How Federal Education Policy Contributes to the Skills Gap – and Can Help Us Move Beyond It

In survey after survey over the last decade, employers have complained of difficulty finding workers with the right mix of skills, despite record numbers of job seekers and college graduates. Concerns about pervasive mismatches between worker skills and employer needs have driven a host of initiatives designed to fix the “skills gap”, so far to little avail. While the question of whether we are really facing a skills gap or some other kind of a gap–in wages, jobs, or expectations–is highly contested, there is ample evidence that navigating today’s labor market is more complicated than ever for students and job seekers. Even as employment opportunities pick up, college graduates are struggling to find good jobs and underemployment is at record levels.

Today I released a paper entitled Beyond the Skills Gap: Making Education Work for Students, Employers, and Communities that explores the skills gap from a different perspective – as a gap between the policies governing higher education and the skill development needs of students, employers, and communities. I explain how our higher education system has become our largest provider of job training programs and what that means for students and institutions. I also explain why our current policies for delivering higher education do not work well for matching education and jobs, and explore five policy gaps that are driving the poor results for students and employers. These policy gaps make it too easy for institutions to provide very low-quality career education programs while also making it too difficult for institutions to build the partnerships and programs that will facilitate student transitions to jobs and careers.

In the paper I call for a reframing of the Higher Education Act (HEA) to support all forms of postsecondary learning, including students on non-degree paths and those seeking specific skills and credentials. My recommendations include strengthening the role of programmatic accreditors as gatekeepers to federal financial aid, removing barriers to better data collection on student outcomes, and expanding eligibility for financial aid to a broader range of students and activities, including competency-based education and short-term training. I also propose concrete steps for generating stronger linkages between HEA and the other major federal programs supporting career education – the Workforce Innovation and Opportunity Act and the Carl D. Perkins Career and Technical Education Improvement Act.

From Beyond the Skills Gap: Find out more about the college degree premium and the significance of HEA funding:

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Rebuilding the American middle class will require new models for delivering postsecondary education that recognize the need for more targeted career education opportunities. Job seekers, employers, and whole communities are depending upon educational institutions like never before to help them develop the skills they need to thrive in today’s fast-paced, competitive economy.

Career education programs can build strong linkages between educational institutions and the economy, but our policies do too little to support them at the undergraduate level. We are already paying a high price for our failure to support students in these programs – high debt levels, poor employment outcomes, wasted taxpayer dollars, and employers who still struggle to find workers with the right skills. There is every reason to believe that the demand for postsecondary skills and credentials is only going to increase in the future. The good news is that we know a lot about what makes postsecondary career education work – industry partnerships, structured learning pathways, contextualized instruction, and stackable credentials. Now we need to build the federal, state, and institutional policies to support those practices.

It is time to move the discussion beyond the “skills gap” and focus on the policy gaps. Over the next few weeks, I will be writing more about the rules and regulations in the Higher Education Act that are hindering efforts to strengthen linkages between education and the labor market. I welcome your comments and suggestions.

Click here to read the full report."


Mary Alice McCarthy is the director of the Center on Education and Skills with the Education Policy program at New America. Her work examines the intersection between higher education, workforce development, and job training policies