Category: Education and Workforce

The Workforce Pell Grant launches July 1, 2026, giving states a formal role in federal student aid for the first time. States will identify and approve eligible short-term training programs (8-14 weeks, 150-599 clock hours) based on federal criteria: programs must prepare students for high-skill, high-wage, or in-demand jobs, confer stackable credentials toward degrees, and meet 70% completion rates, 70% job placement rates within 180 days, and an earnings value threshold where median graduate earnings above 150% of poverty exceed tuition costs three years post-completion. Governors and state workforce boards will review programs, and states may need to define terms like “in-demand” and “high-wage” while building data systems to track non-credit credential outcomes.

The timeline is tight—final federal regulations won’t arrive until spring 2026, leaving states just months to submit approved program lists before the academic year begins. State legislatures should consider strengthening data infrastructure to connect postsecondary and workforce systems, aligning state definitions of eligibility terms with forthcoming federal rules, and examining how Workforce Pell interacts with existing state training programs. Students apply via FAFSA, with awards prorated by program length and counting against the 12-semester lifetime Pell cap. Programs that fail performance benchmarks lose funding until they demonstrate improvement and gain state reapproval.

Read the full article here.

Implications for States

Overview

The One Big Beautiful Bill Act of 2025 codified a major proposed change in how the federal government[BI1]  supports workforce training. For the first time, Congress expanded Pell Grant eligibility to include funding for short-term, career-focused programs designed to meet immediate industry needs. Beginning in July 2026, Pell Grants can support programs as short as eight weeks or 150 clock hours, far shorter than the traditional academic programs Pell has historically funded. This shift creates a new federal financing tool for rapid workforce development. Certain noncredit occupational programs may now qualify for Pell support if they align with state-certified labor market demand and meet new federal requirements for completion, job placement, and earnings outcomes (Brown, 2025; U.S. Department of Education [ED], 2025a).

Supporting (or complementing) short-term and noncredit occupational education combined with state-funded business training grants and incumbent worker upskilling incentives can lead to significant economic returns. States will want to reconsider how to use Workforce Pell (as a new funding mechanism) to support certain industry-driven training programs to emphasize programs with short-term impacts to ensure Federal and state investments complement one another.

What Workforce Pell Changes in the Talent Finance System

Under the Workforce Pell rules developed through the Accountability in Higher Education and Demand-driven Workforce Pell (AHEAD) Committee process, governors or their designees decide which training programs are eligible for Pell support. To qualify, programs must prepare people for jobs that states have identified as in demand, high skill, or well paying. States are required to document how they define these jobs, how employers help validate demand, and how programs are reviewed at least every two years in coordination with broader workforce planning efforts (Brown, 2025; ED, 2025b).

Eligible programs must meet three core requirements:

• Completion and placement: At least 70 percent of participants must complete the program within 150 percent of the expected timeframe, and at least 70 percent must be employed in the second quarter after leaving the program.
• Job alignment: Beginning in the 2028–2029 academic year, participants’ jobs must align with the occupation the program is designed to prepare them for, or with a comparable in-demand occupation.
• Earnings-based cost limit: Program tuition and fees may not exceed the program’s “value-added earnings,” defined as median earnings three years after completion, adjusted for regional cost differences and reduced by 150 percent of the federal poverty guideline. (ED, 2025a).

These requirements move short-term training decisively toward an outcomes-based funding model and raise the bar for programs historically financed through state grants, employer contracts, or student out-of-pocket payments. It also puts much more pressure on education and training providers to develop the data infrastructure to monitor worker/learner outcomes directly tied to the skill training offered.

What the Evidence Says About Returns to Short-Term and Noncredit Training

The evidence follows the design logic of Workforce Pell. Essentially, not all short-term training produces equivalent economic returns and that program selectivity matters. Increased earnings tend to be greater in fields with strong labor demand and wage progression while they are lower in fields that favor short, low-return offerings even when those offerings are responsive to employer needs.

For instance, recent research by Bahr and Columbus (2025) provides one of the most rigorous large-scale analyses of labor market returns to community college noncredit occupational education. Using longitudinal administrative data from Texas, the authors find that participation in noncredit occupational training is associated with statistically significant earnings gains of approximately $2,000 per year within two years of completion, representing about a 3.8 percent increase over pre-training earnings.

