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Federal Sources of Workforce Funding

The federal government provides funding to support workforce development activities through many different departments and agencies. Each funding stream has a specific focus and eligibility criteria. Many of these funds are allocated through formula grants to statesmandatory, noncompetitive grants awarded based on specific factors such as the unemployment rate, share of disadvantaged adults or youth, or other factors. States then distribute this funding to local areas. In contrast, discretionary grants are funding awarded competitively for states or local organizations. 

Under the Workforce Innovation and Opportunity Act (WIOA) of 2014, the federal government distributes funding to states for six core programs, including the US Department of Labor Adult Services, Dislocated Workers, Youth Services (for employment and training activities), and Wagner-Peyser programs (employment services for job seekers), as well as the US Department of Education’s Division of Adult Education and Literacy (for basic skills) and its rehabilitation services programs (for employment services for individuals with disabilities). 

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Other federal workforce funding streams include the following: 

  • The Department of Labor funds multiple additional employment and training programs focused on senior citizens (Senior Community Service Employment Program), migrant and seasonal workers, trade adjustment assistance, apprenticeships, Indian and Native Americans, young adults (Job Corps and YouthBuild), veterans, skilled immigrants (H1B TechHire), and others. Funding for these programs totaled over $1.5 billion in 2017. 
  • The Pell grant program provides direct assistance to students based on financial need for postsecondary studies in occupational or academic programs. Students in nondegree certificate programs are included as long as the programs meet certain criteria, including leading to “gainful employment” and being a certain number of hours. This program provided $26.9 billion to students in 2017.
  • Federal funding to support mandatory work requirements for some program beneficiaries is part of the Temporary Assistance for Needy Families (TANF) program and the Supplemental Nutrition Assistance Program (SNAP).
  • The Carl D. Perkins Career and Technical Education Improvement Act provides funding for high school and college career and technical education programs that combine academic studies with occupational training.