JPMorgan's Big-Dollar Bet on Community Colleges

Financial firm rolls out $350 million for career education programs in high-demand fields, following a previous $250 million in similar grants.

March 19, 2019
 
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Jamie Dimon of JPMorgan

JPMorgan Chase and Co. has become one of the nation’s biggest funders of career training programs offered by community colleges.

The global financial services firm on Monday announced $350 million over five years for postsecondary education and training in high-demand fields such as information technology, health care and advanced manufacturing. The money follows a similarly targeted $250 million over the last five years, bringing the company’s investment in career education to $600 million.

The new grant includes $3.2 million for the Aspen Institute College Excellence Program’s expanding efforts to bulk up the pipeline for presidents in the two-year-college sector.

The impetus for the more than half-billion dollars in grants, said Jamie Dimon, JPMorgan’s chairman and CEO, is that too many people are stuck in low-skill jobs with no future while too many businesses cannot find enough skilled workers.

“The new world of work is about skills, not necessarily degrees,” Dimon said in a written statement. “We must remove the stigma of a community college and career education, look for opportunities to upskill or reskill workers, and give those who have been left behind the chance to compete for well-paying careers today and tomorrow.”

The company’s initial $250 million investment sought to build pathways to middle-skills jobs, meaning ones requiring at least a high school credential but not a four-year college degree. The funding went to 721 postsecondary training providers around the world.

The program included $50 million in philanthropic funds for efforts by community colleges to better collaborate with employers to design programs and curricula that are relevant to jobs. Recipients included Columbus State Community College, located in Ohio, and Northern Virginia Community College, both of which use timely data and information about local labor demand to create work-based degree and certificate programs, often working with large local employers.

The new round of funding will build on that work, said Jennie Sparandara, who leads JPMorgan’s work-force initiatives and global philanthropy. “This is our recommitment to the issue of jobs and skills.”

Sparandara said the goal this time is to go beyond program creation by seeking sustainability and scale for postsecondary training programs that are responsive to labor-market demands. And while the initial grants were about pathways to jobs, she said this round is aimed at economic and career mobility.

“We’ve tested a lot of really great models,” she said. “The answer cannot always be pilot programs.”

JPMorgan’s investments in career education in some ways resemble the Obama administration’s $2 billion work-force development fund for the community college sector, which featured a very long acronym. That program sought (with varying degrees of success) to create partnerships between two-year colleges and employers that would last after the grant money ran out.

The company’s total investment would be the equivalent of more than a quarter of that federal program's funding during the Obama administration.

Of JPMorgan’s $350 million in newly announced grants, $200 million will go toward program development while $125 million will support systems for collaboration and communication between employers and community colleges. And in making the announcement, JPMorgan echoed recent acknowledgments from major employers that they bear responsibility for some of the misalignment between college and careers.

For example, Sparandara called for a “much clearer demand signal from the business community.”

The grants will be focused specifically on work-force training and career readiness for people who face serious barriers and “are shut out of the rewards of a growing and changing economy,” JPMorgan said in its announcement. That means targeting funds toward education and training programs that have been proven to help women, people of color and veterans of the U.S. military to land good, in-demand jobs.

Andy Van Kleunen, CEO of the National Skills Coalition, praised JPMorgan for its investment in talent development.

“They are a national leader in supporting policy and practice that will build education-to-employment pathways for workers while also building thriving, local economies,” he said.

Some of JPMorgan’s funding will be for labor-market data that “allow government and business to direct their investments to the education and training programs that most effectively lift people out of low-wage jobs and into good careers in their communities.”

For example, the company is partnering with PolicyLink and the National Fund for Workforce Solutions to back the creation of tailored data profiles in 10 U.S. cities that will seek to identify gaps in education and economic outcomes, with a specific eye toward disadvantaged groups.

Sparandara said this part of the project will focus on finding where the challenges are particularly acute, as well as attempting to bring in a wide range of organizations to tackle those problems.

On the community college leadership front, Aspen created its presidential fellowship program in 2016. JPMorgan has backed that effort and is contributing another $1.1 million to continue its development.

“The demand for leadership development is huge,” said Linda Perlstein, associate director of Aspen’s College Excellence Program. Roughly four in five community college presidents are expected to retire in the next decade, according to the group.

A third cohort of aspiring presidents is participating in the program, which has seen 32 fellows become community college presidents after its first two years. Two-thirds of the fellows are women, while 37 percent are people of color, compared to 29 percent of community college presidents.

The rest of JPMorgan’s $3.2 million grant for Aspen will be for the creation of its New Presidents Institute, which will be designed to help community college presidents in their first few years on the job.

Perlstein said the institute will help presidents promote broad institutional reforms centered on improving student success. She described the goal as being a “fundamental reorientation” of colleges, with a focus not just on getting students to graduation but helping to ensure their success after college as well.

Working closely with employers is part of how community college presidents can help their graduates fare better in the job market, Perlstein said.

“Your responsibility to your students doesn’t end at graduation,” she said, adding, “It’s not enough to meet with employers in your programs once every two years.”

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