Could President Trump’s Proposed Budget Cuts Affect Your Trade School?

In late May, President Trump released his first full budget proposal, titled “A New Foundation for American Greatness.” The plan includes significant cuts to government agencies to free up funds for increased defense spending. Trump’s 2018 budget calls for a 21% decrease in Labor Department funding, including a $1.3 billion cut to programs associated with the Workforce Innovation and Opportunity Act (WIOA).

WIOA, which was signed into law in July 2014, funds grants that help job seekers get the training, education, and support they need to secure employment. Thus, cuts to WIOA funding mean cuts to critical job-training programs—like those offered by trade schools. Without WIOA funding for vocational training, many trade schools could experience a drop in enrollment. In turn, industries that rely on the skilled labor force could experience a shortage of properly trained workers.

The good news? The President’s proposed budget isn’t set in stone. According to Senate Budget Committee Chairman Sen. Mike Enzi (R-Wyo.), “The President’s budget is a suggestion. We will take a close look at his budget, but Congress is mandated by the Constitution with key spending responsibilities and will ultimately decide what the nation’s fiscal priorities will be.” This means the WIOA could still be fully funded in 2018.

The bad news? The proposed budget cuts indicate that the current administration doesn’t fully understand the benefits of vocational training and apprenticeships. To turn this around and influence the President’s workforce development approach, trade schools need to step up and spread awareness of the viable career paths that exist beyond a traditional four-year college education.

The Key to Boosting Enrollment at Your Trade School

Over the last five years, post-secondary enrollments have been on the decline. Many believe this steady drop in college attendance numbers is largely linked to lack of affordability. And they aren’t wrong. Young adults are increasingly leaving four-year institutions with mounds of debt and no job prospects.

The good news is that there is another option: trade school. Trade schools are significantly cheaper than traditional colleges, the programs they offer can typically be completed far faster, and the job outlook after graduation is usually pretty bright. Even so, these schools are not without affordability issues.

Many people considering trade school are looking to break into an in-demand field—such as manufacturing, healthcare, or engineering. They believe learning a trade and swiftly entering the workforce is a better path than attending a traditional college. But here’s the thing: these willing trade school applicants often need financial aid to afford the necessary skills training. One study found that low-income students are 3.5 times more likely to attend for-profit institutions like trade schools than higher-income students

If you work in the trade school industry, you should know that offering school financing options is the key to increasing enrollments. Sure, you can up your marketing game to garner more interest in your school, but it won’t do much good if those who are interested can’t afford to attend. Providing custom financing that brings in students who otherwise couldn’t afford the tuition is the best way to increase the number of eligible applicants and, subsequently, enrollments.

Trade schools are likely to continue growing in popularity among those looking to streamline their education and career advancement (and cut down on educational debt). And the schools that best give under-served students a way to pay for school will see the most success.

Credit Invisible? Paramount Can Help

According to a report from the Consumer Financial Protection Bureau, close to 26 million Americans, or one in ten adults, are “credit invisible,” meaning that they do not have any credit history with a nationwide consumer reporting agency. Moreover, 19 million Americans have unscored credit records, meaning that only 8% of the adult population has credit records that are considered unscorable.

The report found that 30% of those in low-income neighborhoods are credit invisible, compared with 4% in upper-income neighborhoods. In addition, 15% of African American and Hispanic consumers have no credit history compared to 9% of white consumers. 13% of African American consumers and 12% of Hispanic consumers have unscorable records compared to 7% of white consumers.

Credit histories show how consumers have repaid their debts. A lot of Americans utilize credit cards, student loans, mortgages or other types of bank loans. These are easy ways to develop a credit history and a score. When people have neither of these, the impact on their lives can be severe. It can restrict them from earning an education, buying a house or car, or from starting a business.

The solution to a better credit score is Paramount Capital Group. Paramount offers financing for a variety of vocational schools ranging from short-term certification programs to financing full degree programs and continuing education. Schools can use Paramount to tailor a finance program that brings in more students who will train in careers in the culinary arts, auto repair, HVAC, cosmetology and others.

By offering a financing option to your students, that gives them the opportunity at an education and to build their credit. Take the first step and join us today!