Congress Should Not Follow Paul Ryan’s Plan and Cut or Eliminate Job Training and Pell Grant Programs

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By Neil Bomberg, Program Director

It is hard to understand, when one looks at the program outcomes for the Pell Grant program and the Workforce Investment Act (WIA), why House Budget Chairman Paul Ryan wants to cut or eliminate their funding.  Both appear to be helping Americans obtain the job skills and education they need for the 21st century workplace.

The U.S. Department of Labor reports that there is great demand for job training and job placement services.  Last year, more than nine million Americans received training and related services through the federally-supported workforce investment system – an increase of nearly 250 percent over the previous two years – and more than half of those individuals found employment in one of the toughest labor markets in history, in large part because of the assistance they received.

According to the U.S. Department of Education, nearly 10 million individuals relied on Pell grants last year, including many who were attending school while continuing to work full-time to support their families.

Critics argue that the outcomes for WIA participants and Pell Grant recipients — slightly more than half of WIA participants find jobs as a result of their participation in the WIA system, and 40 percent of Pell Grant recipients graduate from four year colleges after six years of study – are not sufficient to justify continued funding.  However, I would argue that these numbers are actually impressive when taken in context.

Fewer than 30 percent of all unemployed Americans can expect to find a job in the first month of unemployment, and that number decreases rapidly to less than 20 percent when one is unemployed for more than six months, according to the Brookings Institution.  Equally compelling is the fact that there is only one job opening for every four unemployed individuals, according to the Economic Policy Institute, suggesting that a placement rate greater than 25 percent is exceptional.  Yet WIA’s placement rate exceeds 50 percent.

Though the difference in graduation rates after six years for Pell and non-Pell students who enter four year institutions is significant – 55 v. 40 percent – the difference is explainable.  Pell Grant recipients are among the poorest students, and face significant financial challenges while in school.  Many cannot afford to complete their educations because of these financial challenges.  They are likely to be older than most students, which generally means that they have family and related obligations that non-Pell students do not have, thereby making it more difficult to complete college.  They are more likely to be first generation post-secondary students and come from families with very low academic achievement.  According to Inside Higher Ed more than 40 percent of Pell recipients come from families with a high school diploma or less as compared with non-Pell students where the rate is only 20 percent.  Conversely, 61 percent of non-Pell students come from families with a bachelor’s degrees or higher, as compared with 36 percent for Pell recipients.

Finally, if our goal is to ensure that more people than not have access to a post-secondary education, in large part so that they can compete in the 21st century economy, then Pell Grants are succeeding.  Over the past five years, the number of community college students receiving Pell Grants nearly doubled, according to the American Association of Community Colleges (AACC), and in the past academic year, the number of recipients increased by 21 percent.

From where I sit, these data suggest that the Workforce Investment Act and the Pell Grant program have, in very different ways, made significant impacts on the populations they are designed to serve, and from NLC’s perspective, warrant continued support.