Change 1 to Training and Employment Guidance Letter 02-25, Industry-Driven Skills Training Fund Grant Program

The U.S. Department of Labor’s Employment and Training Administration (ETA) announced the availability of approximately $40 million for Round 2 of the Industry-Driven Skills Training Fund Grant Program, authorized under the Workforce Innovation and Opportunity Act (WIOA). This program provides grants to State Workforce Agencies (SWAs) to form public-private partnerships with employers, offering outcomes-based reimbursements for up to 80% of actual training costs to upskill incumbent workers and train new hires. Eligible lead applicants are limited to SWAs, excluding Round 1 grantees or those designated as "at-risk." Individual grant requests must range between $3 million and $8 million for a 45-month period of performance starting October 1, 2026. This period includes a mandatory 60-day post-award planning phase to finalize the project's Statement of Work. Grantees must allocate at least 90% of funds directly to employer reimbursements, leaving up to 10% for program operations. Reimbursements are issued in two performance-based milestones: upon training completion, and after six months of post-training job retention. Priority training industries include shipbuilding (allocated at least $5 million of the total funding), aerospace, advanced manufacturing, artificial intelligence infrastructure, nuclear energy, domestic mineral production, and information technology. Applications must be submitted electronically via Grants.gov by August 17, 2026. Evaluation will be based on a 68-point merit scale assessing the applicant's statement of need, implementation plan, and strategy for employer engagement and training innovation.