Career and technical education and federal policy
What role should the federal government play in helping people acquire the skills necessary to land and keep good jobs? The answer isn’t obvious.
Even those who believe in an activist Uncle Sam will probably struggle to find the right place for him in the world of training. Supporting a massive federal infrastructure program or federally backed community college doesn’t necessarily mean you believe Uncle Sam knows how to transmit construction or manufacturing skills or what community colleges should teach.
For those of us more skeptical of muscular federal interventions (especially when it comes to complicated, swift-changing issues), it’s even tougher. Uncle Sam can be clumsy, subsidizing the wrong things and subsidizing the right things too slowly. He can be strong-armed by powerful interest groups into backing parochial policies and preferences. His efforts can be very expensive and, since they are generated and administered from so far away, painfully obtuse to the needs of particular communities. And, given the last 15 years of his meddling in K-12 schools (via NCLB, Race to the Top, SIG, etc.), there’s a strong keep-the-feds-out-of-education sentiment across the land.
My general operating principle in this area is that we should lean heavily on the wisdom, nimbleness, trustworthiness, and skin-in-the-game-ness of those closest to the problem and opportunity. So our default setting should be listening to and empowering employers, educators, and local bodies. But can Uncle Sam do worthwhile things to create an environment that supports smart local activity? And what should we do about the existing federal activity?
Two important places to look are the Perkins Act and a few provisions of the federal tax code. Perkins is a federal program (c. 1984) that provides support to states and locals for career and technical education, a very hot topic right now. The statute has not been reauthorized for a decade so advocates have been pushing Congress to update the law; obviously, much has changed in the economy and workforce since 2006. The House passed legislation last year, but it failed in the Senate. So a similar bill — “Strengthening Career and Technical Education for the 21st Century Act” — is being taken up by the House education committee.
It takes the same posture as ESSA, the new overarching federal K-12 law, which devolves lots of authority to states and districts. So this bill wouldn’t make the mistake of relying on the federal government to drive CTE activity. Its theory of action, per an unnamed congressional staffer, is that the best way to ensure CTE-participating students acquire the skills needed to succeed in the workforce is to empower state and local leaders. Accordingly, the bill, among other things, would make it easier for state and local leaders to access and use these funds, align activity to the Workforce Innovation and Opportunity Act, and encourage engagement with employers. Like ESSA, it would also tie the hands of the US Department of Education; states won’t have to negotiate performance targets with the secretary, who won’t be able to withhold federal funds from states that fail to meet their goals.
There is, however, a potential danger to this approach. The onerous NCLB came about largely because tens of billions of dollars in federal funds had been sent to states and districts between 1965 and 2000, and there were too few results to show for it. NCLB was designed to hold states and locals accountable, to make sure federal funds generated outcomes. A challenge for any Perkins reauthorization that substantially devolves authority will be ensuring it doesn’t turn into a big pot of money producing negligible results.
A terrific new report by General Assembly and Whiteboard Advisors explains a different way the feds aim to improve job-related education: the tax code. Not only does the report have policy language for wonks, it includes valuable insights from employers knowledgeable about these provisions.
One of the most interesting facts in the report is that federal employer-related tax incentives for employee education make up only 3% of tax incentives targeting education. In other words, for those of us who think employers and employees know best when it comes to training needs, it probably makes sense for us to give them more agency. Similarly, if we incentivize employers to undertake R&D (because it’s good for employers, employees, the economy, society, etc.), we should appreciate the positive spillover effects of investments in human capital.
Currently, three sections of the tax code (117, 127, and 132) allow employers to provide tax-free tuition assistance to employees. For example, 127 allows employers to provide $5,250 annually to each employee to cover educational expenses. Importantly, both sides enjoy tax benefits: The reimbursement is excluded from the employee’s income (for tax purposes), and employers can claim a deduction.
Employees prize such assistance. The number of employees taking advantage of such programs almost doubled between 1993 and 2007; one survey cited in the report found that “when choosing between similar jobs, 60% of potential employees would pick an employer that offered more options for training and professional development versus an employer that offered regular pay raises.” Two studies found that corporations enjoyed more than a dollar’s worth of savings for every dollar spent on educational reimbursement programs. Nevertheless, during the Great Recession, the number of employers offering tuition reimbursement fell substantially.
In short, Perkins reauthorization and these tax provisions demonstrate both the possibilities and perils of federal involvement in training. Uncle Sam can set and act on national priorities and bring big resources to bear. However, how well these initiatives work is largely in the hands of those implementing them. As my colleague Rick Hess reminds us, the feds can make us do things, but they can’t make us do them well.
First published at https://www.aei.org/publication/career-and-technical-education-and-federal-policy/.
