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Federal Funds For Short, Career Programs Is Bad, And Getting Worse

By Derek Newton
Reposted from Forbes, with permission

Congress is considering a plan that would expand the nation’s premier funding source for lower income students, the Pell Grant, to cover short-term, career-specific training programs.

The proposals are broadly known as short-term Pell, though they are better understood as extremely short -term Pell because Pell funds can already go to programs just 15 weeks long. The new proposals would cut that to cover programs lasting just eight weeks. The ideas under consideration are receiving fanfare as a rare example of bipartisanship, raising hopes that some version of very-short term Pell will pass.

The entire idea is a bad one. Not only should short-term Pell not be expanded, it should never have been.

But, as predictable as the sunrise, Congress has already moved to make a bad idea even worse. And while the new Congressional changes deserve attention for their own illogical self-destructiveness, the bad premises and provisions of very-short-term Pell deserve some quick attention too.

Going back, federal funding for short-term, supposedly career-focused training from for-profit companies really took off as a policy proposal in the heyday of coding bootcamps. These camps, you may recall, were heralded as the job training revolution of the modern age, replacing colleges – or at least adding serious value that it was assumed colleges could not deliver. Bootcamp hype, and results, ran headlong into a very predictable brick wall of education reality and market forces. But the idea that taxpayers should pay for these programs has stuck around longer than the bootcamps did.

With that, the proposed new waterfall of federal funding includes programs designed, marketed, and run by for-profit companies like the bootcamps. And while it’s unfair to paint all for-profit schools and training providers with one brush, let’s just say the sector has earned its very blemished reputation.

To recap quickly, for-profit colleges and career trainers often leave students in debt and with worthless, or nearly worthless, credentials. And that’s for those who graduate, which as a percentage, isn’t many. Very many of these schools have been cited for misleading unsuspecting students into debt traps by promising non-existent jobs. Worst, most, if not all, simply could not survive without government funding.

But, in the end, it probably won’t matter since, for years now, for-profit career training companies have been partnering with and nesting inside public and non-profit schools, white-labeling their programs for a cut of student funds. It’s a smaller version, slower motion replay of the OPM crisis in which for-profit companies cut deals with colleges to run and market their online programs for a share of the revenue. Again, this is not true of all for-profit career training providers. But it is true of too many.

Speaking of online programs, those are also included in the baseline version of the very-short term Pell proposal – fully online, eight-week training programs from investor-backed companies with incentives to maximize scale and cut costs. That cannot possibly end well.

The proposal does include some paper-thin provisions regarding program requirements related to completion rates and employment. But as has been pointed out already, these provisions are self-reported and do not consider whether the graduate is employed in the field for which taxpayers paid for training, or how much they earn. Backers of the bill oppose both ideas.

In other words, if a single mother working a minimum-wage job at a grocery store took an eight-week, online course from a company spending wildly on marketing, and she completed it, but could find no other job other than the one she started with, that would be counted as a success under the existing proposal. That course, meanwhile, would be paid for by taxpayers and add profit to private investors.

Any bill that considers that a success should go back to the drawing board.

And that’s just the basic bad version that Congress has now made even worse.

To “pay for” the federal money that will largely flow from Washington D.C. to Wall Street for substandard and largely unregulated short, online training programs, legislators have approved a provision that would cut off federal student loans and limit other federal student funds at highly wealthy schools – the mostly elite, big-name schools such as Harvard and Stanford.

It’s a real challenge to put into words what a bad idea this is.

If it becomes policy, it will unquestionably hurt the lower income and otherwise disadvantaged students who we want in these schools. Sure, maybe the schools can afford to fill in the gap. But there is no reason they should. Federal aid is meant to support students, not punish schools.

Surprising no one, punishing rich elite schools for doing well is probably the goal anyway. It’s easy to see why, in some circles, that would be popular.

If we’re going to start restricting student aid based on the type of school, in all sincerity, we’re starting at the way wrong end of the spectrum. Let’s not start with the schools that are delivering. Let’s start with those that we know are not – the schools that take the money, leverage mountains of student debt and deliver nothing. I can see why taxpayers and policy makers would want to squeeze that funding hose. But we’re not.

If anything, we should be investing in getting more poor students into those outstanding, well-funded schools, not cutting them off.

The National Association of College and University Business Officers strongly opposes shutting off aid for poor students at elite schools. As do a host of other university organizations. For good reason.

Meanwhile, a report from The Century Foundation, says that cutting off the aid for students at great schools won’t work anyway. They say the policy will likely instead destabilize and increase the costs of the student loan system for everyone else because graduates from the elite schools make the most money and pay off their debt, in essence subsidizing other loans.

A cynic would say that making the student loan program more costly and less stable might, in some quarters, been seen as a goal too.

Even if these “pay for” provisions were fixed, very short Pell has too many fleas to overlook. There are ways – smart ways – to invest in real, valuable and verifiable career-focused job training. Making more Pell dollars available to programs with little oversight and so many predictable problems, is not among them.

Originally posted on Forbes February 28, 2024