Giving Compass' Take:

• Two states show successful models for funding career and technical education that opens opportunities for young people who need to fill skill gaps in the workforce. 

• How will the credential program keep evolving? What are the main challenges of career and technical education? 

• Read about why employer involvement in career and technical education is essential. 

In the midst of record low unemployment, many states are nonetheless struggling with ongoing skills gaps -- shortages of workers with the right skills for in-demand jobs.

At the start of 2019, according to the Department of Labor, as many as 7.3 million jobs remained unfilled. These included a substantial number of “middle-skill” jobs requiring some schooling beyond high school but not a four-year degree. They were in fields such as health care, IT, welding and truck driving. The American Trucking Associations, for instance, reported a shortage of 50,000 drivers in 2017.

One reason these gaps exist is underinvestment in career and technical education. Of the more than $139 billion in annual federal student aid spending for higher education, just $19 billion goes to career and tech ed. Students generally can’t use federal Pell Grants to fund short-term, non-college-credit training programs, such as for welding certifications and commercial drivers’ licenses. Federal dollars under programs such as the Workforce Innovation and Opportunity Act are typically limited to the lowest-income workers.

Two states, however, have programs that show how valuable occupational credentials can be. Already, these initiatives are generating big returns by raising workers’ wages, closing skills gaps and driving economic development -- and at a price much cheaper than “free college,” another higher-ed funding idea that’s gained popularity in recent years.

In Virginia, the state’s New Economy Workforce Credential Grant Program covers two-thirds of the cost of a credentialing program, up to $3,000 per student. In Iowa, the Gap Tuition Assistance Program pays tuition, books and fees for lower-income students pursuing credentials from approved programs. In 2018, about 2,400 students applied, and 1,000 were accepted. The program boasts an 89 percent completion rate.

Funding credential attainment has been a smart investment in these states -- for workers, for businesses and for the public purse. “These are great programs for moving somebody who could be a public burden or isn’t really on track for a good career into getting the skills they need in a high-demand area,” says Jeremy Varner, administrator of the Division of Community Colleges and Workforce Preparation for the Iowa Board of Education.

Read the full article about investments in career and technical education by Anne Kim at Governing Magazine.