Governor Newsom Signs AB 1534, Establishing Strongest Workforce Pell Standards in the Nation

SACRAMENTO-Governor Newsom signed Assembly Bill (AB) 1534 by Assemblymember Jacqui Irwin (D-Thousand Oaks), creating the strongest approval standards and student protections for Workforce Pell programs in the nation to date. AB 1534 will provide additional guardrails for the approval of public and private short-term workforce training programs aligned with California's implementation of new federal Workforce Pell Grants.

"This bill ensures every dollar from the federal government will be spent on quality programs that will provide real results for students and help California build a stronger 21st century economy," said Assemblymember Irwin. "The expansion of the Pell Grant is groundbreaking for states and our workforce development partners. AB 1534 will ensure bad actors won't take advantage of this historic investment in our economy and instead guarantees we all benefit from these new opportunities."

Pell Grants are a form of federal financial aid that help low-income students pay for college by covering costs like tuition, fees, books and supplies. Pell Grants have historically been reserved for undergraduate students that have not yet earned a bachelor's degree. However, last year's federal reconciliation budget bill, HR 1, expanded the type of educational programs that Pell Grants can be used for to include short-term workforce training programs lasting between 8 to 15 weeks.

To be eligible for Workforce Pell Grant funds, short-term programs must offer participants skills-based and stackable credentials in high-demand fields. This allows students to enter the workforce with training that leads to high-paying jobs and empowers mid-career workers to seek new training or upskill to align with the needs of their local economies.

AB 1534 builds on SB 135, recently enacted legislation that sets up California's approval process for short-term programs. Programs likely to qualify will cover healthcare roles such as Emergency Medical Technicians (EMTs), nursing aides and phlebotomist technicians, as well as careers in skilled trades, Information Technology (IT), childcare, and early childhood education.

"Workforce Pell is an opportunity to rethink how California connects education, credentials, and economic mobility. By pairing access to federal aid with important quality and accountability standards, AB 1534 puts California on a path to modernize its higher education and workforce systems, said Su Jin Jez, CEO of California Competes. "We thank Governor Newsom for enacting this bill into law and leading in building a system where short-term credentials can serve as a meaningful steppingstone towards great educational and career opportunities and one that helps make students' investment in higher education count."

While these programs have the potential to provide students with upward mobility and expanded economic opportunity, many programs have mixed results. History shows short-term programs in the workforce development space are particularly marred by schools involved in deceptive marketing which have not always provided the earnings promised to students.

As such, AB 1534 provides accountability safeguards to ensure short-term programs seeking approval to participate in Workforce Pell provide education that will deliver real value for students, their families and California's economy.

Specifically, AB 1534 requires programs clearly disclose to students information about partnerships with unaccredited entities when they're providing a portion of the program's instruction, ensures academic decisions clearly remain the responsibility of the institution, prohibits programs from offering risky Income Share Agreements, prohibits programs from offering loan options with an interest rate above 0%, and reasonably limits program costs to the maximum Pell Grant award.

"This is a win for California students and a model for the nation. The Golden State has long been a national leader in expanding college access and affordability while also prioritizing student protections against low-quality programs - and the passage of AB 1534 continues that tradition," said Manny Rodriguez, Senior Director of Policy & Advocacy for California for The Institute for College Access & Success (TICAS). "With this new law, California will now have a more deliberative process for approving programs so that eligible students can use their Workforce Pell grant with more confidence."

These essential guardrails are important to supplement California's approval process for Workforce Pell to protect students from expensive and predatory programs. By ensuring programs are affordable and transparent, AB 1534 will help California maximize the promise of Workforce Pell.