by Dr. Watson Scott Swail, President & Senior Research Scientist

Last July, Congress passed a budget reconciliation bill that included Workforce Pell, which will provide—for the first time—Pell Grant funding to students who enroll in short-term, workforce-oriented training programs and certifications. These grants will be available to students starting July 1, 2026.

Programs must be between 150 and 599 clock hours and last between 8 and 15 weeks in duration. I point readers to the Jobs for the Future (JFF) blog for additional specifics, as well as information on the negotiated rulemaking committee work that was completed recently.

What Workforce Pell will provide is funding for people interested in sub-baccalaureate programming, such as EMTs, nursing assistants/health care workers, and childcare providers, to name a few occupations.

Allowing federal funds to serve more than just traditional postsecondary education audiences is a breakthrough for access and opportunity across the education sector. Students/workers who have been interested in securing certification for employment and training have been largely shut out of federal funding, often resulting in them not getting the necessary credentials and skills needed to successfully enter the workforce.

The federal government will invest $1.5 billion in Workforce Pell Grants, which is expected to average $2,200 per recipient. These awards will vary based on program length and student need. The Administration is asking Governors to “seize this opportunity” to set goals, leverage data, and raise stands across workforce funding.

As good news as this is for many potential student users, there is a cautionary tale. When the Basic Education Opportunity Grant (BEOG was renamed after Senator Claiborne Pell in 1980) was authorized by Congress in 1972, there was evidence of a rise in the pricing of tuition and fees at colleges and universities. Economists have always been wary of government subsidies that may result in other, unintended adjustments to the market. California is a case study in this affair. Policymakers correctly argued that their state, which had dramatically low tuition and fees at both the two- and four-year levels, would be targeted to a degree unfairly as they already were protecting students through legislative bills on price levels. In fact, there was no charge at California Community Colleges until 1984.[1] Since then, fees (not called tuition in California) have grown nine-fold since then. They saw the BEOG as a bonus to states that were not doing the heavy lifting on access and affordability that they were doing in California. True to expectations, this resulted in an increase, over time, in the price of degree and certificate programs in California. Similarly, other case studies showed similar practices across the country.

The question here is whether Workforce Pell will have the unintended consequence of raising the cost of short-term, workforce-oriented programs for students, such that over time, students may be back in a similar affordability bind? In anticipation of these events, the legislation does have a few safeguards in place, including limiting the cost of these programs to the maximum Workforce Pell amount ($3,980). Time will tell, but it is certainly something that policymakers at the federal and state levels should closely monitor.

On a separate but similar level, funding for the full Pell Grant is in a serious predicament. According to the Congressional Budget Office, the Pell Grant program has a 10-year, $100 billion shortfall.[2] Other fiscal models show shortfalls as high as $157 billion. If Congress fails to act to remedy this issue, students may see decreased Pell Grants in as soon as two years (AY2028-29). What implication does this have for Workforce Pell?

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[1] https://www.cccco.edu/-/media/CCCCO-Website/Files/Finance-and-Facilities/communitycollegesstudentfeesupdatedoct2017ada.pdf.

[2] https://www.crfb.org/blogs/pell-grant-program-faces-serious-and-immediate-shortfall.