However, returns vary substantially by field, training type, and duration. Programs in transportation, engineering technologies, mechanics, and welding show returns two to four times larger than average, while some business, marketing, and information-related fields show returns that are statistically indistinguishable from zero. Returns are stronger for longer training durations and for employer-contracted training than for open-enrollment offerings, and they diminish sharply for repeat training spells (Bahr & Columbus, 2025).

Implications for State-Funded Business Training Grants

Workforce Pell will not eliminate the need for state-funded business training grants, but it will change how states should use them. First, for many entry-level, widely recognized credentials, Pell Grants can now cover training costs that states have traditionally paid for through their incentive programs. When short-term programs show strong earnings outcomes and meet federal requirements, Pell can finance tuition and fees directly. This creates a strong incentive for states to avoid paying twice for the same training. The effect will be most noticeable in high-demand programs such as commercial driver’s licenses, welding, nursing assistant, and child care credentials, where state and federal funding have often overlapped (ED, 2025a; Bahr & Columbus, 2025).

Second, state training incentives are also likely to shift toward employer-specific and incumbent worker upskilling. Research shows that training designed and delivered in partnership with employers often produces stronger earnings gains than open-enrollment programs (Bahr & Columbus, 2025). These employer-driven programs typically focus on company-specific skills, new equipment, or process improvements that are critical for productivity but are not easily packaged as portable credentials. As a result, a clearer division of roles is emerging. Federal Pell dollars are better suited to support standardized, widely recognized credentials that feed broad talent pipelines, while state business training grants are best used to help employers upskill their existing workforce and adopt new technologies.

Third, Workforce Pell also raises the bar for accountability across state training programs. Because federal funding now depends on clear evidence of program completion, job placement, and earnings outcomes, similar expectations are likely to extend to state-funded incentives. Legislators and oversight bodies may increasingly question why state dollars support training programs that cannot demonstrate results comparable to those required for federal assistance.

Risks and Tensions for State Talent Systems

Several policy risks arise where Workforce Pell intersects with state training incentives. One risk is the crowding out of flexible training. If states assume Pell will cover most short-term workforce needs and scale back incumbent worker programs, they may underinvest in the firm-specific training that supports productivity gains and technology adoption. Evidence shows that returns to training vary widely by field and design, and that some high-value, employer-driven programs may not qualify for Pell support even when demand is strong (Bahr & Columbus, 2025).

A second risk involves misalignment around career pathways. While federal rules require Workforce Pell programs to be stackable over time, students who move directly into further education are counted as not employed for job placement purposes. This creates a disincentive for institutions to encourage advancement, which may conflict with state objectives to build a skilled workforce over the long term (Brown, 2025). In certain industries and occupations, longer-term education is valuable but benefits may not be seen within the three-year measurement period.

A third risk relates to interactions with state aid. New restrictions limit Pell eligibility when non-federal grants or scholarships equal or exceed a student’s cost of attendance. As a result, states may need to revisit last-dollar aid programs and employer-paid training models to avoid unintentionally displacing federal funds or adding administrative complexity (U.S. Department of Education [ED], 2025b).

Strategic design choices for states
States can modernize business training grants and incentives to complement Workforce Pell rather than compete with it.

1. Reframe business training grants as “Pell-complement” funding
   Use state dollars for what Pell does not do well: onboarding supports, transportation, childcare, tools, testing fees, paid release time, wage offsets, and employer coordination costs. This preserves a strong role for state incentives while letting Pell cover eligible tuition and fees where appropriate.
2. Create a two-lane talent finance model
   Lane A: Pell-aligned portable credential pipelines in which the state role centers on rapid certification of in-demand occupations, employer validation, and helping institutions meet performance guardrails (Brown, 2025).
   Lane B: Customized incumbent worker upskilling and productivity training in which state incentives focus on technology adoption, process improvement, and firm-specific training that increases competitiveness but may not fit Workforce Pell eligibility.
3. Add performance features to state incentives[BI2]  without copying federal rules
   Workforce Pell requires completion, placement, and earnings-related guardrails (Brown, 2025; U.S. Department of Education, 2025a). State grants can adopt lighter-weight performance signals, such as wage progression, retention, credential attainment, or productivity proxies, while maintaining flexibility for employers.
4. Use the governor certification role to integrate economic development priorities
   Because governors or designees certify eligible programs and must review in-demand lists regularly (Brown, 2025), states can formalize a process that directly incorporates business attraction targets, cluster strategies, and major project pipelines into the “in-demand” determinations. This approach is one of the cleanest ways to align federal training subsidy with state growth strategy.
5. Prepare for data and verification capacity needs
   In its analysis, the National College Attainment Network flags that governors will be responsible for verifying job placement and that occupational matching is hard with typical administrative data (Brown, 2025). If states build stronger wage record matching, credential registries, and employer reporting channels, they make compliance easier while also strengthening the case for complementary state training incentives.

