Debate Simmers over Use of Pell Grants for Short-Term Credentials

Short-term credentials are known for helping individuals get on a path to a career, but should these courses qualify for federal financial aid? That has been the question under debate by policymakers, educators, and others in recent months.

Much of this debate stems from a push to expand Pell Grant eligibility to short-term credential programs as part of the reauthorization of the Higher Education Act (HEA).

JFF supports expanding Pell Grants to cover short-term credentials that put students on paths to good jobs and additional credentials. The challenge is how policy can be crafted to ensure quality, value, and equity in any expansion of Pell funds. At JFF’s July Postsecondary State Network (PSN) Meeting in Fort Lauderdale, we convened postsecondary education leaders to tackle this challenge.

Short-term programs adhere to different standards than traditional postsecondary coursework. These programs don’t have the seat time or program length requirements of traditional courses and focus on the competencies needed for a specific job. As a result, these courses have not been eligible for federal financial aid unless they are woven into a credit program.

Since federal financial aid doesn’t support these short-term programs, there isn’t adequate data to track student outcomes. The data we have suggest that short-term credentials help individuals secure an initial job and salary, but these returns don’t grow in the same way they do for longer-term credentials and degrees. Critics are understandably concerned about credentials that leave people stuck in entry-level jobs without the skills needed for a better position or a higher wage. Such situations could be exacerbated for minority and underrepresented populations.

When Short-Term Credentials Work

However, opinions are shifting. The work landscape in the next decade will require a pace of reskilling like nothing we have seen before. Current postsecondary systems cannot keep pace with changing job requirements and the increasing demand for skilled workers. As a result, more and more postsecondary stakeholders, including employers, community colleges, and state leaders, believe that industry-recognized credentials have significant potential to help jobseekers and workers rapidly develop skills to gain employment and progress in their careers.

At the PSN session titled “Pursuing Quality, Value, Equity and Advancement in Short-Term Credentials,” community college practitioners, state system officials, and policymakers debated the potential, risks, evidence, and outcomes of short-term credentials.

To help answer some of the unknowns, the session highlighted experiences in two states:

• Wisconsin Technical College System (WTCS) : WTCS is finding that students prioritize opportunities that lead to immediate employment, while local businesses can’t find the workers they need fast enough. WTCS is using short-term programs to meet the needs of both groups, allowing students an entry point into work and higher education while providing employers with prepared workers. In Wisconsin, students’ individual earnings have increased after they receive that first short-term credential, and system leaders have found that students are continuing their education after that first job to reskill or upskill.
• Virginia’s FastForward program: Representatives of Virginia’s Community College System (VCCS) spoke about FastForward, a state-funded program that provides scholarships for students to take short-term training courses at local community colleges. FastForward has seen strong student outcomes, including wage gains of 25-50 percent or more for graduates who earn their credential. Additionally, the state’s strong engagement with employers—requiring employer partners to identify skill and credential gaps as well as help to design curricula—has had a significant impact. Because of this collaboration with business, 98 percent of the credentials awarded in Virginia can be applied to the state’s top 12 occupations.

These two stories demonstrated the value of short-term credentials in programs that are focused on outcomes and pathways. They represented a point of consensus that resulted from the discussion—that expanding financial aid to short-term credentials makes sense when there is a focus on outcomes and pathways to longer-term credentials. Participants emphasized the importance of ensuring short-term credentials are stackable, meaning they enable students to build on initial credentials and stack their experiences to earn a higher wage, gain better employment, or continue their education down the road.

But this agreement also revealed differences. While everyone agreed outcomes are important, there was debate in the room about what outcomes matter. In short, what is the value of a credential, and who gets to decide?

One community college president from New York stated, “No longer does more education mean higher wages. I have seen students with high degrees that are in debt and have loans, unable to find good work. They are coming back to my college for a short-term certificate to get a job.”

While a representative from VCCS said, “In Virginia, we’re finding that students are choosing between feeding their family and higher education. We need to develop opportunities where families don’t have to choose.”

But others pointed out the value of degree programs and the ability of longer programs to equip students with skills that will serve them well across occupations and industries. Is the value of a credential best measured in its immediate impact or in its long-term promise? And who gets to decide—a college, policymakers, or students?

The Bill & Melinda Gates Foundation, in partnership with the Institute for Higher Education Policy, recently launched the Commission on the Value of Postsecondary Education, which seeks to answer this question by proposing a definition of value for education after high school and an approach for measuring that value. This is a simple yet urgent goal that needs continued conversation—with higher education leaders, policymakers, and with students themselves.

This is a debate with real world implications. Earlier this year, policymakers on Capitol Hill introduced bipartisan legislation, the Jumpstart Our Businesses by Supporting Students (JOBS) Act, that would expand Pell eligibility to cover high-quality and rigorous short-term job training programs.

As the debate goes on, it is important to learn from the experiences and perspectives of practitioners in the field. High quality, short-term programs, like those happening in Virginia and Wisconsin, are examples of how higher education and workforce systems can combine to better serve students, workers, employers, and regional economies. Capturing the the success of these programs, while clearly defining outcomes and value, are essential elements to any policy change.