Strong Emphasis on Proven Education and Training Strategies in President Obama’s FY 2016 Budget

On February 2, 2015, President Obama released his Fiscal Year 2016 Budget proposal—a bold road map for crucial investments in evidence-based education, training, and support strategies that help low-income people gain skills to compete and advance in the labor market. The president’s budget proposes targeted investments that will benefit individuals with barriers to economic success.

High-Growth Sector Training and Credentialing: The budget includes a major new investment in training to help low-income people with lower skill levels earn the industry-recognized, portable, stackable credentials they need to advance economically. The proposed “High-Growth Sector Training and Credentialing” initiative would provide $16 billion over ten years to develop career pathways, provide training to an additional 200,000 people per year—doubling the current number of people trained through the workforce development system, which is funded by the Workforce Innovation and Opportunity Act (WIOA)—and support regional partnerships to expand industry-validated credentials.

Workforce Opportunity and Innovation Act: To implement the updated job training policies that Congress enacted on a nearly unanimous bipartisan vote last year for WIOA, the president’s FY 2016 budget proposes $3.4 billion for the WIOA Adult, Dislocated Workers, and Youth programs—a $262 million increase over last year’s enacted levels. Important new provisions in WIOA encourage states and regions to help low-income individuals with the greatest barriers to economic success by building career pathways to advancement in growing industry sectors, as well as partnering with employers for on-the-job training, transitional jobs, and other programs that enable workers to earn while they learn. The budget also proposes lifting the ban on creating a database for WIOA performance results, allowing the Departments of Labor and Education to more accurately capture outcome data; this would simplify program evaluations while reducing the burden on states.

Pell Grants: The budget would fully fund the Pell Grant program, increasing the maximum Pell Grant to $5,915 for the 2015-16 school year. It would also make permanent the index to inflation for Pell Grants that is currently due to expire in 2017.  Additionally, the president’s budget simplifies the Free Application for Federal Student Aid (FAFSA) by eliminating more than 25 questions related to savings, investments, net worth, and additional untaxed income. However, the Administration has also proposed to increase the current academic progress requirement of a 2.0 grade point average by an unspecified amount, hoping to speed up students’ degree completion. We are concerned that this provision would significantly limit access to Pell grants among the 30 percent of students who have less than a 2.5 GPA, as there is no evidence to suggest this policy would help students complete their degrees any faster.

Ability to Benefit: The budget restores full Pell Grant funding (up to a maximum of $5,730 in 2014-15) to those students without a high school diploma who exhibit the ability-to-benefit from federal financial aid for postsecondary education programs that are connected to eligible career pathways. Previously, these students were only entitled to the discretionary portion of the Pell Grant (a maximum of $4,860).

First in the World: The budget envisions additional investment in effective strategies and practices in education, proposing $200 million for the third year of the First in the World (FITW) program—an increase of $140 million over last year. The increased competitive funding would provide larger grants to support institutions as they implement and evaluate promising and evidence-based strategies to improve postsecondary education outcomes, particularly for adult learners, working students, part-time students, low-income students, students of color, and first-generation students.

Higher Education Tax Credits: Building on the success of the 2009 American Opportunity Tax Credit (AOTC), the president’s proposal seeks to expand, simplify, and better target education tax credits for millions of students and families. This proposal would provide $2,500 over five years for students working toward a degree, cut taxes for 8.5 million students and their families, and simplify taxes for more than 25 million families that claim benefits. These reforms would make it easier for students and families to apply for education tax credits.

America’s College Promise: The president’s budget includes $60.3 billion over 10 years for the America’s College Promise program, which will provide access to free community college for students who attend at least half time, maintain a 2.5 GPA, and have annual adjusted gross incomes below $200,000. CLASP recently explained why the president’s proposal is a significant improvement over existing state and local “free” community college programs that do little to help low-income and nontraditional students who juggle work, family, and school and face high barriers to college completion. 

American Technical Training Fund: A new $200 million American Technical Training Fund proposed for Career and Technical Education would expand innovative, evidence-based training programs that have strong ties to employers, include opportunities to work and learn, provide accelerated training, and are scheduled to accommodate part-time work to help low-income individuals gain the skills they need for employment in growing fields. These grants would build on the soon-to-end Trade Adjustment Assistance Community College Career Training (TAACCCT) program and would be administered jointly by the Departments of Education and Labor.

Work-based Learning: Investing in the proven strategy of subsidized jobs to assist disadvantaged adults in gaining work experience and succeeding in the workforce, the budget provides $85 million to continue the Health Professions Opportunity Grants program, which helps lower-skilled, low-income individuals follow career pathways that lead to good jobs in the health care industry, including through subsidized employment. The budget also reallocates $573 million for state “Pathways to Jobs” partnerships with employers to provide subsidized job opportunities for low-income individuals. In addition, it includes several other targeted education and training proposals to help low-income individuals secure employment, including $2 billion for expanded apprenticeship programs, $3 billion for the Connecting for Opportunity initiative to support disconnected youth, and $100 million for the Jobs Plus program to help residents of public housing.

College Opportunity and Graduation Bonus: The president’s budget includes $7 billion over 10 years to reward colleges that successfully enroll and graduate a significant number of low- and moderate-income students. Under this new program, eligible institutions would receive an annual grant equal to their number of on-time graduates who receive Pell grants, multiplied by a tiered bonus amount per student that would vary by institution. Institutions would be further encouraged to improve their performance and graduation rates through larger bonus amounts for additional Pell-eligible graduates.

Campus-based Programs: The president’s budget proposes to reform the campus-based funding formulas (federal work-study, supplemental education opportunity grants, Perkins loans) to target institutions that enroll and graduate higher numbers of Pell-eligible students and provide cost-effective and quality education/training opportunities for students to obtain employment upon graduation. CLASP has advocated for needed reforms in the campus-based funding formula, as noted in our recent paper about the Federal Work-Study program.

Adult Education: State grants for adult education and family literacy are level funded at $569 million, with $71.4 million set aside for English Language and Civics programs. The budget increases the National Leadership Activities fund by $6 million to support states in their efforts to improve adult education standards and assessments, as well as collect data to meet WIOA’s requirements.

Counseling and Unemployment Insurance: The budget also provides $1.2 billion—a $500 million increase—for career counseling to help unemployed workers find a good job or access training to upgrade their skills to qualify for better jobs. Further, it includes an Unemployment Insurance (UI) modernization proposal that would reward states for connecting their UI programs to effective job training and for making more low-wage workers eligible for benefits, and proposes reforms to make the federal extended UI benefits program more responsive to increasing state unemployment levels in future recessions.

The FY 2016 federal budget reflects the Administration’s strong commitment to advancing education and training programs that help low-income individuals achieve economic mobility. As Congress prepares its budget for the upcoming fiscal year, it should include these priorities to make postsecondary education accessible and affordable and improve the skills and career success of America’s workforce.