Bottom line for state economic development executives
Workforce Pell should not replace state business training grants. However, it should encourage state to change what those grants support and how states justify their value. The most effective posture is “federal dollars for portable, demand-certified pipelines” and “state dollars for speed, customization, wraparound supports, and productivity-focused upskilling.” That combination minimizes duplication, protects flexibility for employers, and strengthens statewide talent competitiveness under the new federal rules (Brown, 2025).

References

Bahr, P. R., & Columbus, R. (2025). Labor market returns to community college noncredit occupational education. Educational Evaluation and Policy Analysis. https://doi.org/10.3102/01623737251360029

Brown, C. (2025, December 22). Highlights from the AHEAD Committee: Workforce Pell consensus reached. National College Attainment Network. https://www.ncan.org/news/717100/Highlights-from-the-AHEAD-Committee-Workforce-Pell-Consensus-Reached.htm

U.S. Department of Education. (2025a). Workforce Pell: Value-added earnings test. https://www.ed.gov/media/document/2025-ahead-workforce-pell-value-added-earnings-test-112702.pdf

U.S. Department of Education. (2025b). AHEAD negotiated rulemaking: Eligible workforce programs and grant aid from non-federal sources. https://www.ed.gov

| SEDE Network Incentives Roundtable | April 5, 2022 |

Remote worker attraction programs represent an exciting innovation for state and local economic development. Recent studies examined two of the longest-standing remote worker attraction programs: the Vermont New Remote Workers Grant Program and Tulsa Remote. Panelists at a recent roundtable shared their findings on the effectiveness of worker attraction incentives.

• Evaluations of remote worker incentive programs in Vermont and Tulsa found that they have been effective in attracting new people and are generating net economic gains at relatively low costs
• While they differed in style and approach, both studies concluded that remote worker incentives have provided a positive return on investment.
• The evaluations also identified other benefits not captured in the impact models, such as attracting above-average income earners and individuals with age, experience, and education profiles that bolster the workforce.
• The long-term effects are still to be determined, but early signs are promising in both places based on retention and home ownership rates.
• Communities considering remote worker programs should know:
• Incentives are unlikely to be the only reason for an individual’s relocation decision, but they can be an important factor for many and provide an “extra push” to encourage individuals to make the move.
• Incentives are most effective when they are part of holistic economic development strategies. Places that are considering these incentives should embrace what makes their community great – but also understand/address the factors that may make relocation difficult.
• Incentives tend to resonate with people who have some connection to or experience in your community already.
• Relocating remote workers are seeking to make meaningful connections within their new communities. Building community connections is important to helping remote workers put down roots and creating places where people want to be.

Introduction

Economic development leaders and evaluators considered how effective state and local incentives can be in bringing new remote workers to communities during the recent SEDE Network roundtable program, New Findings on Remote Worker Attraction Programs.

The roundtable presented findings from recent evaluations of two of the longest-standing remote worker attraction programs: the Vermont New Remote Workers Grant Program and Tulsa Remote, both launched in 2018. Joan Goldstein, Commissioner for the Vermont Agency of Commerce and Community Development, provided a leadership perspective on the economic development benefits of Vermont’s remote worker attraction programs. Deanna Kimball from PFM Group Consulting then discussed findings on a series of questions the Vermont legislature posed regarding the effectiveness of Vermont’s programs. Kenan Fikri with the Economic Innovation Group reported on takeaways from their study of Tulsa Remote.

This white paper summarizes the major themes from the roundtable presentations. To dive deeper, please see the full slide deck from the roundtable or watch the roundtable video to hear directly from the panelists.

