Study Highlights Concerns About Short-Term Pell - Forbes

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As the debate about short-term Pell proposals continues in federal higher education policy, a new report released this month highlights the concerns of many about the quality of very-short-term job training programs.

The study examines the labor market outcomes of very-short-term programs that would be eligible for short-term Pell across the community college systems of Louisiana, North Carolina, and Virginia. The results show mixed outcomes at best.

In fact, the two main findings say that there are: “1) stark disparities in gender by program type and 2) varied levels of wage gains by employment type.” Oddly, even with those findings, the report concludes that the evidence suggests that the federal government should expand eligibility for the Pell Grant program to these very-short-term programs.

For each of the community college systems, the study categorizes the outcomes as high-wage programs, lower-wage programs but with significant increases, and programs with little wage changes or even decreases. But the data show that high-wage programs are the exception, not the rule. Just 22% of the program areas highlighted in the report show median wages exceeding $30,000 one year after participating.

Approximately half of the programs fail to provide the promise of higher education. Only 47% had annual earnings above $25,000, the threshold the Department of Education uses in the College S orecard based on the median high school graduate ages 25-34. (That threshold is also outdated because it is based on incomes from the year 2014.) Worse, 46% of them report median wages below the federal poverty guidelines for a family of three ($21,960).

Broken out by state, the data show disparate results. Virginia boasts the programs with the highest wages, accounting for 10 of the top 15 with earnings above $35,000. However, at least one program appears to be an education program that requires a bachelor’s degree and the passage of required assessments in order to become a provisionally certified teacher. Programs in North Carolina also vary greatly with participant earnings ranging from just under $11,000 to almost $43,000. But more than half have earnings less than $30,000.

In Louisiana, only one of the program areas shows participants earning more than $20,000, with median annual earnings of a paltry $24,330. The authors interviewed the community college system president there who said these programs help local businesses find well-trained employees, but these outcomes suggest that funding these programs with Pell Grants would just be an increased subsidy to employers paying low wages, once again letting employers off the hook for both providing training and paying their employees a living wage.

An area of serious concern is one the authors were right to cite: stark disparities in gender. Of the 22 programs with annual earnings above $30,000, all but three are in fields dominated by men. And one of those top-paying programs for women was the education program requiring a bachelor’s degree. This problem has been shown in much of the literature on short-term training.

This analysis is incredibly timely and informative for the current policy debate. Recently, lawmakers agreed to a provision for the short-term Pell legislation that would require a 20% increase in the median wage of participants. In addition to the median annual earnings of participants, this examines the earnings gains they receive from the programs, providing a glimpse into the effectiveness of the programs to meet that requirement.

Only 56% of programs would meet that requirement and provide an earnings increase of 20% or more. Ten percent actually showed lower median earnings for participants than before they enrolled. But the study also shows that the standard would be ineffective at ensuring participants end up with the financial security higher education should provide. Even the ones that did show a 20% increase often left participants with subpar wages.

The report’s own category of “lower-wage programs but with significant increases” tells its own story. Of the 33 programs that pass the 20% rule, nearly half (48%) have median wages below the federal poverty guidelines for a family of three. Only a third have graduates earning $30,000 or more. One program had an earnings increase of 139%, but because the prior median earnings of participants was less than $7,000 it still left the median graduate earnings less than $17,000 annually.

To be clear, a significant increase in earnings is a good thing for workers, especially those previously earning poverty-level wages. The government should support Americans in poverty through a number of strategies, such as subsidized employment. But small gains in earnings that still leave people in poverty isn’t the goal of higher education or the Pell Grant program.

Students don’t enroll in higher education to make less than a high school graduate, let alone poverty level wages. And the Pell Grant program was created as part of the War on Poverty to help students from low-income families access a college degree and the financial security and economic opportunity it affords. But these outcomes show that, instead of opening the door to a middle-class life, short-term Pell could perpetuate existing inequality instead of providing upward mobility.

Neither the participants nor taxpayers will see a return on their investment of time and money from many of these programs, especially those that leave people with wages so low that they likely qualify for public assistance programs. Policymakers should protect students from higher education programs that fail to provide that upward mobility, and they should protect taxpayer dollars from funding them.

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Study Highlights Concerns About Short-Term Pell - Forbes

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