credentials, or to a riskier future for students. Under the new law, states are responsible for developing and implementing an approval process to determine which programs qualify for Workforce Pell. In this role, states have the opportunity to design and implement approval and oversight processes that maximize benefits and minimize risks to students. Absent advance planning, states will risk missing the opportunity to train students for high-wage jobs and rather may waste students’ time, money, and financial aid on programs that leave them no better off. Eight practical recommendations for states are set out below.
1. Plan for a phased, multiyear rollout.
Workforce Pell will require major changes in the way that short-term programs are currently tracked, from enrollment to outcomes, and in the way that they connect to credit-bearing academic pathways. While the U.S. Department of Education is just launching the process of developing regulations to implement the program,2 states should not wait for federal regulations to start planning for state implementation. States should bring together stakeholders from higher education, workforce and economic development, state consumer protection agencies, community, and industry to plan for what will certainly be a multiyear implementation.
Research indicates that, currently, only a small share of existing noncredit programs will qualify for Workforce Pell, based on requirements for length, articulation, and earnings gains. Rather than rushing to retool and approve additional programs for Workforce Pell, states should take a deliberate approach that ensures students receive high-quality training and robust economic returns in exchange for their valuable time and limited Pell Grant dollars. States should take a phased approach, starting with a first phase in July 2026 using a list of programs that already have been demonstrated to lead to high-skill, high-wage, and in-demand occupations and have a track record of producing earnings gains—including for disadvantaged workers—and then gradually expand the list to include other programs that show evidence of promising outcomes for students in a second phase of programs in 2027.
States should allocate funds to support community colleges’ efforts to establish and scale up Workforce Pell eligible programs that are carefully designed to meet industry demands, taking advantage of new federal funding to build quality short-term programs. Such efforts could include allocating funding for planning grants to support community colleges’ development of the industry partnerships necessary for high-quality program development, redesign, or expansion.
The law expanding Pell requires that, in order to be eligible, a program must provide a pathway to receiving academic credit toward a certificate or degree.3 States can capitalize on this requirement by developing talent pathways that start with career and technical education in K–12, continue through credentialing programs supported by Workforce Pell, and then extend into associate degrees and beyond, with students picking up industry-recognized credentials along the way. Workforce Pell programs that already fit into these high-value pathways should be a top priority for approval in the first phase.
2. Ensure that employers commit to hiring students from Workforce Pell programs for high-wage jobs.
It’s not enough to have industry involvement in validating credentials—students also need companies to commit to hiring short-term training graduates. Improving hiring outcomes starts with designing programs in ways that expose students to employers while they are studying. States should prioritize programs that have a work-based learning component, especially where that work-based learning component enables students to move directly into a high-quality job or leads to participation in a registered apprenticeship program. Students should be paid during the work-based learning component, which facilitates participation in training. Work-based learning components not only help prepare students for employment, such as through internship or other work experiences, but can also help colleges create hiring arrangements with local employers. On-the-job training for incumbent workers that provides credentials that allow for advancement and academic credit is another promising use of Workforce Pell dollars. States need to ensure that colleges maintain dynamic partnerships with employers in their community to facilitate employment, even in those programs that don’t include work-based learning.
3. Protect students from the riskiest providers.
States should develop safeguards to protect students from enrolling with training providers that pose heightened risk of poor outcomes, including for-profit colleges. For-profit colleges’ incentive to maximize profits for owners and shareholders has led to widespread predatory practices, including the use of deceptive recruiting practices. For-profits also have weaker outcomes: students at for-profit colleges are more likely to take on debt and default on their loans. For-profit college students also experience worse labor market outcomes. For-profit providers also have a troubling record of falsifying their job placement rates and other outcome data.
States should prioritize Workforce Pell participation by programs offered by community colleges and other public and nonprofit providers with a record of strong outcomes. Where for-profit providers are approved, states must institute safeguards, including:
Programs operated by online program management companies (OPMs)—for-profit companies that partner with colleges to offer online programs—also pose heightened risks. OPMs provide marketing, recruiting, and sometimes instruction. In many cases, the OPM’s role is not disclosed. OPMs are frequently paid based on the number of students they recruit. These “tuition sharing” arrangements incentivize OPMs to maximize enrollment and have given rise to alleged deceptive recruiting practices. To address this risk, states should prohibit such arrangements for OPM-operated programs that participate in Workforce Pell and should require disclosure of the OPM’s role.
4. Protect students from taking on harmful debt.
Evidence of whether short-term training programs improve employment and earnings outcomes is mixed: while some short-term training programs can lead to employment and earnings gains, results vary widely by field of study. A study of a 2011 pilot Pell Grant expansion to short-term workforce training programs found that the expansion did not increase students’ employment or earnings in the medium to long term. These results suggest that Workforce Pell students face a risk of wasting their time and exhausting part of their Pell Grant eligibility on programs that provide little or no benefit. Worse still, some students may borrow federal or private loans or take on credit card debt to afford tuition costs not covered by Pell for programs that don’t deliver value.
