Converting H-1B Training Grant Funds to Pay for Short-Term Training Vouchers Is a Terrible Idea

When Congress created the H-1B Visa program in 1990 it was to help employers in leading edge industries fill specialized positions for which they could not find American workers. In addition to creating the visas, the law required the Department of Labor (DOL) to repurpose the visa fees paid by employers into “H-1B skills training grants” that help prepare American workers for those high-skilled, high-wage jobs.

A recent legislative proposal advanced by the House Education and Workforce Committee, “A Stronger Workforce for America Act,” would prevent DOL from using H-1B visa funds to support targeted workforce development strategies and require they be used instead to pay for short-term, individual training vouchers for “in-demand” jobs. That is, not high-skill jobs, not H-1B jobs, but jobs with high turnover rates and lots of openings, such as truck-driving, welding, phlebotomy, and personal care.

As the legislative action moves over to the Senate, policymakers need to pull out these proposed changes to the H-1B Skills Training Grants. Funds from the H-1B program have provided invaluable resources to support innovation in workforce development, most recently in relation to apprenticeships. Allowing visa funds to be used to train American workers for low-wage, low-quality jobs is both a perversion of the original purpose of the H-1B program and a disservice to job seekers and taxpayers.

“A Stronger Workforce for America Act,” which reauthorizes the Workforce Innovation and Opportunity Act (WIOA), puts a lot of faith in the value of individual short-term training programs. The bill would require workforce development boards to commit fully half of their Title I formula funds—significantly more than they do under the current law —to pay for vouchers of up to $5,000 that go directly to a training provider to cover tuition. But the Bill’s drafters did not appropriate any additional funding to pay for the proposed increase in training vouchers, choosing instead to redirect the H-1B visa funds to that end.

Short-term training has a very bad record for improving the long-term economic well-being of workers, and vouchers paid directly to training providers have an even worse record. Despite the well-documented shortcomings of short-term training, the bill raids the coffers of the H1B visa program of funds intended to prepare Americans for high-wage jobs.

The federal government collects around $250 million each year in H-1B visa fees from employers. DOL periodically dips into the fund to support the workforce development needs of critical, high-skill industries or to help states adopt evidence-based workforce development approaches. For example, beginning in 2015, both the Obama and Trump administrations used H-1B visa funds to support the expansion of apprenticeship into new industries. Obama’s Labor Department issued over $200 million in grants to states and workforce intermediaries to expand registered apprenticeship. The Trump administration followed up with two more rounds of funding, committing $284 million of H-1B visa funds that went to community colleges, industry associations, and state governments. The Biden administration has continued to support efforts to expand registered apprenticeship.

Apprenticeship has generated sustained bipartisan support because of its well-documented positive outcomes for both job seekers and employers. It is simply the best-performing training and employment model in operation today. But it is a complicated training and employment model that has significant startup costs. The reason it has expanded over the last decade is due in no small part to the targeted investments by three consecutive White Houses designed to build the capacity of employers, training providers, and our workforce development system to develop apprenticeship programs. And a large share of those investments have come from the H-1B skills training grants funded by the visa fees.

But there is much more work to be done. There are currently two pieces of draft legislation that would broaden our apprenticeship system. And on January 17 of this year, the DOL kicked off an ambitious rulemaking process designed to facilitate the expansion of registered apprenticeship into new industries. The proposed rule includes a new model—the career and technical education apprenticeship—that has the potential to significantly expand access to apprenticeship for high school and college students.

Implementing these new rules and any legislation will require capacity-building grants for a wide variety of stakeholders if they are to achieve their full promise. Without the H-1B visa program funds, it's hard to imagine where those resources will come from.

We can afford to spend more on our public workforce system and strengthen its capacity to help unemployed workers without raiding one of the few pots of money available to support innovation in our workforce development system, particularly apprenticeship. As the Senate takes up the WIOA reauthorization process, it should leave the H-1B visa program alone.