While everyone wants Pell Grants to support quality programs that successfully place students in higher paying jobs, more quality requirements may make workforce development less accessible in four possible ways:
- Fewer programs may qualify—Fewer qualifying is by design. The purpose of the quality provisions is to ensure that low–quality programs aren’t supported by Short-Term Pell.
- Fewer programs may apply—To become eligible for Pell Grants, workforce development program administrators must apply and demonstrate that they meet each quality standard that Congress requires. Many programs are already stretched for resources. The more cumbersome the process, the fewer programs may apply. Even if they do successfully apply, some may find the ongoing work of maintaining eligibility sufficiently burdensome that they forgo their eligibility.
- Programs may accept fewer of the students who need it most—Many of the students who would benefit most from workforce education are also the most difficult to support and successfully place in higher paying jobs. If the quality standards are too high, it may create incentives for programs not to accept these more challenging students.
- May increase tuition and fees—The administrative costs of documenting fulfillment of quality requirements may also be passed along to students in the form of higher tuition and fees.
1. Excluding For-Profits
One means by which the first bill introduced in Congress aims to make certain that Pell eligible programs are high quality is to make all for-profit educational institutions who offer workforce development courses ineligible. That first bill is the Senate’s Jumpstart Our Businesses by Supporting Students (JOBS) Act, versions of which were first introduced several years ago. The two other major Short-Term Pell bills were both introduced in the House. Each House bill would make for-profits eligible for Pell Grants if they, and all other career development programs, meet other quality requirements discussed below. The first House Short-Term Pell bill is called the Promoting Employment and Lifelong Learning (PELL) Act. The second one is the Jobs to Complete Act.
Many believe that Short-Term Pell legislation would have already passed were it not for the question of how to treat for-profit institutions. For-profit four-year programs can be more accessible than traditional four-year public colleges or private non-profit colleges because they often have lower academic requirements for admittance and have more flexible schedules for working students. However, for-profit four-year college programs have had significant quality problems. The for-profit quality concerns are even greater for skills education courses.
Supporters of prohibiting for-profit institutions from Workforce Pell eligibility argue that there are higher quality concerns with these institutions for a good reason. They simply point to the considerable track record of poor for-profit performance. Many have preyed upon their students, particularly lower income and minority students, with well-documented records of low program quality along with low graduation and job placement rates. Many for-profits have also frequently engaged in deceptive practices that mislead students on each of those points.
As noted above, the Urban Institute review of existing studies and data confirmed the poorer performance of for-profits. Another study that proponents of excluding for-profits cite was published in the Journal of Human Resources. It found that certificate seeking students at for-profit institutions are 1.5% less likely to be employed and have 11% lower earnings if they complete the program than students in similar programs at public institutions like community colleges. This study also found that the students enrolled in for-profit colleges earn less pre-enrollment than the median public institution student. Additionally, the median cost of tuition at for-profit institutions was found to be significantly higher compared to public ones. The modest gains in earnings among for-profit certificate students, according to the study, were often not enough to justify the debt they incurred to enroll. While graduation rates at for-profits are higher, for-profit’s opponents say that the impacts on students after graduation confirm that they do not provide the benefits that public certificate-granting institutions do.
Opponents argue that simply excluding all for-profits, including those with better track records, is counter-productive and unfair. They argue that it’s better to protect against poor quality by establishing the quality requirements discussed below that all programs—for-profits and community colleges alike—must meet. Opponents reason that if a for-profit career development program can meet the same quality criteria that a community college can meet, then the interests of both quality and access are served.
Opponents also suggest that the evidence does not consistently confirm that community colleges are superior in all respects to for-profits. For example, they observe that the U.S. Department of Education documents a substantially higher graduation rate for students enrolled in shorter certificate and/or two-year associate degree programs at for-profit institutions (61%) than at community colleges (29%).