During the 2011 Pell Grant expansion pilot, which was offered at public two-year colleges, 9 percent of participants took out federal loans, averaging $4,021. Since the new Workforce Pell program expands eligibility beyond community colleges to more expensive providers, an even higher percentage of students may take on debt to attend Workforce Pell programs, and in higher amounts. To protect students from taking on harmful debt, state approval processes should exclude programs that charge students more than the maximum amount of Pell Grant funding available for the program, unless the difference is covered by an employer, a state aid program, or the institution. Alternatively, states could prioritize approval of programs that do not push students into debt. For example, states could consider prioritizing approving such programs for Workforce Pell eligibility in the first phase, as described in step 1 above.
5. Require accreditor review.
By statute, programs can qualify for Workforce Pell only where they are offered by accredited, Title IV-eligible institutions. This requirement is intended as a quality safeguard: accreditors are tasked with creating and enforcing quality standards for Title IV institutions. However, not all accreditors include noncredit programs in the scope of their oversight. This creates a potential gap in quality review for Workforce Pell programs.
To address this gap, states should require accreditor review of such programs as a condition of program eligibility for Workforce Pell. While accreditors are making moves to review short-term programs, some institutions may need to change accreditors, add a programmatic accreditor, or encourage an existing accreditor to expand the scope of their program review in order to meet an accreditor-review requirement. Accordingly, states should provide a substantial grace period before an accreditor program-review requirement goes into effect, to give institutions and accreditors time to make any changes that would be needed to meet the requirement.
6. Build and maintain robust data systems.
States should prioritize the establishment and/or maintenance of statewide longitudinal data systems (SLDS) to enable regulators to evaluate program eligibility for Workforce Pell and track program effectiveness across education and training programs. Data systems should integrate data on both credit- and non-credit-bearing programs and ideally encompass cross-agency data including K–12, postsecondary, and workforce development agency data. Data systems should include a broad range of data, including data on student outcomes and demographics.
States should also provide data to the public through an interactive College Scorecard-style online tool. The tool should feature a dashboard that permits prospective students to compare program costs, student debt burdens, program length, completion rates, stackability, and earnings and employment outcomes. Students should be able to use the tool to compare programs within and across institutions.
7. Measure whether programs produce meaningful, sustained earning gains.
Workforce Pell programs must meet an earnings requirement demonstrating a meaningful return on investment.5 States should require programs to measure and publicly report outcomes data—starting with how much students can expect their earnings to increase if they complete—and use Workforce Pell implementation to bring that kind of accountability and transparency to all training programs. To that end, states should require programs to measure and publish pre- and post-program earnings at standardized intervals (for example, average earnings for the two to four quarters before participants start the program; and earnings at four, eight, and twelve quarters after participants exit). States should support this transparency by creating standardized statewide data systems that connect to both state unemployment insurance wage records and higher education data. While pre-to-post earnings changes are not a perfect measure of a program’s causal impact, this measure is a significant improvement over the current workforce system measures.6 For example, the Workforce Innovation and Opportunity Act (WIOA) only requires programs to report post-program earnings two and four quarters after exit. Over time, this information could be supplemented for select programs by rigorous evaluations that investigate how these metrics relate to programs’ causal impacts, as well as how participants’ earnings evolve over longer periods, such as five or ten years after exit (see step 8).
8. Require institutions to undergo a rigorous evaluation of their programs.
Workforce Pell increases the urgency for states to understand the outcomes of short-term non-degree credential programs. As states plan for Workforce Pell, they should require that institutions participate in rigorous evaluations of their short-term programs. States should set aside funding to support evaluations of 5 percent of the Workforce Pell-eligible programs in their state each year. Evaluations should target a diverse array of programs across sectors, occupations, geographies, institution types, and program designs.
Rigorous evaluations can allow states and institutions to compare similarly situated students, to test whether workforce credential programs improve their economic outcomes, particularly whether they lead to sustained earnings gains in the long term. When possible, states should consider leveraging public institutions of higher education as evaluators or partners to take advantage of these institutions’ existing connections to state longitudinal data systems.
Conclusion
In enacting Workforce Pell, Congress responded to years of bipartisan interest in expanding federal financial aid to the growing portfolio of short-term workforce training programs at community colleges and other higher education institutions. Much of this interest has come from state-funded programs that have been targeted at a limited number of high-wage occupations and require close connection to local employers’ needs. As Workforce Pell makes federal funding available to a wider range of programs, states need to take the reins and ensure that these newly available federal dollars deliver a positive return on investment for students and for their state’s economy. The mixed track of short-term programs overall, and the unfortunate history of institutions that have profited off of student’s federal financial aid, heighten the need for vigorous oversight and planning as Workforce Pell rolls out.
Notes
Tags: workforce, federal financial aid, Pell Grants, job training