State career scholarships near capacity after slow, chaotic Year 1
When Indiana launched its new Career Scholarship Accounts program last year, state officials expected a flood of eager students . . . but in that first year, only around 200 students signed up – far below the 1,000 anticipated.
That revelation earlier this year led many, including us, to wonder what went wrong. Did lawmakers miss the mark on how many students would actually be interested in apprenticeships and work-based learning? Or did the program just need time to gain its footing? What will happen to the program in its second year, which has double the budget of the first?
The state fiscal closeout in July further revealed that the Indiana Treasurer of State, the agency that leads the CSA program, returned more than one-half of its money – $3.8 million of unused CSA funding reverted when $5 million had been budgeted for the program in year one last year. This year, $10 million is budgeted.
So, again, what happened? Tina Kaetzel, executive director of the Scholarship Accounts Division for the Treasurer’s Office, tells your favorite education newsletter that the inaugural year was plagued by what she labels a storm of challenges – from tight legislative timelines to confusing eligibility issues that left a lot of students mistakenly thinking they qualified. All of that was on top of the challenge of integrating the program with existing education funding streams.
We’ll circle back to a review of the first year in a second.
Today, after some clear growing pains in the last year, the CSA program is on the up, already nearing capacity for year two, with still one month left to go until applications close on October 1.
Kaetzel tells us 1,464 student applications are approved and funded for CSAs, and 355 students are still in processing at the Treasurer’s Office.
With $10,000 budgeted for this fiscal year, the program is capped at 1,900 scholarships for the 2024-25 school year . . . meaning there will be roughly just 81 spots left if the 355 pending applications receive approval. Each student with a CSA is awarded $5,000 to offset expenses for approved internships, apprenticeships, work-based learning, and credential programs.
“It’s exciting to see exponential growth from the inception of the program last year to where the program is today,” Kaetzel enthuses.
Recapping and Scrapping Year One
Moving the CSA program to the point where it could max out on scholarships available was no easy feat, especially last year, Kaetzel recalls.
“Oh, we respectfully threw the first year in the paper shredder,” Kaetzel laments. “We didn’t even have enough time to think and coordinate with even the other agencies that are involved, let alone just us.”
When the General Assembly passed HEA 1002-2023 to create CSAs, that launched a rapid timeline for the Treasurer’s Office, the Indiana Department of Education, and the Indiana Commission for Higher Education to work together to push something out.
All three agencies had only about a month to implement the program after the law took effect on July 1, 2023. The Treasurer’s Office took the lead on most of the program, in terms of processing applications and disbursing the funds. IDOE and ICHE worked to vet programs and employers to receive CSA money from approved students.
All of that had to occur simultaneously, where a student would apply for a CSA, while their employer or program was still getting approval from IDOE and ICHE. That led to confusion on eligibility, and several students getting denied. Some employers interested in CSAs also held back in the first year, waiting to see how the program would establish itself first.
“The other agencies were trying to get in their providers. So it was like, we let everybody in, you know, hundreds and hundreds of students. And then we’re like, oh, we can’t get to yes on this one,” Kaetzel explains.
Another hiccup was that a veritable avalanche of students in Indiana College Core classes tried signing up for CSAs, perhaps not understanding what they could use the program for, which also led to hundreds of applications getting denied. “They just thought we could underwrite their Ivy Tech courses. No, that’s not what this program is for. Not the same thing,” Kaetzel recalls.
There was also the issue of a short seven-day window between when a student was approved and when they had to set up their bank account for a CSA through the provider Class Wallet. The Treasurer’s Office found that was way too short of a timeframe. Lawmakers took note of that and fixed the timeline to 30 days, giving more time for communication between the state agencies, employers, parents, and schools before setting up the account.
Lessons Learned in Year Two
Going forward, the state will look to this second year as more of a baseline to measure the success of the program.
“It was like, we just kind of said, ‘Okay, I don’t even want to talk about year one,’” Kaetzel reflects. “It’s almost like year two is completely different.”
In the program’s second year, state officials worked to address those early issues, including streamlining the application process, improving communication with schools and employers, and expanding access. The Treasurer’s Office also hired Parker Zent as the program manager for the education scholarships division to solely work on the CSA program.
More than 3,700 program seats through different approved provides are approved for students to choose from if they want to apply for a CSA. Nine public school districts and private schools joined the program. Additionally, 35 employers, 10 nonprofits, and four intermediaries (agencies that help with student placement) are also on the approved list to collaborate with students.
The process is already working better now with a bigger list of approved providers. Now, student applications are streamlined to where in order for a student to get the money, they have to be enrolled with one of the approved providers.
“The front door is what provider are you in? Here are 60 providers. If you’re not attached to one of these, do not start. Do not pass go. Do not collect your $5,000,” Kaetzel explains.
