Originally posted by Community College Daily on March 29, 2026.
While apprenticeships are surging in popularity — bolstered by a 2025 executive order aiming for one million new federal registered apprenticeships — some experts suggest that tying funding to results could be the key to long-term sustainability.
The “pay-for-performance” (PfP) model represents a significant departure from traditional public funding, which typically provides money upfront for designated activities. Instead, PfP ties incremental award amounts to the achievement of specific milestones, such as hiring, retention and completion.
While PfP apprenticeships have had some take-up in a few past federal grants, state efforts and programs abroad, it also has faced some challenges, not least for how community colleges can most effectively participate, according to community college officials and apprenticeship experts.
The federal push
Last month, the Trump administration announced the $145 million Pay-for-Performance Incentive Payments Program, which represents over half of the $285 million Registered Apprenticeship budget for fiscal year 2025. This signals a major federal pivot toward outcome-based models, says John Colborn, executive director of Apprenticeships for America, a membership and advocacy organization that advocates for the pay-for-apprenticeship funding model.
“There is hope that with evidence of better outcomes, more funding from state and federal sources could be forthcoming,” he says. “We need to move away from time-limited, one-off grants that just don’t give any sort of runway to plan or grow the work that is going on in community colleges and elsewhere.”
Pay-for-performance milestones that trigger payment can include hiring at the start of an apprenticeship, employer retention of an apprentice for a defined time period, the worker’s completion of the apprenticeship and receipt of enhanced wages, Colborn notes.
The new federal PfP program will provide performance-based grants to grow established apprenticeship programs in six key industries, with a focus on shipbuilding and the defense industry. The application deadline is April 3.
Colleges as partners
Individual community colleges may need to apply indirectly for the grants, Colburn says.
“At least for the administrators of this money, they want folks who are going to work nationally, which is not really the way most community colleges are set up,” Colborn says. “They’ve also said they don’t want the operator of the funding vehicle to use that money for their own apprentices. And so what that says to us is that the kind of organization that’s equipped to do this is going to be an organization that works with community colleges and other apprenticeship programs, rather than one that directly administers those programs.”
Grantees are, for example, likely to be an education provider intermediary, a trade association or a consortium of some sort, Colburn says. He adds that Apprenticeships for America is trying to connect community colleges and others who see themselves as being a customer to prospective prime grantees.
Tied to other efforts
Nationally, there is no solid figure for the number of apprenticeships tied to pay-for-performance elements, Colborn says. Apprenticeships for America and America Forward recently surveyed several pay-for-success apprenticeship pilots.
But there have been previous efforts at the federal level in this direction. Last summer, DOL announced it would provide nearly $84 million in grants to states to increase the capacity of registered apprenticeship programs, the third round of State Apprenticeship Expansion Formula funding the department has awarded.
“One of the allowable purposes that the Department of Labor put into that grant solicitation was to use those funds to seed or start a pay-for-success grantmaking effort or funding effort in the state,” Colborn says.
In December, DOL invested $35.8 million in a PfP incentive model awarded to the Arkansas Department of Commerce to expand registered apprenticeship programs in advanced manufacturing sectors nationwide through the American Manufacturing Apprenticeship Incentive Fund.
Real-world results: Dallas College
In 2019, Dallas College received a $12 million, five-year-long DOL grant to build an array of apprenticeships in healthcare for registered apprenticeships that had a PfP component for participating employers, says Anita Bedford, Dallas College’s director of experiential learning. That amount, complemented by a $4.2 million match from Dallas College, included money set aside to provide incentive payments to participating employers who expanded apprenticeship programs, created new apprenticeships, hired apprentices and/or increased the number of apprenticeship completers.
The incentive component helped to attract employers who might not otherwise have participated, Bedford says.
“We had 23 occupations with registered apprenticeship programs, and we served 6,788 registered apprentices,” she says. “The numbers and the ROI afterwards show that it was worth what we put into it. The average return for each employer partner participating in the program [as measured by dollars saved by employees not having to hire or retire in those spaces because of the availability of apprenticeship participants] was $14,000 per apprentice, and we were looking into the millions of dollars when you looked at the return on investment for each employer partner for all their apprentices. And we were at 89% retention of student apprentices at the end of that grant.”
The ROI for participating employers ranged from $2 million to $205 million, Bedford adds.
Lessons from California
Other states have also begun testing the PfP model. Among them is California, which in 2018 set a goal of training 500,000 apprentices by 2029. It supports its effort through a fund that contains a pay-for-performance element. California’s Apprenticeship Innovation Fund (AIF), which began in 2022, offers funding for organizations running apprenticeship programs outside of the fire and construction trades, providing $3,500 per active apprentice per year and a $1,000 completion bonus upon an apprentice’s program completion, subject to state rules.
Charles Henkels, executive director of the LAUNCH Apprenticeship Network, a partner of the Foundation for California Community Colleges that serves as an intermediary for 40 college partners, says it is unfortunate that the program appears likely to sunset in the current funding year due to a lack of state appropriations.
While California state program executives have given the program credit for increasing the number of apprenticeships in the state, Henkels says the rollout was marred by challenges in program design and management.
“I would say the concept behind this program was successful, but the rollout was clunky,” he says.
Some hiccups
One problem was that while the program attempted to target new employers by excluding building and construction trades from eligibility, many of the leading winners were prison guard and utility programs that were long-time apprenticeship players that may not have needed the help. Henkels did note a bump among new entrants in the past year’s awards through the fund.
He also said AIF funding, aimed at sustaining existing apprenticeship programs, was not as impactful as other California seed funding designed to launch apprenticeships, such as California Apprenticeship Initiative New and Innovative Grants (CAIGs), in large part because amounts available under CAIG were vastly larger — roughly $15,000 to $20,000 per apprentice — and funding was available upfront to build programmatic capacity.
Still, Henkels says the concept of sustainability funding is good because seed funding tends to run out and, with it, many apprenticeship programs often do too. He notes that industry partners, in particular, have appreciated receiving at least some funding and have said it has increased their internal support for participation.
The AIF program has been significant for community colleges, says Chris Allen, dean of the apprenticeship program at California’s Foothill College.
“Even though those dollars are not seismic because they’re for smaller programs, it still shows that you generated revenue, and that’s something new for community colleges, right?” Allen says.
PfP elements also have been added to the most recent CAIG seed grant solicitation, Allen says. Grant applications for the 2025-26 program year included, for the first time, language discussing performance and stated that grant dollars would not be released unless recipients met certain metrics.
Allen, a former deputy director at DOL’s Joc Corps workforce program, favors outcome-based standards to screen out weaker apprenticeship programs, which have blossomed given generous California spending on apprenticeships.