The Infrastructure of Workforce Training
Policy shifts in Washington are aligning grant administration, workforce funding priorities, and higher education structure around employment outcomes.
Summary: Federal policy is reorganizing the infrastructure that connects education to the labor market. Three developments are occurring simultaneously in FY2026:
1) Administration of more than forty education and workforce grants is shifting from the U.S. Department of Education’s G5 platform to U.S. Department of Labor systems.
2) Federal funding proposals direct roughly $3 billion toward workforce programs with at least 10 percent reserved for apprenticeships.
3) Federal officials are considering policies that may accelerate higher-education consolidation.
Together these developments could reshape which institutions deliver publicly funded workforce training.
Today’s Deep Dive covers:
How Is the Federal Government Reorganizing Administration of Workforce and Postsecondary Grants?
Why Is Federal Workforce Funding Prioritizing Apprenticeships and Employer Outcomes?
Could Higher-Education Consolidation Reshape the Workforce Training Market?
Original Research: Measuring AI impact in Higher Ed workflows
A recent field study by our research partner Emerging Strategy looks at how AI is actually being applied inside specific higher ed institutional workflows. The broad takeaway: AI is collapsing first-pass work, turning hours into minutes and making previously deferred work feasible without changes to staffing. It’s a useful lens for where AI is meaningfully reshaping workflows and where it isn’t.
Contact Emerging Strategy if you need more information.
Before we get into today’s deep dive, a quick straw poll:
The Deep Dive: The Infrastructure of Workforce Training
I. How Is the Federal Government Reorganizing Administration of Workforce and Postsecondary Grants?
A structural change in the administration of federal workforce and postsecondary grants began in FY2026 following an interagency agreement between the U.S. Department of Education and the U.S. Department of Labor signed on September 30, 2025. The agreement places operational management of more than forty programs onto Department of Labor grant infrastructure while leaving statutory authority and program policy within the Department of Education.
Historically, most education-related grants were administered through the Department of Education’s internal grant management system known as G5. Under the FY2026 arrangement, applications continue to be submitted through Grants.gov, and statutory program rules remain unchanged. After awards are issued, however, administrative management moves to the Department of Labor’s GrantSolutions system and the federal Payment Management System (PMS).
Programs covered by the interagency agreement represent a large portion of federal postsecondary access and workforce preparation funding. These programs include: