Thought Leadership
February 12, 2026
Not finding what you’re looking for?
Just last month, I spoke with a senior leader at a major children’s hospital – a leading employer responsible for a workforce that lives and dies by technical certification – and was surprised to discover that this individual was completely unaware of the major changes new “Workforce Pell” legislation will bring to their industry.
If a sophisticated employer in a field that depends heavily on well-trained, licensed workers for roles like Medical Assistant or Phlebotomist doesn’t know about the implications of this sea-change in federal aid for high-quality, industry-recognized credentials, many others are surely in the same boat.
It’s urgent that employers, education providers, and working learners get up to speed on these changes quickly, because the stakes are high. Workforce Pell could reshape how employers invest in talent, how learners pay for training, and which education and training programs thrive.
The first thing to know is that this is a real, near-term shift, not an abstract future idea. For years, we’ve heard an important-sounding but pretty vague conversation about the need for more short-term credentials focused on workforce needs. This public discourse included talk of the growing number of older working learners and demographic pressures projected to cause enrollment headaches for traditional four-year colleges.
But now the new reality is here. Workforce Pell, passed last year as part of Public Law 119-21 – better known as the One Big Beautiful Bill Act (OBBBA) – will provide federal dollars for short-term, career-oriented programs that meet certain outcome standards; essentially attaching a price tag to performance. The final rules are still being crafted, but they are likely to require that these programs meet two key requirements – a 70% completion rate and a 70% job-placement rate. Programs that can’t meet those thresholds won’t qualify for federal financial aid.
The upshot is that we’ve entered the talent ROI era, where the incentive landscape has shifted from enrollment to employment. Public dollars for education and training programs are now linked to concrete outcomes - finishing the program and getting a job - and not just enrollment. And a lot of money is at stake - Workforce Pell will add between $2 billion and $6 billion to total Pell Grant costs over the next decade, according to different estimates.
These policy changes have big implications for colleges and universities. Many colleges still think of federal aid in terms of grants and loans to students for traditional degrees (especially bachelor’s and master’s programs). Workforce Pell changes the incentive landscape by doing two things that open up big opportunities - but with strings attached. First, it channels a significant pool of funds toward shorter, job‑focused, high‑outcome programs, and second, it creates risk for the survival of programs that can’t meet outcome thresholds.
Institutional leaders must immediately audit their portfolios and determine which certificate programs are actually delivering on the 70/70 expectations. They need to face squarely which programs are at risk and may need to be aggressively realigned or cut. And of course, they should be thinking hard, in consultation with employers, about what opportunities for new programs may be created by the combination of market demand and a new funding source.
Allied health is just one example of many fields where new short-term credentials could be a valuable part of strategy for a higher education institution. Roles including medical assistants and other licensed or certification-based jobs require a range of credentials that map directly to specific jobs and have the potential to be stacked into degrees.
The implications for employers are equally disruptive. Traditionally, many companies have helped pay for employee education and training through tuition assistance benefits, stipends, or reimbursement programs. Under IRS Section 127, working learners can receive up to $5,250 in annual tuition assistance free of federal taxes, and spending on those benefits is tax-deductible for employers. Unfortunately, though, only a small percentage of employees actually use education benefits because the “pay-first, get-reimbursed-later” model is a structural barrier for the very workers who need upskilling the most.
Workforce Pell flips the script. Working learners should be able to use federal grants first, with employer dollars filling the gaps. That should smooth the administration of training programs for workers and employees. What’s more, that new pool of federal funds should allow employers’ training budgets to be surgical rather than foundational. Instead of paying for basic phlebotomy or IT certifications, employers can use their tax-free, $5,250 annual limit to fund advanced specializations or degree-pathway “stacking” that creates true career mobility.
Employers need to be sure they’re in discussions soon with training and education partners about Workforce Pell - if their partners haven’t come to them already. Crucially, they should also verify that they’ve constructed internal career ladders that are aligned with Pell-eligible programs. The most powerful incentive for a worker to gain new skills is the knowledge that their time and effort will be rewarded with economic and career mobility.
A directive for the C-suite and the Dean’s office
Education, training, and business leaders don’t need to be policy experts. But they do need to recognize the new reality - more support for job-focused programs with strong outcomes - and begin taking the steps that will help their organizations support learners as effectively as possible.
For colleges and universities, that means a rapid review of completion and placement outcomes for short-term and workforce-oriented programs. It also underscores the value of strengthening pathways from short-term credentials into degrees, and of offering credit for quality-assured prior learning. Your value proposition is now tied to the labor market’s demand.
Training providers should be prepared to design or re-design programs to meet outcome expectations. They will need to be ready for stricter and more transparent data requirements. And they should look for opportunities to embed their programs with accredited institutions that have the foresight to expand their menu of offerings.
Employers should revisit how their tuition assistance programs are designed: If Workforce Pell can cover the first dollars of training costs, what new possibilities does that open up for the best use of employer-paid benefits? It could make a lot of sense, for example, to pick a few priority roles - maybe in project management, or in a skilled manufacturing position - and map out talent pipelines that can be fed using Pell-eligible programs.
As I learned in my January conversation, even generally well-informed leaders and organizations can be blindsided by policy changes with far-reaching implications. Now is the time to learn what’s coming with Workforce Pell. If you’re an employer, or you work in education and training, and you don’t have at least an initial plan to respond, you should make one. If educators and employers take advantage of this moment to deliver job-aligned outcomes, they’ll benefit, of course. So will large numbers of working learners who face lower costs for building their skills and advancing their careers.
