Deregulating Apprenticeship

Imagine if more than 90 percent of college students graduated with no debt and transitioned directly into jobs paying more than $50,000 a year.

These are the actual outcomes of our national system of registered apprenticeship, which has been launching Americans into the middle class since 1937. Apprenticeship is, hands down, the country’s most effective education and employment model. Unfortunately, it is also the smallest one. In contrast to the oft-cited German and Swiss systems, where upwards of half of all young people are prepared for a range of careers through apprenticeship, our system serves just a half million apprentices in any given year and prepares them for a very limited set of careers, primarily in the skilled trades.

Expanding the reach of America’s apprenticeship system is a priority for policy makers on both sides of the aisle in D.C. and in the states. There is broad agreement that scaling apprenticeship will require expanding it into high-growth industries like health care and information technology. Employers in these sectors have long relied on higher education to prepare their workers, and a college degree is required for career advancement in most fields outside of the skilled trades. To grow, apprenticeship will need to connect to higher education so that apprentices can earn college degrees and college students can be apprentices.

The Trump administration has embraced the value of expanding apprenticeship into new industries and better connecting it to higher education. But rather than focus its efforts on growing our small but high-performing system of registered apprenticeship, the administration has opted for building an entirely new system of industry-recognized apprenticeship programs, or IRAPs.

As currently proposed, these new programs will be governed by a distinct set of requirements and quality-assurance processes that, the administration argues, will make it easier for sectors like IT and health care to adopt apprenticeship. In practice, however, the proposed new processes risk opening the door to low-quality programs and introducing considerable risk into a system that has been the closest thing to a guaranteed pathway into the middle class for over 80 years.

The critical difference between the two systems is the process through which programs are formally recognized by the U.S. Department of Labor. Under the current system, sponsors of apprenticeship programs -- employers, unions, community colleges -- have to register with a state or federal apprenticeship agency that, in turn, determines whether their programs meet a set of regulatory requirements on things like program length, balance of on-the-job versus classroom instruction and the apprentices’ wages and working conditions.

Under the administration’s proposal, programs could seek formal recognition from the Labor Department through a new, vaguely defined system of “program accreditation.” To accomplish this, the Labor Department is planning to recognize more than 70 individual IRAP “accreditors” and grant them authority to determine if a program meets a set of “hallmarks” of high-quality apprenticeship that the department spelled out earlier this year. These “hallmarks” bear close resemblance to some of the key regulatory requirements of registered apprenticeship programs, such as the requirement that apprentices be paid, but are much less comprehensive and, thus far, lack any clear enforcement mechanism. At minimum, the existence of two sets of quality standards -- one for registered apprenticeships and one for IRAPs -- is sure to generate confusion for employers and apprentices and fragment any foreseeable oversight process.

In September, the department previewed the application process that aspiring IRAP accreditors would need to complete to be recognized. Applicants, which can include businesses, industry associations and colleges, among other organizations, will be asked to share their process for developing industry skill standards and to describe their business models. They will also be asked to explain how they will address conflicts of interest with the organizations whose programs they accredit.

But the department has not defined what constitutes a conflict of interest, an acceptable business model or the capacity to develop industry standards. For example, can a business or college accredit their own apprenticeship programs? Must accreditors charge a fee for their service and, if so, how much? The department has also not spelled out how -- or if -- it expects IRAP accreditors to monitor whether the programs they accredit fulfill their obligations or how the department plans to hold the accreditors accountable for poor-performing programs.

If this sounds familiar, it should. The proposed quality-assurance process for IRAPs closely resembles our national accreditation system of for-profit career colleges and trade schools. It creates an arm's-length relationship between the quality-assurance process and the government, enables the rise of multiple accreditors with overlapping jurisdictions and competing standards, and provides no clear mechanism for holding accreditors or programs accountable for poor outcomes. Put another way, the administration is copying the system used to ensure quality in the lowest-performing and most fraud-ridden sector of higher education -- a system that has repeatedly failed to protect student and taxpayers -- for its new approach to apprenticeship.

The administration has concluded that the obstacle to scaling apprenticeship is the very thing that has ensured the system’s enviable outcomes: a clear set of requirements around program structure and protections for apprentices and their employers.

To be sure, the registration process and the regulations underlying it could certainly be improved and updated. Registering apprenticeship programs can be daunting for employers or other new apprenticeship players such as colleges and universities who are unfamiliar with the process but looking to create programs in new industries that lack experience with apprenticeship. The data and administrative infrastructure at both the state and federal levels is outdated and needs to be modernized. Registration processes can differ from state to state, and the process of registering a program federally is not as easy as it should be. But nothing about the proposed IRAP system addresses these well-known -- but solvable -- barriers to expanding apprenticeship.

When the administration first announced its plans to build a separate system of “industry-recognized” apprenticeships, the biggest downside seemed to be that it would further fragment the field of apprenticeship, while missing an opportunity to improve and expand the existing system. But that may be changing, as it seems increasingly likely that the IRAP programs will become eligible for federal funding.

The department says it is not seeking to open up federal student aid to IRAPs, but it does plan to change federal regulations so that the programs would be legally equivalent to registered apprenticeship programs in the eyes of the government. That would, in turn, make IRAP participants eligible for GI Bill benefits and possibly other federal and state benefits only afforded to those in registered apprenticeship programs -- once again making veterans prime targets for low-quality education and wasted federal funds.

On Dec. 27, the department announced that it would be fast-tracking the process of standing up the IRAP accreditation system, ahead of the process for formally defining what constitutes an industry-recognized apprenticeship program. The department cited “the existence of a persistent skills gap” as justification for putting the program approval process ahead of the program definition process.

At the same time, the Education Department kicked off 2019 with a sweeping set of proposed reforms to higher education accreditation that, among other things, would broaden access to the federal student aid programs to students in programs offered by “alternative providers.” It is not hard to imagine IRAPs meeting the new eligibility requirements for a variety of federal grant and loan programs offered under Title IV of the Higher Education Act.

And once federal dollars are on the line, the risks -- and scale of potential harm -- increase exponentially.

The proposed system may well generate many excellent “industry-recognized” apprenticeship programs. But as the history of for-profit career-education programs makes abundantly clear, the combination of federal funding, a captured quality assurance system and weak accountability measures almost guarantees the proliferation of low-quality programs and increased risk for students, employers and taxpayers. That’s not what anyone needs from our national apprenticeship system.