Paying for apprenticeships

There is widespread agreement that apprenticeship programs connected to community colleges are a great way for employers to attain qualified workers and for students to earn money while learning job skills and working toward a career and possibly a degree.

But who pays for these programs? A new report from New America evaluates the pros and cons of four models adopted by different states.

One approach calls for students to use financial aid to cover the cost of coursework associated with an apprenticeship. Kentucky carried that one step further by passing legislation expressly permitting the use of the state’s merit-based Educational Excellence Scholarship (KEES) for registered apprentices.

A previous law allows high school students to earn a KEES allowance for each year they attain a GPA of 2.5 or better that they can apply toward an in-state college education. They can also earn bonuses for high scores on college aptitude tests or advanced coursework.

In 2017, the state legislature amended the law to allow registered apprentices to access the same benefits. They can use their allowance at their own discretion for tuition, books, equipment and licensure exams. The program has encouraged some college-bound students to consider an apprenticeship as a feasible college pathway who might not have done so before, the report says.

But it adds that while the use of state financial aid can reduce cost barriers for apprentices, it does not provide any additional support to employers or colleges just getting started with apprenticeships.

Startup grants

Another model – startup grants to develop apprenticeship programs – is exemplified by New Jersey’s PACE and GAINS initiatives. Those programs are part of a $10 million investment to support the New Jersey Apprenticeship Network, with funds available to two- and four-year colleges, school districts, employers and intermediaries.

The $4.5 million GAINS (Growing Apprenticeships in Nontraditional Sectors) initiative supports existing and new programs by providing funds for materials and supplies, tuition, instructor salaries and the wages of qualified mentors, as well as up to half of an apprentice’s wages for up to six months.

The $3 million PACE (Pre-Apprenticeship in Career Education) program, announced in January, provides grants to support pre-apprenticeships.

Grant initiatives that are not supported by recurring state appropriations may produce a flurry of short-lived projects, the report says. But when the money runs out, those programs might not survive, it adds.

Reimbursement systems

The third approach to supporting apprenticeships consists of reimbursement systems that cover recurring costs to colleges and other providers for a portion of instructional costs. Two states that use this approach, Texas and California, base reimbursements on a single contact-hour rate for the amount of time a learner is physically in a class.

A traditional apprenticeship program’s 144 total contact hours of classroom training only add up to about nine credit hours, the report says. And that is not enough for an apprenticeship to included a college degree or even a shorter certificate.

The report notes that existing apprenticeships that include a degree, such as those provided by Aon and Siemens USA, include 54 to 72 credit hours of class time – the equivalent of roughly 900 contact hours – plus study time.

In both the Texas and California reimbursement systems for apprenticeships, colleges receive even less funding than under the base rate for credit coursework. To address that disincentive, both states now allow apprenticeship programs to make use of either contact-hour or credit-hour reimbursement rates.

Tuition waivers

North Carolina has a youth apprentice tuition waiver, which is available to apprentices who begin their program within 120 days of graduating from high school. The state reimburses colleges that provide classroom instruction to these apprentices.

In Washington state, technical and community colleges must waive half of standard tuition and fees charged for apprentices’ coursework. Although most apprenticeship programs articulate into degree pathways, the unfunded partial waiver discourages colleges from partnering with employers to build their coursework and credentials into apprenticeship programs, the report says. It adds that there’s an even bigger disincentive in Florida, where public colleges are prohibited from charging any tuition or fees for students taking courses as part of an apprenticeship.

Best practices

The New America report recommends that any state choosing to support apprenticeship tuition should consider these practices:

  • Dismantle existing disincentives to college participation. Fully fund tuition waivers and adjust funding formulas so colleges are equally compensated for apprentice enrollments and conventional students.
  • Begin with startup grants to specific sectors or apprenticeship types, if necessary. States can tailor their apprenticeship supports to meet their particular economic goals, such as developing talent for high-wage emerging industries or retraining dislocated workers.
  • Demand quality but allow flexibility in funding recipients.
  • Develop and maintain a single guidebook. Prospective sponsors and college partners should have a definitive central resource to help them develop programs.
  • Establish credit equivalency for on-the-job training. States should ensure that employers can use credit-bearing courses for their apprentices’ classroom instruction.
  • Connect supports for apprentice training to existing education and workforce initiatives. Dual enrollment and college promise initiatives, for example, provide an ideal platform for existing support for college-connected youth apprenticeships.

About the Author

Ellie Ashford
is associate editor of Community College Daily.