Congress’ Drive to Slash Federal Spending Could Eliminate Grants for Driver Training

This story appears in the March 7 print edition of Transport Topics.

Truck driver training schools face a potentially crippling loss of revenue following a vote in Congress that could eliminate federal funding of job training grants.

A resolution approved by the House of Representatives by a vote of 235 to 189 in February would stop all spending on the Labor Department’s Workforce Investment Act programs that provide grants to people enrolled in truck driver training and other vocational and career education programs.

“At many schools, this funding accounts for as much as 70% of all student funding,” said Lou Spoonhour, owner of Driveco CDL Learning Center in Gary, Ind.

“The consequences of such a cut would be crippling to the trucking industry in its ability to attract entry-level drivers that are desperately needed,” he said in written testimony presented to House Transportation and Infrastructure Committee at a Feb. 20 hearing on transportation policy in Chicago.

House Appropriations Committee Chairman Hal Rogers (R-Ky.) called passage of the resolution “a monumental accomplishment” for taxpayers.

“It dramatically scales back the size and scope of domestic government programs, eliminates $100 billion in spending compared to what the president asked for last year and will mark the beginning of a new trend of reductions that will take place throughout the next year.”

The Senate, on March 2, approved a stop-gap funding bill to keep the government operating for two weeks while lawmakers consider budget proposals.

The loss of job training funds could sharply reduce the number of drivers at a time when many fleets are ramping up recruiting efforts in anticipation of increasing demand for freight hauling and a surge in the number of drivers retiring in the next few years, industry officials said.

“It’s hard to believe that the House of Representatives is serious about job creation when they are cutting funding for an industry that needs to hire 400,000 drivers,” said Mike O’Connell, executive director of the Commercial Vehicle Training Association in Springfield, Va.

CVTA’s 59 member schools trained about 50,000 drivers last year and, according to O’Connell, 90% of graduates are employed in truck driving jobs. He said this makes driver training one of the most successful of all job training programs and one that provides a positive return on investment for the government as drivers pay back the cost of training grants in taxes over a two- or three-year period.

“It’s a job for life,” O’Connell said. “You can’t outsource this occupation.”

A lack of drivers could also have negative consequences for the broader economy if fleets scale back orders for new trucks and manufacturers reduce production of new vehicles, O’Connell said.

Most school officials said they see no alternative to government funding for the majority of individuals enrolled in driver training programs.

Many of the students seeking training as truck drivers have been laid off from construction and manufacturing jobs and do not have good enough credit to qualify for loans to pay for driver training, which can range from $4,000 to $6,500 for a four- to eight-week course, Spoonhour said.

Without loans or grants, the number of people enrolled in driver training schools “will drop precipitously,” said Mark Greenberg, president of New England Tractor Trailer Training School, a program that operates in Massachusetts, Rhode Island and Connecticut.

Between 400 and 500 students enrolled at NETTTS have received grants through the WIA program, Greenberg said.

Some students receive Title IV education grants, but Greenberg said that aid is limited to a handful of schools that offer more extensive training and are certified by the Department of Education.

Another form of assistance is tuition reimbursement in which companies pay a driver in installments over a 12- to 18-month period to cover the cost of training.

While some large companies have instituted tuition reimbursement, Greenberg said the idea has limited appeal to smaller companies that collectively hire the most drivers.

“I don’t see how those companies can keep up with the massive numbers of drivers that are needed,” Greenberg said.

Fred Kirschner, owner of Smith & Solomon Driver Training in Bordentown, N.J., said schools also lack the financial wherewithal to cover the upfront cost of training and the risk of nonpayment by graduates.

Kirschner said he thinks that trucking companies may need to band together to support regional training facilities and perhaps could put money into a revolving fund to make loans to students.

“There needs to be dialogue about what’s possible,” Kirschner said.

Jim Voorhees, president of Instructional Technologies Inc., Vancouver, Wash., said about one-third of driver training schools went out of business during the recession years of 2008 and 2009 when fleets weren’t hiring.

Some fleets also abandoned in-house driver training programs are now are looking to re-start training programs or are seeking ways to work more closely with schools to provide training, Voorhees said.