Making Financial Aid Work for Working Adults, Businesses, and US Economy
America has one of the best higher education system in the world, especially for full-time students pursuing a traditional four-year college degree. But for working students and adults who need to earn while they learn—to support themselves and their families—U.S. education policies leave much to be desired. One of the structural roadblocks in the way is the policy bias in the federal financial aid system against working students.
Federal financial aid has historically been designed to accommodate the “traditional” student who attends college full time, lives on campus, and enrolls immediately after high school in pursuit of a four-year degree. As a result, most postsecondary students can only qualify for needs-based federal financial aid, such as Pell grants, if they enroll in a program that takes at least 600 hours of instruction to complete. This policy tends to leave out those pursuing shorter-term education or training programs that can lead to good-paying jobs in high-demand industries.
And this policy bias against working learners affects more individuals than we may realize. Today, more than 70 percent of all undergraduates can be classified as non-traditional, with more than half qualifying as financially independent, 43 percent attending school on a part-time basis, and more than a quarter working full- or part-time.
These trends are even more pronounced at community and technical colleges: 62 percent of all community college students—roughly 4.5 million individuals—attend on a part-time basis, and nearly three quarters of them are working either full- or part-time.
These students tend to be older than traditional students. Of the 12.1 million students enrolled in community colleges in 2015-16, for example, about 903,000 were 40 years or older. Many of them are also parents—30 percent of total community college enrollment—who are trying to make ends meet and balance family obligations in addition to school.
So, it should come as no surprise that a traditional full-time, four-year degree program just isn’t a viable option for these working adults. But why should these hardworking individuals be denied an opportunity to receive federal financial aid?
It’s time to end the policy bias against working adults by expanding federal Pell grant eligibility to working students who choose to pursue a short-term credential, license or certificate program that helps them secure a better-paying job or career.
This is something that the overwhelming majority of Americans support. According to a new poll by the National Skills Coalition, 86 percent of voters—including 91 percent of Democrats, 90 percent of Independents and 79 percent of Republicans—support making federal financial aid available to anyone seeking skills training, even if they’re not pursuing a college degree.
Many of these short-term programs already have a proven track record of giving workers the skills they need to succeed.
Research shows some short-term credential holders earn as much as those with two- and four-year degrees. For example, a data study from the state of Colorado found that while graduates with bachelor’s degrees earn more on average over 10 years than those with other credentials, those who complete short-term programs and Associate’s of Applied Science (AAS) degrees earn almost as much. Specifically, the median income in Colorado for individuals with bachelor’s degrees after 10 years is $55,287—while the median incomes of short-term certificate and AAS holders are $53,940 and $54,146, respectively.
Research conducted on the long-term outcomes of community college students in California also shows that over a span of nine to 12 years, short-term certificate holders on average see a 13-percent increase in their earnings, while associate’s degree holders see a 7-percent increase.
Given the fact that these credentials take less time to earn than other degrees, there’s no doubt they’re a viable alternative for many students.
To be clear, this doesn’t mean that all short-term credentials are created equal. But what these studies show is that they do play an important role in meeting the economic needs of nontraditional students, especially working adults.
Short-term credentials also help meet the immediate workforce needs of businesses. Many local employers partner with community colleges, community organizations and workforce agencies to ensure that the education and training in these programs are in alignment with the skills businesses need. This not only improves the quality of the programs; it gives employers confidence that prospective employees have the competencies needed to succeed on the job.
Why is that so important? Because we know from a recent survey conducted by the Society for Human Resource Management that more than two-thirds of organizations hiring full-time staff say they’re struggling to successfully recruit qualified candidates, due to lack of technical skills and a deficiency of relevant credentials and certifications among job applicants.
Community colleges are often the most obvious partners for these companies looking to hire well-trained, well-skilled workers. And they have pointed out that the lack of federal financial aid for non-credit and short-term programs is making it harder for them to attract and retain students and expand certificate programs that could help meet employer demand.
At a time when more than 80 percent of all jobs require education or training beyond high school, policymakers need to rethink how we prepare workers today for jobs of tomorrow and ensure that businesses have a pipeline of well-trained workers to keep America competitive.
Expanding Pell grants to working students in short-term programs may seem like one small step towards achieving that goal, but it is, in fact, a giant leap for ensuring the security, stability, and success of workers, businesses, and our economy.
Author Perspective: Analyst