This post is by Angela Perry, senior advisor, postsecondary and workforce pathways at the Data Quality Campaign, and Alyssa Ratledge, senior research associate, MDRC. MDRC is a nonprofit, nonpartisan organization dedicated to improving the lives of people with low incomes through high-quality research and evidence.
The expansion of Pell Grants to cover short-term workforce training programs in higher education institutions has the potential to make more postsecondary pathways affordable for millions of workers. But to make this goal a reality, data is a key component. To successfully implement Workforce Pell, states and institutions must partner on a range of decisions—from assessing programs’ eligibility for participating in Workforce Pell to determining student outcomes with verified data—presenting an exciting opportunity for states to invest in modernizing, expanding, and improving their state data systems and how they are governed. The potential promise of this policy change is a true payoff for institutions and students alike.
Here are the details:
- The One Big Beautiful Bill Act specified that Workforce Pell will go into effect on July 1, 2026.
- The December and January negotiated rulemaking about how to implement short-term Pell achieved consensus, requiring administrative data be used by both states and participating institutions.
- The rule requires the Secretary of Education to determine if a program has “Value-Added Earnings” (VAE), a metric designed to act as a price cap to protect students from high-cost programs that don’t deliver.
- The draft language establishes strong accountability metrics, requiring that programs demonstrate a 70 percent completion rate and a 70 percent job placement rate, meaning they must prove that seven out of ten students finish the course and seven out of ten find jobs.
These accountability measures are meant to ensure students are well served by their programs and see positive wage and employment outcomes. States will require high-quality data from both education and workforce agencies to successfully implement them. During an initial three-year “grace period,” states will be permitted to use simpler employment metrics to evaluate programs (e.g., whether the grant recipient is employed two quarters after exiting the program). Following that, the requirement will be for states to determine that the Workforce Pell recipient was placed in an occupation that is related to their program or to a comparable high-wage, high-skill or in-demand occupation.
States with robust P–20W statewide longitudinal data systems (SLDSs) are more likely to already have the necessary data connections in place and be ready to hit the ground running to access this new funding stream. For states that don’t, Workforce Pell represents an opportunity to modernize and improve data ecosystems and cross-agency data connections. In these states, leaders will need to establish data governance procedures that bring all relevant agencies (e.g., education, workforce agencies) to the table, which are critical to the long term success of state data systems. Together these leaders can identify what data and analytical capacity already exists, what is needed, and what will have to be shared across agencies will be critical for the long-term success of the program.
A significant amount of data and capacity will be required for the program to be successful and many states will need time to develop a process and the data connections necessary. Some states are already beginning to take these steps, even beginning to put Workforce Pell into effect. In California, legislation was recently introduced to establish state-level policies, processes, and authorities for Workforce Pell implementation.
Unlike with many past federal financial aid policy changes, institutions can’t implement this program on their own. As more states implement their own processes, best practices can be identified and shared.
The draft regulation requires institutions to use administrative data for their calculations and the majority of institutions do not have access to such data. For example, most institutions have no way of knowing exactly how much a student makes three months after they leave or if they are employed in a specific industry. Institutions will need to be able to obtain data from the state agencies, which have administrative data on employment and wages through unemployment insurance (UI) wage records, and then submit that data to the Governor’s office. To enable sharing of critical information like UI wage record data given how critical it is to the success of the Workforce Pell program, the US Departments of Education and Labor should issue guidance clarifying the legality of sharing that data between state agencies. This is just one example of how state and federal agencies will need to create new processes and/or new relationships in order to implement Workforce Pell in a way that is useful to students.
Moving forward, the success of Workforce Pell will require strong collaborations among the Governor’s office, state workforce boards, higher education executive agencies, institutions, and system heads. States will need to commit to pursuing this effort long term; while some programs will be ready to identify as eligible for the July 1, 2026 deadline, others will likely become eligible or decide to participate over time.
By prioritizing data governance, connections, quality, and capacity now, states not only uphold the integrity of the federal investment but also ensure that the Workforce Pell grant program is successful for students and is continuously evaluated and refined, ultimately delivering on its promise to transform lives and strengthen our workforce.
