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Blog Post

Don’t Write Off Workforce Pell Grants

AEIdeas

November 25, 2024

Education Secretary nominee Linda McMahon, a former administrator of the Small Business Administration, is a proponent of expanding Pell Grants to short-term workforce education programs. In a September op-ed, McMahon boosted the Bipartisan Workforce Pell Act, which would allow students to use Pell Grants for high-quality workforce education programs as short as eight weeks in duration (the current minimum is 15 weeks).

McMahon’s critics have seized on her support of Pell Grants for workforce education. Some pointed to a new study from the Institute of Education Sciences which shows that a pilot program to provide Pell Grants for workforce education did not measurably boost students’ earnings or employment rates. But the critics’ conclusion that Pell Grants should never fund workforce education is an over-interpretation of the findings.

The study in question evaluates a pilot program under the US Department of Education’s Experimental Sites Initiative, which allows the Department to waive certain laws and regulations governing student aid in order to conduct pilot programs. The study evaluated a pilot which awarded small Pell Grants ($1,300 on average) to some students who enrolled in short-term workforce education programs at a handful of participating schools between 2012 and 2017. The researchers compared those students’ outcomes to a randomized control group, which did not receive workforce Pell aid.

The authors found that students receiving a workforce Pell Grant were 15 percentage points more likely to enroll in a short-term workforce education program, and nine percentage points more likely to finish one. However, there was no statistically significant difference in employment rates or wages between workforce Pell Grant recipients and the control group.

But this study shouldn’t lead us to write off workforce Pell Grants. The Bipartisan Workforce Pell Act, which McMahon endorsed, would not simply open up the floodgates to anything calling itself a short-term workforce training program. To qualify for federal funding, workforce programs would have to meet high standards, including a minimum 70 percent completion rate and a 70 percent job placement rate. Critically, there’s also an earnings standard: one year after completion, the median student’s earnings must exceed $22,590 plus the price of tuition.

It’s likely that many of the ineffective workforce education programs evaluated in the pilot would not qualify for Pell Grants, given these strict guardrails. This is sensible: While short term workforce education should be an option for students, allowing the use of federal money for any program regardless of quality would likely support some questionable initiatives. The study’s authors even acknowledge that their findings could be different if Pell expansion were conditioned on outcomes standards.

In practice, there are many examples of workforce education programs with excellent outcomes. Virginia’s community colleges offer a program called FastForward, which enrolls mostly students with no college experience and increases their annual earnings by an average of $4,000. High-quality programs such as FastForward shouldn’t lose out on federal funding simply because other workforce education courses demonstrate worse outcomes.

Policymakers should adopt a posture of “low barriers, high standards.” Workforce education programs shouldn’t be excluded simply because they fail to meet an arbitrary threshold of weeks in the classroom. However, the government should demand that all federally-funded programs, short-term or not, meet adequate performance benchmarks or lose access to their taxpayer subsidies.

The nature of innovation is that some new ideas will work, and others won’t. Rather than shutting down ideas like workforce Pell Grants outright, policymakers should allow continued experimentation—but be willing to pull the plug if outcomes aren’t up to snuff.

Secretary-designate Linda McMahon’s enthusiasm for workforce education is encouraging. While the decision to expand Pell Grants to workforce education programs belongs to Congress, pro-innovation leadership at the Education Department will be key to implementing the Bipartisan Workforce Pell Act if it passes. If confirmed, McMahon will be in a good position to support new ideas in postsecondary education, with appropriate safeguards.