Absolute Chaos

An aborted federal funding freeze causes confusion among education and job training providers, while the White House still plans to review spending on apprenticeships, WIOA, and workforce training under CHIPS. Also, Augusta Tech’s bid to become an anchor institution for its region’s industrial revival.

Mixed Signals on Workforce Funding

Education and job training programs aimed at working-class Americans largely have avoided pitched political battles. With bipartisan support and relatively modest federal funding, they rarely fuel soundbites from lawmakers or arguments on social media.

That changed this week with a (now-rescinded) memo from the Office of Management and Budget, which ordered a 90-day pause on trillions of dollars in federal grants and assistance. OMB said the freeze, which was slated to begin on Tuesday evening, was needed so federal agencies could ensure that all activities they fund are consistent with President Trump’s priorities. 

Citing Trump’s many executive orders, the memo said the pause would include, but not be limited to, any “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

The breadth of that language extended far beyond culture war flashpoints. For example, it appeared to apply to nonprofit trade associations that manage registered apprenticeships for manufacturing or energy production, two industries that the same memo said the Trump administration is seeking to “unleash” with federal funding.

Many administrators of workforce education and training programs scrambled Tuesday to determine if they would fall under the freeze. As they worried about making payroll, students frantically called community colleges and other education providers to see if their federal aid would be cut off.

As Republican governors sought clarity on the funding pause, White House officials pointed to a footnote in the memo that exempted direct assistance to individuals, including Pell Grants and student loans. OMB on Tuesday afternoon issued a Q&A clarifying that the freeze would only apply to programs implicated by Trump’s executive orders.

A federal judge temporarily blocked the order, which OMB then rescinded on Wednesday.

Earlier executive orders, including on ending diversity and inclusion activities, are still in place—though another judge late Wednesday indicated he would block those as well. Sources said this week that, barring court intervention, the Trump administration intends to review and possibly freeze funding for some workforce programs. The pause the White House was seeking likely would have extended to money for apprenticeships, the primary federal job training system, and workforce initiatives under the CHIPS and Science Act, including those overseen by the National Science Foundation.

On Wednesday, funding remained frozen for workforce training and experiential learning programs that some organizations administer, despite the injunction. Several programs with grants through the Workforce Innovation and Opportunity Act that were trying to access funds said the federal payment system still contained a notice warning that payments would be delayed, scrutinized, and possibly rejected.

The Trump administration’s broadside surprised many pros across workforce education, including some on the right.

“Manufacturing apprentices and workers are exactly the audience Trump would not want to alienate, so cutting that funding off seems counterintuitive,” one source said.

Red states in particular would feel the pinch from a freeze on more than $1T in state and city federal grants. GOP-led states top the national average of relying on federal funding for 36% of state revenue—it’s more than 50% for Louisiana. Even a brief pause could cause lasting disruptions to popular workforce programs, ones employers have clamored for amid labor force shortages and that large majorities of Republican voters support.

Yet GOP politicians and MAGA commentators largely were unmoved by concerns voiced by constituents or even agencies in their own states.

“This pause in funding will bring transparency to federal spending and is long overdue,” a spokesperson for Texas governor Greg Abbott said Tuesday. “Taxpayer dollars should be used to help taxpayers.”

Bad Business: The OMB order led to a run on the bank, as programs that touch every aspect of Americans’ lives tried to request funds before the 5 p.m. deadline on Tuesday. The payment management system that workforce grantees use was inaccessible for much of the day, and the homepage on Wednesday featured a message saying it will have limited availability until further notice. For those now able to submit payment requests—in many cases for services they have fronted—it’s unclear when they will receive funds.

“This is utter chaos,” says Nick Beadle, a workforce consultant and former career Labor Department official, echoing a commonly heard refrain. “It’s so staggering that I don’t think we can wrap our brains around it.”

Beadle worries that even with the order rescinded, permanent damage has been inflicted on the workforce system. “Folks are shaken,” he says. People who were optimistic that the Trump administration would be supportive of workforce development, based on what the president and vice president said on the campaign trail, are now questioning that assumption, Beadle says.

And he’s heard from training providers who say they may stop working with the federal government. If they follow through, Beadle isn’t sure that enough private or even state funding is there to pick up the slack.

“There are some really effective training providers who are saying, ‘Eff this. We’re getting out of this. We think this is just bad business,’” he says.

An official at IPC, a global association for electronics manufacturers, who spoke before the measure was rescinded, shared a similar concern about how even a temporary funding pause could disrupt partnerships in fields like electronics manufacturing, which are just starting to build apprenticeship programs in large numbers. 

“Freezing midstream could disrupt training pipelines that are already hard to scale,” they say.

On the Ground: Among the more than a dozen colleges, apprenticeship intermediaries, and other providers we spoke to, all were in the dark about how or if their grants—through the federal workforce system or programs like the Good Jobs Challenge, Tech Hubs, or Innovation Engines—would be impacted.

Programs focused on diversifying apprenticeship, like JFF’s National Innovation Hub for Diversity, Equity, Inclusion, and Accessibility, had been ordered to stop work earlier in the week as a result of the president’s executive orders on ending DEI.

Some programs operating under WIOA—including those in a grant program for rural youth with no DEI or green energy focus—also had their funds frozen as of Wednesday morning. Organizations submitting reimbursement requests received a message saying that due to executive orders, “reviews of applicable programs and payments will result in delay and/or rejection of payments.”

