10 Transformational Pathways for States

To achieve each of the Future Workforce Now transformational objectives, states must take action across all ten policy pathways. Interact with the wheel to explore each pathway and the associated policies to prepare your future workforce for technological disruption.

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  • Lifelong Learning Ecosystem
  • Technologically Resilient
  • Comprehensive Support

Evaluate alternative approaches to financing lifelong learning that reduce cost to the individual. As technologies evolve and employers’ skills needs shift, workers will need help to close the affordability gap of additional training. In recent years, many states have introduced new financial aid programs including last-dollar scholarships for eligible students. Although the effects of these programs are not universal, states should gather data on the potential impacts of new financial aid programs to reduce costs for learners, and then use this information to inform new program design to better meet learners’ needs.

State Program Examples

  • Tennessee

    Tennessee Promise Scholarship

    The Tennessee Legislature passed the Tennessee Promise Scholarship Act in 2014. This legislation was in line with former Governor Bill Haslam’s goal of “making Tennessee the number one location in the southeast for high-quality jobs” by increasing postsecondary attainment in Tennessee to 55% by 2025.  The Tennessee Promise offers a scholarship for students to attend South College in an approved program of study, tuition free for two years.  The scholarship is to pay tuition and fees at not covered by other aid. This is a last-dollar scholarship, meaning that it covers the cost of tuition not covered by federal grants and other financial aid for eligible students.

  • Virginia

    New Economy Workforce Program

    The Virginia General Assembly passed HB 66 which established the New Economy Workforce Grant Program. This grant program is the first of its kind and provides a pay-for-performance model for funding noncredit workforce training that leads to a credential in a high demand field.

  • Maine

    Competitive Skills Scholarship Program

    The Competitive Skills Scholarship Program (CSSP) was established in 2007 to grow the productivity and competitiveness of Maine’s workforce in order to support employers’ success in a robust and changing economy through enabling low-income individuals to obtain relevant training credentials. Funded through assessments on employers that contribute to the unemployment trust fund, the CSSP allows eligible students to cover the cost of postsecondary education and training for industry-recognized credentials in high-demand industries as well as other supports like child care, transportation, books and supplies.  Since its inception, CSSP has helped 3,107 low-income (<200% FPL) Mainers attain skills. CSSP paths provide opportunities for individual career choices, employer-driven training, and early college options for high school students. Eligible training is industry recognized and provides opportunity for employment in specific high-wage, in-demand jobs as identified by Maine Department of Labor’s Center for Workforce Research and Information (CWRI).

  • Ohio

    Choose Ohio First Scholarship

    In 2008, the Choose Ohio First scholarship was created to significantly strengthen Ohio’s competitiveness within STEMM disciplines and STEMM education. Choose Ohio First funds bachelor’s degrees that will have the most impact on Ohio’s position in world markets such as aerospace, medicine, computer technology and alternative energy. Choose Ohio First programs are integrated with regional economies through partnerships with industry leaders and meet statewide educational needs. In December 2019, the State of Ohio announced a new Choose Ohio First scholarship that will boost Ohio’s efforts to strengthen the state’s workforce in Computer Science fields such as programming and cybersecurity. This scholarship will support an estimated 1,400 Ohio students from 35 colleges and universities across the state with a total of $20,580,770 in awards over the next five years.

  • Ohio

    Individual Microcredential Assistance Program

    The Individual Microcredential Assistance Program (IMAP) allows Ohioans who are low income, underemployed, or unemployed to participate in a training program and receive a short-term, industry-recognized, technology-focused credential at no cost. The Ohio Development Services Agency allocated up to $2.5M for FY2020 to distribute grants of up to $250,000 to training providers that offer eligible credentialling programs and demonstrate a commitment to providing opportunities for low-income, unemployed and underemployed individuals. Eligible providers include state institutions of higher education, Ohio technical centers, and private businesses or institutions that offer training to allow an individual to earn one or more microcredentials. The approved training providers will be reimbursed up to $3,000 for each technology-focused credential earned through the program. There are 11 IMAP training providers and more than half of the credentials offered can be completed virtually, meaning location is not a barrier. 