Remote Worker Incentives in Vermont and Tulsa

Vermont’s New Remote Worker Grant Program was created by the state legislature in 2018. The $500,000 allocated for the original program was exhausted in 2020. The program was reconstituted under the 2021 New Relocating Employee Incentives Program, and $130,000 was made available for remote workers becoming full-time residents on or after February 1, 2022.

The current program provides grants up to $7,500 to remote workers who relocate to Vermont. Grants are structured as reimbursements for eligible relocation expenses. The program is administered by the Vermont Agency of Commerce and Community Development (ACCD). Individuals must complete a grant application and survey. Grants are then awarded on a first-come, first-served basis, and funds are disbursed in accordance with a grant agreement. In its first iteration, the program provided grants to 140 qualified recipients, with actual grant amounts ranging from $401-$5,0000 and an average of $3,571.

Tulsa Remote was created, funded and administered by the George Kaiser Family Foundation starting in 2018. The program targets people who work from home and incentivizes them to relocate to Tulsa for at least one year. Tulsa Remote offers a $10,000 grant along with resettlement assistance, co-working space membership, and social activities and networking events. Individuals submit an application and are selected by the Tulsa Remote team based on their willingness to relocate within Tulsa city limits and contribute to the community and economy, plus considerations of their potential economic impact, degree of community engagement, and likelihood to stay. Funds are disbursed in phases for relocation expenses, a monthly stipend, and at the end of the first year. Approximately 1,200 remote workers had moved to Tulsa by the end of 2021, though not all stayed beyond their commitment. Kenan Fikri explained that the state of Oklahoma is now starting to reimburse a large part of the incentive.

Both programs received substantial media attention as early examples of remote worker attraction incentives. Joan Goldstein noted that Vermont found the incentive to be “an unbelievable marketing tool– a way to put Vermont on the map nationally and internationally” for economic development in an unprecedented way.

Study Findings: Are They Effective?

While they differ in style and approach to determining effectiveness, both studies chose to use individual or household income (rather than the number of new jobs) to estimate economic impact. Both concluded that remote worker incentives have provided a positive return on investment.

The Vermont Remote Worker program yielded positive employment, output, and fiscal benefits under a primary scenario and several alternatives that were modeled based on estimates of household income associated with the new remote workers gleaned from surveys of grant recipients. The evaluation estimated the 140 remote workers had aggregate household income of $16.5 million, indicating incomes that exceed the state average. The primary scenario then adjusted the total economic and fiscal impact to reflect the percentage of survey respondents who said the grant was important or very important to their decision (52%). This adjustment, which essentially discounted the maximum potential impact, yielded a total employment impact of 65 jobs (not counting the remote workers themselves) from household spending and annual economic output of $9.5 million. The PFM team found that, “in the aggregate, these are significantly positive programs with substantial return per tax dollar spent,” further noting that “economic and fiscal impacts are ongoing.”

The Tulsa Remote impact analysis also found positive employment and income effects, drawing on data from a survey of grant recipients. The analysis is based on the 394 remote workers present for the whole year in 2021. These workers directly accounted for $51.3 million in income in 2021, with a total impact of 592 full-time equivalent jobs and $62 million in new local earnings. This means that every dollar spent on the incentive produced $13.77 in new labor income in the county. Estimated impacts were not adjusted to reflect the importance of the incentive to relocation decisions. As in Vermont, remote worker incomes exceeded the local average. The median income of the remote workers was $85,000 in 2021, while Tulsa’s median income is approximately $58,000. EIG also concluded that Tulsa would see additional impacts from the remote workers in the years ahead.

The evaluations also identified other economic development benefits not captured in the impact models. In addition to the above-average income findings in both places, Vermont learned that the remote workers were younger than many of the state’s in-migrants, a positive workforce indicator. Tulsa reported that 31% of remote workers are employed in professional services and 14% in the information sector, compared to 17% and 2% locally, and nearly 90% of incentivized remote workers hold a bachelor’s degree, supporting the goals to attract and retain highly educated workers in high-wage fields.

The long-term effects are still to be determined, but early signs are promising in both places.

• In Tulsa 4 in 10 are homeowners, and of those who are not, another 4 in 10 are at least slightly likely to purchase a home w/in a year
• 74% of Vermont remote worker grant survey respondents own their residence
• Tulsa has seen an 87.5% retention rate to date, while 97% of Vermont remote worker grant survey respondents still live in the state

Topics for Communities Considering Remote Worker Programs

1. Communities should acknowledge that incentives are unlikely to be the only reason for an individual’s relocation decision, but they can be an important factor for many.

