Bipartisan Pell Grant Expansion Bill Is a Transformative Win for America’s Workforce

by Kerrie Rushton

Photo caption: Sen. Budd meets with constituents at a facility in North Carolina.

With more than seven million U.S. jobs in need of the right applicant and 62% of Americans without a college degree, there has been a fundamental mismatch in the U.S. hiring market. Millions of Americans, despite not having a college degree, have gained valuable skills elsewhere, either through on-the-job experience, non-college degree programs, or self-education. A new bipartisan bill passed by Congress will help fill the workforce pipeline with skilled employees.

The U.S. Bureau of Labor Statistics (BLS) predicts that between 2020 and 2030, about 60% of new jobs in the economy will be in occupations that don’t typically require an associate’s, bachelor’s, or graduate degree. These occupations include construction workers, equipment mechanics, commercial pilots, and community health workers, as well as more high-tech positions like advanced manufacturing health care tech.

In 2017, researchers from Harvard Business School and Accenture coined the term “degree inflation,” — the practice of preferring or requiring a four-year degree for jobs that, for generations before, had been held by workers without a college education. By 2019, the vast majority of new jobs created, about 69% according to TearThePaperCeiling.org, were in occupations that required a bachelor’s degree or higher for entry.

These employer requirements ignored the fact that nearly two-thirds of Americans over the age of 25 did not have a college degree (with 65% of men and 59% of women lacking bachelor’s degrees). They either never enrolled in college or did not finish their undergraduate education.

Around the COVID-19 pandemic, employers began to open their hiring aperture. Major companies, from Apple and IBM to Costco and Nordstrom, have dropped degree requirements for the majority of their jobs. A report by Harvard Business School and The Burning Glass Institute found that between 2014 and 2023, the number of jobs in which employers dropped degree requirements quadrupled.

Nearly two-thirds of Americans over the age of 25 did not have a college degree (with 65% of men and 59% of women lacking bachelor’s degrees). They either never enrolled in college or did not finish their undergraduate education.

The federal government is now making changes of its own to address the hiring market mismatch. A recent change in eligibility for the federal Pell Grant program will allow Americans to access this aid for some non-college degree programs.

Pell Grants were first awarded in 1973. To be eligible, a student needed to meet several requirements, including financial need. Grantees could apply the funds, which did not have to be paid back, to programs offered by institutions of higher education that met certain criteria of instruction — at least 600 clock hours and 15 weeks. The new criteria expand eligibility to students enrolled in quality short-term education and training programs by lowering that threshold to 150 clock hours and 8 weeks.

The original qualification requirements meant that an individual who wanted to acquire new skills from a community college, short-term skills boot camp, or certificate program had limited access to federal aid.

Former U.S. Senator Mary Landrieu (D-LA) first proposed expanding Pell Grant eligibility in 2014 with a bill to allow funding for students enrolled in short-term (8- to 16-week) job training programs that lead to an industry-based certificate.

While the bill never made it into law, demand to expand Pell Grant eligibility grew and attracted significant bipartisan support. As the education news outlet The74 stated, the issue was an area of common ground between Vice President Kamala Harris and Donald Trump during the 2024 presidential campaign.

In 2023, Senators Ted Budd (R-NC) and Rick Scott (R-FL) introduced the Promoting Employment and Lifelong Learning (PELL) Act to expand Pell Grant eligibility to high-quality, short-term job training programs. The House Committee on Education and the Workforce also advanced the Bipartisan Workforce Pell Act sponsored by Representatives Virginia Foxx (R-NC), Bobby Scott (D-VA), Elise Stefanik (R-NY), and Mark DeSaulnier (D-CA). The vote was overwhelmingly bipartisan, 37-8, but in the ensuing months, negotiations were held up over disagreements about whether to allow aid to for-profit and online programs.

Lawmakers were not deterred.

This spring, Sen. Budd reintroduced his PELL Act, which served as the framework for the workforce Pell Grant expansions that the House included in its 2025 reconciliation bill. This advancement by the House established the momentum for Sen. Budd to continue his work championing the PELL Act in the Senate’s reconciliation legislation. He cited the fact that 85% of companies are experiencing, or expect to experience, a significant skills gap within the next five years and are adapting by looking at skills and not just degrees when hiring. “If companies are rethinking how they evaluate candidates by placing more value on practical skills and adaptability, then our policies should do the same,” Sen. Budd said in support of his PELL Act.

At the same time, Senator Tim Kaine (D-VA), co-chair of the Senate Career and Technical Education (CTE) Caucus, along with Senators Susan Collins (R-ME), Tina Smith (D-MN), and Roger Marshall (R-KS), reintroduced their JOBS Act.

85% of companies are experiencing, or expect to experience, a significant skills gap within the next five years and are adapting by looking at skills and not just degrees when hiring.

Ultimately, Sen. Budd ushered provisions from these bills into the fiscal year 2025 budget reconciliation bill. Elements of the 2023 Bipartisan Workforce Pell Act were also included in the fiscal year 2025 budget reconciliation signed into law in July. The changes allow Americans to leverage Pell Grants for shorter-term programs (eight hours or more) that consist of between 150 and 599 clock hours. To be eligible, these programs also must meet hiring requirements of employers, have a verified completion rate of at least 70%, and generate median value-added earnings that exceed the median total price charged to students.

Educators and employer groups praised the change. “This could be really important for moving folks into careers,” said Layla Merrifield, president of the Wisconsin Technical College System. Zack Perconti of the National Utility Contractors Association called it “a transformative win” that would facilitate “a pathway for more individuals to gain the skills needed to thrive.”

Expanded eligibility is scheduled to begin in July 2026 after the U.S. Department of Education drafts regulations to guide implementation. With the Gen Z “toolbelt generation” seeking careers in the skilled trades instead of the traditional college path at increasing rates, the Pell Grant eligibility expansion will help meet these new demands.

Senator Budd shared with Engage readers why getting this bill across the finish line was so important for American workers, our economy, and future competitiveness: “The strength of our economy rests on the strength of the American worker. In today’s dynamic economy, investing in pathways to family-sustaining careers is essential — not only for families, but for our nation’s long-term competitiveness. My PELL Act delivers on that promise by paving the way for students to earn in-demand, industry-recognized credentials in as little as eight weeks — the true currency of today’s labor market. These credentials are pivotal to building a workforce that has the resilience and skills to adapt, compete, and succeed in a rapidly changing economy.”