  • Vermont

    Adult CTE Scholarship

    In 2020, Vermont Governor Phil Scott and the Vermont Department of Labor recently announced  a new scholarship for all Vermonters who have graduated high school and are eligible for employment in the state. The Adult Career Technical Education (CTE) Scholarship provides up to $1,000 for Vermonters to cover training and other costs associated with participating in a CTE certificate program that will enhance employability and support growth along a career path. A total of $162,000 is available for these scholarships, which are distributed on a first-come-first-served basis. To apply, individuals must complete a career consultation with a Vermont Department of Labor job specialist. 

  • Michigan

    Michigan Reconnect

    In September 2020, following approval from a bipartisan committee of legislators, Governor Whitmer approved the FY2020 state budget which included $30M  in state funding to support a new program called Michigan Reconnect. This program is the largest effort in Michigan’s history to ensure more than 4.1 million Michiganders age 25 or older without a college degree have an opportunity to earn a tuition-free associate degree or skills certificate. Michigan Reconnect pays the cost of tuition for eligible adults who want to pursue an associate degree or skills certificate at their in-district community college. A portion of the funding could also support training at one of more than 70 private training schools. 

Develop a regulatory framework to ensure that new financing tools, such as Income Sharing Agreements (ISAs), do not further predatory student debt collection practices. States and education providers across the country are piloting ISAs as an alternative to fill a percentage, or all of, a student’s gap in education and training financing. Instead of requiring students to take on loans to further their education, ISAs work by charging students a percentage of their monthly income once they graduate only after having successfully obtained employment. A lack of data on the success of ISAs in terms of student employment and wage outcomes should prompt institutions and lawmakers to develop early oversight measures. In partnership with philanthropy, state leaders could consider piloting these types of accounts for certain industries in their states, only with the inclusion and application of rigorous evaluations of the rate of credential attainment and associated wage growth in those industries.

State Program Examples

  • California

    San Diego Workforce Partnership

    In California, the San Diego Workforce Partnership (SDWP), the county’s workforce development board, established an income-sharing agreement (ISA) program in partnership with the University of California San Diego (UCSD) in 2018. Requirements for repayment are successful completion of a certificate and a job that pays at least $40,000 per year. Students contribute no more than 8% of their income to repayment. Ninety percent of first-year applicants were first-generation students who were most in need of tuition assistance that does not constitute an accrual of debt. The minimum wage level and maximum income contribution restrictions in this program could serve as a model for other ISA programs in the future. Since this program is still in its early years, however, it will be important to examine student outcomes after a substantial number of students have completed their education and repayment.

Establish and improve access to individual savings accounts for education and training. Because the education system was designed predominately for younger students pursuing four-year degrees, mid-career workers often struggle to develop new skills at an affordable cost. In order to help individuals finance continuous lifelong learning, multiple states and countries have introduced new mechanisms to help individuals save for educational expenses, such as 529 plans. Other promising practices are modeled after retirement co-investment, whereby employers and employees are incentivized to co-invest in an account for lifelong education and training. In developing similar financial tools, states should consider ways to ensure that funding always stays with the individual, regardless of the person’s current employer or employment status.

State Program Examples

  • Colorado

    CollegeInvest Matching Grant, Scholarship, and FirstStep Program

    Many states offer matching grants to 529 account contributions up to a certain amount for qualifying families. For example, Colorado’s CollegeInvest matches investments for qualifying low-middle income residents with a beneficiary under the age of 13 up to $500 each year for up to 5 years. In addition to the matching grant, CollegeInvest provides a $2,000 scholarship for any full-time student who is a Colorado resident meets certain income requirements and who has had a CollegeInvest account maintained in their name for at least two years. These scholarships are renewable each year for a total of up to four years or a total of $8,000.  Additionally, as of January 1, 2020, a $100 contribution is granted to each child born or adopted in the state of Colorado to be claimed by their guardian within 5 years. Guardians who choose to claim the account then have full access to contribute to the account and are eligible to participate in complimentary financial literacy education. CollegeInvest is a non-profit housed within the Colorado Department of Education and is a self-funded enterprise.  The contribution matching, participant scholarships and FirstStep program through CollegeInvest all help to supplement family’s savings for educational expenses.

