ASA Blog

NOVEMBER 5, 2019

Will expanding federal Pell Grants to education and training programs shorter than 15 weeks help solve the “skills gap” in today’s U.S. workforce? Would an expanded Pell program benefit students or employers? Should the federal government be subsidizing pathways to “good” jobs or those in high demand?

These thought-provoking questions and more were debated at a recent policy forum convened by American Student Assistance (ASA) at the U.S. Capitol in Washington, DC. Andrew Kreighbaum of Bloomberg Government moderated the panel, which included Kermit Kaleba of the National Skills Coalition; David Baime, American Association of Community Colleges; Mary Alice McCarthy, New America Foundation; and Lanae Erickson with Third Way.

Certificates and industry-recognized credentials earned through short-term programs can offer students a faster and lower-cost pathway into the workforce than a traditional degree. These shorter alternative education pathways have become a subject of debate because need-based federal Pell Grants, which provide as much as $6,195 annually and do not need to be paid back, cannot currently be used for certificate programs shorter than 15 weeks (600 hours or 16 semester credit hours). For policymakers, this has raised questions about whether short-term certificate seekers should be eligible to use federal aid to pursue workforce programs. As momentum has grown among business leaders, higher education groups and student advocates in favor of short-term Pell, policymakers have introduced multiple bills to expand the grant program, including most recently the JOBS Act, the Student Aid Improvement Act of 2019, and the College Affordability Act.

With no movement on the issue at the federal level, some states are experimenting on their own. “Virginia’s FastForward program provides grant funding for non-credit programs,” explained Kaleba. “FastForward graduates typically see wage increases of 25 to 50 percent, and 90 percent of graduates land jobs that offer health benefits.” FastForward costs are shared among the state, students and course providers, and outcomes are strong, according to Kaleba.

Programs like FastForward might be doing a good job of preparing students for in-demand jobs, argued Erickson, but are they good jobs? “Pell should ultimately benefit students, not employers,” she argued, and pointed out that research has shown many short-term training programs don’t leave students better off. Federal funding should be used to help students land good jobs with family sustaining wages – not to help employers fill jobs that may be in high demand, but don’t offer upward mobility, she said.

Baime agreed that short-term programs don’t always help students jump to a higher economic class, but even smaller wage gains can make a great deal of difference. “Community college presidents recognize that even their two-year programs can be too costly for some students,” he stated. “Support for the JOBS Act is coming directly from the college president level because they see what a dramatic impact these programs can have on individual students’ lives.”

For her part, McCarthy raised concerns about opening the floodgates of federal grant aid to non-credit programs, making the case that many of the FastForward funded programs were for poverty-level jobs with tremendous turnover. “It matters what types of jobs these are,” she said, echoing Erickson’s concerns over using federal funding to alleviate employers’ workforce training costs. “Whose problem are we trying to solve?”

While panelists’ views differed on many aspects, all agreed that a lack of data about short-term programs and their outcomes makes quality assurance difficult. Most also agreed that short-term Pell should not be extended to for-profit institutions, except Baime, who was less concerned about bad actors: “For-profits have more incentive to offer longer, more expensive programs.”

Panelists also sparred over the Pell expansion price tag, with Kaleba pointing out that the official Congressional Budget Office (CBO) estimate is only $1.7 billion, a small sliver of the entire federal education budget. McCarthy, though, put little stock in the CBO assessment. “We need more information so we’re not flying blind,” she cautioned. Both McCarthy and Erickson suggested implementing short-term Pell on a pilot basis. “Once non-credit programs are allowed access to Pell, it will be very difficult to get them out,” warned McCarthy, given the strong lobby of educational institutions in DC. “The expansion could one day threaten the entire Pell program.”

Ultimately, the debate over whether to expand Pell to shorter programs raises timely questions about how financial aid can and should be used to support our nation’s education and workforce priorities. Given how necessary earning a postsecondary credential has become in today’s economy, the panelists agreed that lawmakers face important conversations about how to direct federal resources to programs that will ultimately prepare students for success in the workforce.

ASA looks forward to continuing this dialogue and other important policy conversations as lawmakers work on a reauthorization of the Higher Education Act. Read more about the benefits and drawbacks of short-term Pell and our policy recommendations here.

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