How it Works
Students have the $5,000 CSA transferred into their ClassWallet bank account once approved. Expenses can be paid through invoicing uploaded to that site.
Students can then use the money for a number of qualified expenses. That includes the cost to enter whatever program, apprenticeship, or internship they are in, including a tuition fee or materials and equipment needed. They can use the money to pay for a needed certification or credential or a career coaching or navigation service. Equipment needed for a program a student is in could include a toolbox, or maybe supplies for a cosmetology apprenticeship, or school materials for a student teaching apprenticeship, for example.
Per an addition made to the program by lawmakers this session, students can also now use up to $1,000 from their CSA to obtain a driver’s license. For other transportation costs outside of that, students can use up to $625 to cover that, if they prove hardship and if the student’s provider matches the expense. That could include expenses for tolls, ridesharing, or gas, for example.
The results of the three agencies working out the early kinks in the CSA program seem to be paying off already, as we mentioned since the program is already almost at capacity now.
The Bigger Picture and What to Expect Next
The expectation is for the program to continue to grow beyond this point. Kaetzel notes from the first year, they learned the importance of listening to feedback from outside stakeholders, which includes parents and employers.
With the 2025 budget session looming ahead (and we’re hearing money may be tight), Kaetzel wouldn’t reveal if she plans to ask for more cash to further expand CSAs.
“I think there’s a lot changing within our political world, and so I think we just kind of have to wait and see,” she explains.
Keep in mind that there was already a big change proposed for CSAs in the 2024 session as a taste of what could be discussed in 2025. You may recall Senate Committee on Appropriations Chair Ryan Mishler (R) of Mishawaka proposed a sweeping new program that would combine Indiana’s Choice Scholarship Program, which is managed by IDOE, the Education Scholarship Accounts, and CSAs under one umbrella managed by the Treasurer’s Office. State Treasurer Daniel Elliott (R) also presented this proposal along with Sen. Mishler when it got a hearing before the appropriations panel, implying his support of this move as well.
We expect this Mishler measure to make a return in some form in the budget, as he indicated that was his plan when giving it airtime during the non-budget session. What exactly this means for the future function of the CSA program is unclear . . . and Kaetzel couldn’t offer us more insight into any upcoming changes.
We’ll also be watching how CSAs will fit into the current high school diploma redesign, which as you may know if you’re a frequent reader of this newsletter, heavily focuses on work-based learning and preparing students for the workforce, no matter the path they choose.
As you may have noticed by now, CSAs are just one piece of the puzzle the state is trying to build to boost educational attainment through apprenticeships and real workplace experiences. This all falls under the broader plan to “reinvent high school.”
Of course, the elephant in the room, per se, is the question of whether Indiana can handle the amount of upscaling it wants to do for work-based learning opportunities and apprenticeships.
A new report this week from the Indiana Fiscal Policy Institute cautions that scaling the apprenticeship programs to meet current needs “will be challenging.”
IFPI in its report, authored by Stephanie Wells, cautions that a scalable apprenticeship model is difficult to meet. The report recommends simplifying regulations, providing state-funded incentives, and improving access to apprenticeship data. Indiana’s employment landscape shows a significant gap between available jobs and workers, with a 3.6% unemployment rate and a labor force participation rate of 62.5%, according to the report.
There’s also a low rate on apprenticeship completion. Nationally, only 35% of students finish a program once enroll, the report notes. Despite this, the IFPI brief emphasizes the need for Indiana to implement policies and program designs aimed at improving this rate and making apprenticeships more accessible to diverse populations.
Even with these low completion rates, research shows that employers still see a positive return on investment from hosting apprentices. Data indicates that for every dollar invested in an apprentice, employers gain $1.44 in benefits, reflecting a 44% return.
With that in mind, jumping back to the early effects of the CSAs, Kaetzel is already pointing to positive returns on investment, even in the chaotic first year. The students who were funded last year saw success. She recounts one student who landed a job as an auto mechanic earning $78,000 straight out of high school, thanks to support from the CSAs. Such stories are exactly what the CSA program aims to achieve, she asserts, even if the early implementation was rocky.
“Talk to just a few of these students,” Kaetzel urges. “It will blow your socks off.”
Also intriguing in terms of student interest, Kaetzel expresses excitement for the opportunities available for students in nonpublic schools. She’s, so far, been impressed with the private school students enrolling. “They are coming in droves,” she reveals. “Last year we averaged about 20-25, [private school] students per partnership.”
The influx of private school students likely could stem from smaller schools not having as robust of career and technical education programs as some public schools. Could be interesting to watch where CSA students are coming from, and what they end up doing after using the program.
As always, we’ll keep you up to date as the CSA program, and all other initiatives trying to “reinvent high school,” continue to evolve