  • Utah

    529 Savings Program

    Utah has simplified saving for educational expenses by allowing individuals to opt into sending their state tax refund directly to a 529 account. Allocations are eligible for a 5% tax credit up to $2,000 per single beneficiary and up to $4,000 per joint beneficiary. This contribution can go into an existing account or will prompt the tax filer to create a new account. This option and incentive bring awareness to the 529 savings account as an option and facilitates an easy way to leverage irregular income from an annual tax return to invest for future educational expenses.

Create a 529c Continuous Learning Household Account that combines public, employer and individual funding for continuous, lifelong learning. States looking to offer learners a wider variety of education finance tools may consider adapting existing 529 education accounts to deliver “529(c) continuous learning household accounts”. These accounts could allow individuals, employers, and public programs to jointly invest in providing flexible money for members of a household to pursue training. Potential sources of funds include: public funds (e.g. WIOA, SNAP employment and training support, TANF supports, Unemployment Insurance); employer funds (e.g. WIOA credits, education benefits such as 529 contributions and employer-paid tuition assistance); and individual funds (e.g. zero- or low-interest rate loans, ability-to-benefit funds). Like traditional 529 accounts or Lifelong Learning Accounts (LiLAs), these would not be designed to serve as long-term savings vehicles but rather, designed for limited returns to encourage workers to regularly use their funds continuously throughout their careers. Relevant issues for policymakers to consider with this option include guarding against fraud and ensuring targeted marketing of these programs are toward lower-wage workers.

State Program Examples

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Create a Training Trust Bond. States need bold financing proposals to effectively upskill the current workforce and train their future workers. New spending can be challenging in any political environment, and many states are seeking solutions to leverage federal dollars through programs that reduce the price tag while still increasing overall workforce investment. Employer-sponsored training cannot entirely supplant direct funding in workforce training, and legislators will need to prioritize revenues in the coming decade. States may also be interested to explore alternative financing approaches, including bonds, to help scale successful initiatives in their states. Modeled after infrastructure tax bonds, a Training Trust Bond (TTB) could be used to pay for training up-front, funded by future resulting tax revenue increases. Large infrastructure projects sometimes borrow against future tax revenues from higher property taxes and commercial activity. Training is analogous in that an up-front investment may yield increased public resources via higher income tax intake, lower crime rates, and lower costs for public services. Therefore, state governments could create TTBs to fund up-front training costs and then recoup costs through lower public costs and higher public revenues.

State Program Examples

No examples to share at this time. Please check back later.

Create and encourage the use of individual training accounts.The state helps individuals finance lifelong learning by creating training co-investment strategies between employer and employee. This model ensures that funding stays with the individual, regardless employer or employment status.

State Program Examples

  • Washington

    Lifelong Learning Accounts (LiLAs)

    In 2012, former Governor Gregoire signed into law Senate Bill 6141, establishing Washington as the first state to legislate Lifelong Learning Accounts (LiLAs). LiLAs are a voluntary employer benefit which offer a co-investment vehicle for both employers and workers to fund employee professional development. Unlike employee-run tuition reimbursement programs which are usually dedicated to improving current job-related skills, LiLAs can cover a broader range of career and technical training, including career counseling. In Washington, the State Workforce Board collaborated with over 30 organizations from business, labor, higher education, and community-based organizations to develop the concept and advocate for its support in the Legislature. These leaders chose to design the model with lower-wage workers in mind, since employer-sponsored professional development programs are less often oriented toward low-skill workers. Although the program initially approached large employers to include LiLAs as part of their existing benefits package, the program received most interest from small employers who sought to offer LiLAs as a mechanism for reducing turnover in their workforce. In order to increase the potential for external funding, the program was designed to meet the requirements of the Community Reinvestment Act, which requires private financial institutions to contribute a share of their profits into the community.

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