Apprenti, a large apprenticeship intermediary with a $23.5M grant through the Good Jobs Challenge, continued operations as usual despite the upheaval. 

“We have not been given any contractually required directive from any agency to cease or temporarily hold government-funded work, though we're obviously keeping a close eye on it,” says Jennifer Carlson, co-founder and executive director of the nonprofit.

She raised the issue, though, of possible delays of significant funding that the Department of Commerce has sitting in its contract queue, in particular for the National Telecommunications and Information Administration.

“Failure to perform on that funding will set companies back from training talent domestically to meet demand in already challenged industries,” she says. 

Carlson hopes that pressing talent needs of employers and broad bipartisan support for apprenticeship will win the day. “The funding in these areas has been approved at all levels,” she says.

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Into the Breach: John Colborn, executive director of Apprenticeships for America, struck a similar note—though he expects federally funded programs focused on diversifying apprenticeships may still have to be redirected. “It’s such a 180-degree shift on the DEI work that people are processing what this means,” he says.

Yet regardless of what the federal government does next, Colborn doesn’t think the focus on diversifying apprenticeships will go away. Federal apprenticeship funding is small, and few intermediaries receive it in the first place. Employers also are facing huge workforce shortages, in part because not enough women and Black and Latino Americans are entering certain high-need fields.

“You can’t run away from the demographics of apprenticeship in the United States,” Colborn says. “We have a talent constraint. I find it hard to believe that the field is ready to walk away from that agenda.”

Local Momentum: The question, though, is whether employers will shoulder the costs of apprenticeship or other targeted training programs over the long haul without reliable federal support. People like Beadle are skeptical that they will. Others, like Jermaine Whirl, president of Augusta Technical College, which is part of a federal Workforce Hub, are confident about the momentum among employers and state leaders. 

“We’re going to have a pretty sustained interest in what we do because of the changing dynamics in the country,” Whirl told reporter Patty Rasmussen recently. “And that’s mostly because the talent needs are so great and outweigh what companies can do.” 

We heard a similar sentiment from folks who have been implementing the federal government’s green energy investments—a big piece of the Inflation Reduction Act, the CHIPS and Science Act, and the Infrastructure Investment and Jobs Act—that are now under fire by the Trump administration. 

Robert Pollin, an economist and co-director of the Political Economy Research Institute at University of Massachusetts at Amherst, predicts that state and local investment, including job training for green energy jobs, will continue. 

“I imagine there’s going to be ongoing and maybe even increasing demand, even though the politics are fraught,” Pollin says. “There’s no reason to cut back on creating opportunities for people other than what we’re hearing ideologically.” 

—By Paul Fain, Elyse Ashburn, and Colleen Connolly

Workforce Hub in Georgia

Federal funds for the Biden administration’s industrial policy face an uncertain future. But Georgia’s Augusta Technical College has pursued a strategy that’s similar to the Commerce Department’s workforce development push under those funding streams.

The two-year college has sought to become an anchor institution as the region tries to rebuild its industrial base, writes Georgia-based reporter Patty Rasmussen. The core of that philosophy is that you can’t have economic development without commensurate investments in education and economic mobility.

Click over to Work Shift to read how Augusta Tech is blowing up norms and saying “yes” to innovation.

Open Tabs

Education Pipeline
Children are struggling to bounce back from the pandemic, with most 4th and 8th graders in 2024 performing significantly below 2019 levels in both reading and math. The Nation’s Report Card from the National Assessment of Educational Progress found that students held steady in math or made up some ground, except for the lowest performers. But reading scores continue to drop across the board, hitting 30-year lows for students who struggle the most.

Apprenticeship Shortages
Many U.S. high school students are shut out of apprenticeships, with roughly 10K 16- to 18-year-olds starting one nationally last year—less than a tenth of a percent of the 13M+ students in that age range—Patrick O’Donnell reports for The 74, citing federal data. Low-level career experiences for high school students, like job fairs, require far less effort from both students and businesses than do full registered apprenticeships or even internships.

Skills Gap
One-third of the skills required for the average U.S. job have changed during the last three years, creating a challenge for workers, companies, and education providers, finds a report from Lightcast. Roles in STEM fields are leading the change, which is being driven primarily by rising demand for skills in generative AI, green technology, and cybersecurity. Lightcast says the findings are complicated by a massive looming labor shortage.

AI Talent Strategy
Artificial intelligence will disrupt the economy and displace some jobs, Brad Smith, vice chair and president of Microsoft, wrote recently. But the company’s confidence has grown that AI will create new opportunities—such as by helping to lower barriers to entry for many professions—that will outweigh many challenges. Smith says the key will be to develop a national AI talent strategy, citing Microsoft’s focus and partnerships with community colleges.

Wraparound Supports
Washington’s philosophy on workforce spending has been to train as many people as possible with as little money as possible, and to require extensive reporting that can cause grantees to swear off federal funding, Nick Beadle, a consultant and former Labor Department official, writes in the debut of his newsletter. A better approach, he says, is to spend 20% of every job training program’s funding on childcare, housing, food, and other supports.

Job Moves
Jeff Maggioncalda will retire next month as president and CEO of Coursera, the online course provider. Greg Hart will be the company’s next president and CEO. He previously was COO of Compass, a real estate brokerage, after a long stint at Amazon.

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