Bipartisan Legislation Makes Progress on Workforce Development, But Is it Enough?

December 15, 2023
Taylor Maag

The House Education & Workforce Committee has been busy the past two weeks. On Tuesday, the Committee passed two bipartisan bills, The Workforce Pell Act and A Stronger Workforce for America Act. These policies have huge implications for our nation’s workforce development system. Here is a breakdown of what they mean and how these bills could impact American workers and businesses:

The Workforce Pell Act

The Pell Grant is the current single-largest source of federal grant aid supporting postsecondary students from low-income families. But based on current requirements, Pell Grants can’t be used for all postsecondary programs — excluding many workforce-oriented programs. The Workforce Pell Act reforms this policy and opens doors to high quality short-term workforce programs. Main highlights include:

Program Length: Expands the Pell Grant to cover high-quality short-term workforce programs. Eligible programs must be at least 150 clock hours in length and offered over a minimum of 8 weeks but no more than 15 weeks.

Quality Guardrails: Ensures these shorter term programs are high quality through an array of efforts. Programs must be stackable, lead to a portable industry recognized credential and have strong student outcomes. Programs also have to go through a “triad” approval process involving the state, an accrediting body, and the Department of Education. With these strong guardrails, the bill allows for high-impact programs provided by for-profit and online providers to be eligible for Pell in addition to existing Title IV eligible institutions, like community colleges.

Funding: Lastly, the bill would provide $40 million for fiscal year 2025 and $30 million for four additional years to implement the bill.

While this bill is a step in the right direction, at PPI we don’t believe it goes far enough. In October, PPI released a report “Revisiting Super Pell: Empowering Students to Earn the Skills They Need to Succeed.” PPI’s report calls for much bigger reform — establishing a single higher education grant, “Super Pell,” that would be more generous, easier to access, and financed by folding the myriad of existing tax incentives and higher education spending programs into one offering. The proposal not only ensures more Americans can draw down on this aid but would also include high-quality workforce programs. In our proposal programs would not have to meet the 8-week requirement, allowing providers to develop and offer even more flexible programs, as long as they have strong student outcomes.

A Stronger Workforce for America Act

The Stronger Workforce for America Act reauthorizes The Workforce Innovation and Opportunity Act (WIOA), the legislation guiding our public workforce system. The bill covers a lot of ground with highlights including:

Emphasis on Training: The bill would require states to spend no less than 50% of WIOA funds on training rather than administration or other services. The bill also enacts mandatory individual training accounts to support dislocated workers in getting the skills they need to reenter the workforce quickly. These job training grants would be funded by H-1B fee revenue.

Responsiveness to Industry Needs: The bill would establish the Critical Industry Skills Fund as a statewide allowable activity with the governor’s reserve. This fund would allow states to provide partial reimbursements to employers, sector partnerships, and other intermediaries for upskilling workers. Reimbursements would only occur when workers complete their program and are employed — following a pay-for-performance approach. The bill also has a greater focus on incumbent workers, or those who already have jobs, but not good ones — raising the cap for incumbent worker training from 20% to 30% on the proportion of funds that local workforce boards can use to provide upskilling to these individuals.

Data and Outcomes: WIOA’s Eligible Training Provider List (ETPL) has been a challenge for some time with concerns around the inconsistent quality of providers and an archaic approval process to get new providers on the list. This bill would streamline the lists, with a greater focus on regional demands and employment outcomes. Newer programs could also more easily access the list by going through a probationary period, with much greater tracking of their outcomes to prove efficacy. The legislation would also enhance the Workforce Data Quality Initiative — strengthening the workforce data ecosystem by promoting the use of real-time labor market information, facilitating access to wage records data, and improving data transparency via the use of linked, open, and interoperable data formats.

Other Important Changes: Other notable updates include allowing states to use WIOA funds to support employers in implementing skills-based hiring systems and practices; adjusting the out-of-school vs in-school youth funding percentages and codifying the Reentry Employment Opportunities and Strengthening Community Colleges Grant programs.

PPI feels positive about the direction of this reauthorization, supporting efforts to get people into high-quality skill development opportunities, to better align services with employer needs, and to ensure we better understand the efficacy of these programs through strong data initiatives. However, we do have some concerns. With just $3.3 billion in authorized spending, WIOA would remain vastly underfunded – especially given the new and expanded initiatives encouraged throughout the bill. Without higher funding levels, it will make it difficult to meet the new training requirement while maintaining other services and could potentially reduce support for individuals with barriers to employment, especially those who are not covered by the new mandatory job training grants.

Although these two bills have passed out of Committee, there is a long way to the finish line. First, the full House must pass these policies and then they move to the Senate. There is serious concern whether policymakers can sustain this bipartisanship for much longer and few believe these bills will make it to the President’s desk. While PPI hopes this progress continues and negotiations don’t fall apart, we also hope that Congress takes on a more transformative workforce agenda in the future. These bills offer tweaks to existing statutes, but don’t address the comprehensive reform and investments that are needed to support a modern workforce development system. As we wrap up 2023, PPI celebrates this bipartisan momentum, but we ask for Congress to do more to push our workforce forward in 2024.