Can higher ed bill reauthorization close America’s skills gap?

House Democrats last week rolled out a sweeping proposal to transform federal higher education policy. Among the proposals included in the bill is a provision that would make community college free nationwide, an expansion of federal Pell grants, and a new set of policies to hold schools more financially accountable for the outcomes of their graduates.

The Democrats’ approach is one that reflects, and seeks to address, a troubling reality: Perhaps more than ever before in our history, too many Americans feel that the American Dream is out of reach. But as it turns out, today’s policymakers may be only perpetuating that challenge.

Active participation in America’s growing, increasingly tech-centric economy appears to require — at a minimum — four-plus years of college. While that sounds good to those who have successfully completed and benefited from that extended journey, it is often well beyond the capability of many Americans for whom life has a habit of getting in the way of a four- to six-year educational journey — in the form of health, family or personal financial issues (often compounded by the soaring cost of tuition). 

Not only that, but many who do complete college find themselves indebted and out-of-position relative to employer needs for good first jobs. And underemployment in the first job usually means underemployment five and 10 years later.

The monolithic institution of college is, in many ways, perpetuated by public policy. For every federal dollar spent on workforce development, the U.S. government spends $100 at colleges and universities. This spending largely falls under the auspices of the Higher Education Act (HEA). First enacted in 1965, HEA has been reauthorized at least once a decade ever since — until this decade. The last reauthorization was in 2008, making the current 11-year gap the longest on record. Senate Republicans put forth a series of piecemeal proposals last month, and House Democrats offered a rebuttal with the bill released last week. 

In HEA reauthorization debates over the past several decades, the two political parties have demonstrated different perspectives on college. As their new bill demonstrates, Democrats have focused primarily on college access and equity issues, while Republicans have focused on college completion and outcomes. But by limiting their debate to the rules of the current college game — rather than the bigger picture of how best to deploy public resources to help Americans get good first jobs, or better jobs in growing sectors of the economy — both parties are losing a major opportunity to close the nation’s skills gap.

The research is clear: U.S. Department of Labor statistics suggest that 7.3 million jobs remain unfilled, many of them high-paying, high-skill positions. Surveys report that employers are unable to find skilled workers. A majority of these positions are jobs that, if not formally “IT jobs,” require discrete digital skills — which is consistent with reports that we’re seeing near-zero job growth in what’s supposed to be our most dynamic industry. According to the TechServe Alliance, IT employment currently is up just 0.06 percent on a year-over-year basis — a net increase of only 3,000 jobs from July 2018 to July 2019.

What does the HEA have to do with all this? Its overdue reauthorization provides a unique opportunity to reexamine the connection between education and workforce opportunities. 

Lawmakers considering HEA reauthorization should focus on addressing two issues. The first is education friction — the time, cost and uncertainty of a positive employment outcome from education and training. The second is hiring friction, which reflects the growing reluctance of employers to hire candidates who haven’t already proven they can do the job. It’s a natural consequence of employers feeling like employee churn is higher than ever; they feel the same way about the cost of making a mistake (i.e., a bad hire). 

Any solution to closing America’s skills gap must address both education friction and hiring friction at scale. In a new report for the Progressive Policy Institute, I identify a few policy ideas, currently unclaimed by either party, that would achieve these goals:

• Requiring colleges and universities to restructure degree programs to ensure students achieve industry-recognized (stackable) credentials;
• Mandating that colleges and universities provide experiential learning (work experience) as part of degree programs;
• Limiting short-term Pell grants to programs offered in conjunction with a qualified employer or industry group, to make sure that beneficiaries acquire the skills that lead to good, middle-income jobs; and

• Providing a new basis for government aid to education, not for delivering educational programs but for achieving graduate placement into a “good job.”

Make no mistake, college access should remain an important social goal. But this is a question of triage, and failing to open up new avenues to economic opportunity is a life-threatening issue. Once we’ve addressed the issue of providing pathways to better jobs for tens of millions of Americans, we can worry about the rest. 

Ryan Craig is managing director of University Ventures, an investment firm focused on higher education and the workforce. He is the author of “A New U: Faster + Cheaper Alternatives to College.”