• 52% of survey respondents in Vermont said the grant was important or very important to their decision.
• Joan Goldstein pointed out that in today’s workers’ market, places are competing on amenities – not just tax breaks or incentives. In Vermont, access to outdoor recreation and nature, the perception of Vermont as a safe place to live and raise a family, and access to community/cultural amenities were the top factors influencing the decision to move to Vermont.
• Across the country, individuals who are relocating (not just relocating remote workers) also say being closer to family and friends and more affordable living are their top reasons for making a move.

2. Incentives are most effective when they are part of holistic economic development strategies. As Deanna Kimball explained, places that are considering these incentives should embrace what makes their community great – but also understand/address the factors that may make relocation difficult.

• Strategies need to address the factors that might impede relocation decisions. Depending on the community, these might include available and affordable housing options, access to quality childcare at a reasonable cost, and high-quality and reliable broadband.
• Outreach and promotion for remote worker incentives should complement tourism and other community marketing efforts.
• Incentives should be approached as a collaborative effort with economic development partners to maintain buy-in and make sure interested neighborhoods and communities are “relocation ready” and in a position to benefit.

3. The incentives tend to resonate with people who have some connection to or experience in your community already. Kenan Fikri noted that going forward differentiation and careful targeting (to your local diaspora, for example) may become the key to success as remote worker incentives become more common.

• In Tulsa, 39% reported having a family connection to the area before moving. 21% are “boomerangs” who previously lived in Tulsa
• In Vermont, 50% of remote worker recipient survey respondents have family in Vermont, and 24% had been a resident previously
• Panelists noted that the incentive can provide that “extra push” to encourage individuals to make the move back.

4. Relocating remote workers are seeking to make meaningful connections within their new communities.

• Tulsa offers programming to remote workers directed at community building that includes networking events and social activities as well as a website for sharing experiences.
• Memberships to local cultural organizations, business and community networking opportunities, and free access to co-working spaces are common approaches to building connections.
• Community connections are important to helping remote workers put down roots and “make the places sticky” so people want to be there.

Conclusion

Remote worker incentive programs represent an exciting innovation for state and local economic development. The remote worker attraction programs considered here have been small but impactful, creating a new set of economic development opportunities for both Vermont and Tulsa. They have been effective in bringing people to new locations and are generating net economic gains. The long-term benefits are yet to be determined, but early indicators around home ownership and retention rates are positive. Remote worker incentives that are integrated with other economic development and marketing strategies, engage partners and stakeholders, and that help remote workers build connections with their new communities are most likely to be successful.

by Smart Incentives | Apr 24, 2022

Remote worker attraction programs represent an exciting innovation for state and local economic development. Recent evaluations of remote worker incentive programs in Vermont and Tulsa found that they have been effective in attracting new people and are generating net economic gains. Panelists at a recent roundtable shared these perspectives on what makes worker attraction incentives effective.

Communities should acknowledge that incentives are unlikely to be the only reason for an individual’s relocation decision, but they can be an important factor for many and provide an “extra push” to encourage individuals to make the move.

Incentives are most effective when they are part of holistic economic development strategies.  Places that are considering these incentives should embrace what makes their community great – but also understand/address the factors that may make relocation difficult. Strategies should address the factors that might impede relocation decisions.

Incentives tend to resonate with people who have some connection to or experience in your community already. In Tulsa, 39% reported having a family connection to the area before moving.  21% are “boomerangs” who previously lived in Tulsa. In Vermont, 50% of remote worker recipient survey respondents have family in Vermont, and 24% had been a resident previously.

Relocating remote workers are seeking to make meaningful connections within their new communities. Memberships to local cultural organizations, business and community networking opportunities, and free access to co-working spaces are common approaches to building connections. Building community connections is important to helping remote workers put down roots and creating places where people want to be.

This article is drawn from New Findings on Remote Worker Attraction Programs. This white paper summarizes the major themes from the April 5, 2022, roundtable of the same name, sponsored by the State Economic Development Executives network and hosted by the Center for Regional Economic Competitiveness. The roundtable panel discussed findings from recent evaluations of two of the longest-standing remote worker attraction programs: the Vermont New Remote Workers Grant Program and Tulsa Remote.