By Bill DeBaun, Senior Director of Data and Strategic Initiatives, and Louisa Woodhouse, Senior Policy Associate
Reading time: Five minutes
Congress has been debating whether to pass “short-term Pell Grant” legislation for years. This program would allow students to receive federal funding for occupational training programs lasting as little as eight weeks. Receipt of the Pell Grant is currently
restricted to “those who seek an initial undergraduate degree or credential requiring at least a typical semester of instruction.”
New research from the National Center for Education Evaluation (NCEE) at the federal Institute for of Education Sciences (IES) offers results from two experiments that offered students
the opportunity to receive short-term Pell grants.
The research finds: “In both experiments, offering experimental Pell Grants to eligible students with low income for short occupational programs increased program enrollment and completion” however, “Despite boosting program completion, offering these
experimental Pell Grants did not increase employment or earnings in the medium to long term.”
The experiments took place from November 2012 and March 2017 and were overseen by the Office of Federal Student Aid (FSA). There were two models:
Experiment one allowed students who had already received a bachelor’s degree to use a short-term Pell Grant for further education. Subjects in this experiment were permitted to enroll in programs of up to one year but could take two years to complete
if enrolled part-time.
Experiment two allowed students to use short-term Pell Grants on very short-term programs of duration eight-15 weeks.
More than 2,600 adults across 46 postsecondary institutions participated in the two experiments. Students were randomly assigned to treatment groups in which they were offered short-term Pell Grants for their academic programs and control groups which
were not offered a short-term Pell Grant. Participants were required to meet all other Pell Grant eligibility criteria, had to fill out a Free Application for Federal Student Aid (FAFSA), and needed to be interested in an approved occupational training
program.
Findings from the research included:
Increased likelihood of enrollment and completion: Treatment subjects in experiment one who already had a bachelor’s degree were 26% more likely (78% vs. 52%) to enroll in additional education if they were offered a short-term Pell Grant. These
subjects were also 17% (35.6% control vs. 52.4% treatment) more likely to complete any program at the school in which they were enrolled. For experiment two subjects, the increase to enrollment was about 15% (52% control vs. 66% treatment) and
9% more likely to complete (38% control vs. 47% treatment).
Increased likelihood of enrolling in a program responsive to a high-demand field: The study notes, “The offer of an experimental Pell Grant increased completion of not just any education program at study schools, but of high-demand programs—defined
by the study as those associated with occupations in a new and emerging field, projected to grow rapidly, or having a large number of openings in the student’s state.”
“No effect on employment or earnings in the medium to long term”: The study finds no statistically significant effects on employment and earnings for students who were offered a short-term Pell Grant. In particular, “Students in both experiments
offered a [short-term] Pell Grant were about as likely as students not offered a [short-term] Pell Grant to be employed and had similar average quarterly earnings, measured between 2020 and 2021, or an average of 3.2 years after students were
expected to complete their programs.”
The study finds that results across the two experiments were consistent across different participant characteristics like gender, age, income, and different local employment context.
One complicating factor is that the study examined employment and earnings outcomes from the third quarter of 2020 to the fourth quarter of 2021, a window in which the COVID-19 pandemic had significant impacts on the American economy. The study concedes,
“Overall, it is unclear whether students would have benefited more from occupational training under different economic conditions” but does contend that “It is also important to note that these two federal financial aid experiments were intended to
help people with low income and to improve the economy following the financial crisis of 2009 and its subsequent recession. The months of employment and earnings the study measured are consistent with the experiments’ original intent of providing
access to training during a challenging or uneven labor market.”
Looking ahead, the study’s authors pose three questions that remain for short-term Pell Grants as a matter of public policy:
“Would the findings be similar if the expansions in Pell Grant eligibility were extended to all postsecondary schools nationally, or at least all of those that offer short-term occupational training programs?”
Importantly, experiment participants had already completed a FAFSA and expressed interest in enrolling in a program of study. Given this, the experiment does not tell us how well the availability of short-term Pell Grants would have spurred or
induced demand for such programs in the first place from adults who were not already interested.
“Would the findings be different in a labor market not affected by the COVID-19 pandemic?”
“Would the findings be different if the expansions in Pell Grant eligibility included additional requirements to ensure program quality?”
Support for short-term Pell Grants, and particularly for the Bipartisan Workforce Pell Act introduced last year by a bipartisan coalition, has gained traction in Congress. The bill is a result of negotiations between Representative Virginia Foxx (R-NC,) Chair of the House Committee on Education and the Workforce, and Representative Bobby Scott
(D-VA,) the Committee’s Ranking Member, surrounding the necessary guardrails for short-term Pell programs. The legislation sets key eligibility requirements for workforce Pell programs including measures for quality assurance, accreditation, and alignment with in-demand, high-wage, industries or occupations. The program eligibility guidelines outlined in the bill also set requirements for a value added earnings standard greater than or equal to the tuition and fees charged to short-term Pell Grant recipients.
The Bipartisan Workforce Pell Act has also received notable support from Linda McMahon, President-elect Trump’s recent nominee for US Secretary of Education,
who applauded the bill as an investment in American workers, ensuring that “the benefits of education and training are accessible to all skilled workers, no matter their chosen career.”
Given the broad support for short-term Pell Grants, it is likely that the 119th Congress will take up the Bipartisan Workforce Pell Act, or similar legislation, in the new year. These experiments’ findings offer valuable insight into what policymakers,
practitioners, and the public might reasonably expect as outcomes while also illuminating still-unknown questions that legislation can work to address.
Email to a Friend