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.

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.

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