U.S. Department of Education Issues First-Ever Pay for Success Awards to Expand Opportunity in Career and Technical Education, Dual Language Programs

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U.S. Department of Education Issues First-Ever Pay for Success Awards to Expand Opportunity in Career and Technical Education, Dual Language Programs

For Town Hall with President Obama, White House Features New Pay for Success Awards as Latest Progress in Commitment to Find and Scale What Works in Advancing Opportunity
October 11, 2016

The U.S. Department of Education announced today its first-ever awards supporting Pay for Success (PFS) strategies. The awards will use the innovative PFS funding approach to improve outcomes for at-risk youth by finding and scaling career and technical education (CTE) programs, as well as to advance effective dual language programs for early learners.

Today, the President will participate in a town hall-style forum on ESPN at 10 p.m. ET at North Carolina A&T State University, a historically black institution. The event is an opportunity for the President to discuss progress made through his My Brother’s Keeper initiative (MBK) and through the important role and legacy of Historically Black Colleges and Universities. Connected with this Presidential event, the White House is spotlighting the new Education Department's awards as the latest examples of the Administration’s continued emphasis to find and scale what works in advancing opportunity for vulnerable populations.  Since its founding, a core goal of MBK has been promoting what works to better serve at-risk youth, including boys and young men of color.

Pay for Success, the centerpiece of the President’s social innovation agenda, is a new funding tool designed to find and scale what works. PFS helps government fund better, more effective solutions by aligning funding with positive social outcomes. Instead of paying upfront for the promise of results, PFS enables government to pay only after positive outcomes are achieved. Impact investors often cover the upfront costs of providing services and are repaid with a modest return if individual lives are measurably improved as determined by an independent evaluator. PFS is being deployed across the country to improve outcomes in a variety of areas, including maternal and child health, early childhood education, family stability and homelessness, and criminal justice.

With today’s announcement, the Department of Education breaks new ground, supporting the use of PFS for CTE programs serving at-risk youth and to exploring the use of PFS for young English language learners:

  • To improve outcomes for underserved, high-need youth, the Department has awarded a $2 million grant to the Boston-based Social Finance Inc., in partnership with Jobs for the Future (JFF), to support the development of PFS projects to implement new or scale up existing high-quality CTE opportunities. A student who has benefited from JFF’s work will participate in the ESPN forum with President Obama.
  • To improve outcomes for children learning English, the Department has awarded a $293,049 contract to the Washington, D.C.-based American Institutes for Research (AIR) to conduct a feasibility study that will identify at least two promising school sites that are using evidence-based interventions for early learning dual language models where a PFS project could take shape to help scale the interventions to reach more students those who need them.

“There has never been a greater need to focus on improving outcomes for our most at-risk student populations such as economically disadvantaged students, justice-involved students, English learners, Native American youth, and children with disabilities,” said U.S. Secretary of Education John B. King Jr. “Pay for Success is yet another promising tool to improve outcomes for at-risk students and promote evidence-based policy. By funding outcomes, rather than activities, Pay for Success facilitates an allocation of resources towards interventions that improve the lives of the students they serve. It is not a substitute for government funding; in fact, Pay for Success can be useful in proving the case for increased public investment in successful interventions.”

The Department’s PFS efforts support the Administration’s priority to offer new ways to support social sector innovation, drive better results, and more effectively use taxpayer dollars. The Department of Education today joins a growing number of federal agencies under the Obama Administration that are using Pay for Success.

“The Obama Administration supports Pay for Success because it is advancing proven, data-driven solutions that are getting better results for communities in need,” said David Wilkinson, Director of the White House Office of Social Innovation, and chair of the My Brother’s Keeper Federal What Works Working Group. “MBK communities are increasingly looking to Pay for Success as a new way to fund what works. With these awards, the Department of Education is expanding the Pay for Success toolkit. Social Finance has been selected to do pioneering work with Jobs for the Future: to find and scale better, more effective education solutions for at-risk youth through Pay for Success. AIR was chosen to perform the first ever feasibility study applying Pay for Success to for dual language learners. The White House applauds the Department of Education and the awardees for taking on this groundbreaking work.”

Career and Technical Education for At-Risk Youth

Social Finance and Jobs for the Future will hold a competition to select four local programs with a focus on CTE and will help them determine how a PFS project could pilot or expand CTE opportunities for students. Social Finance will then help up to three of these sites actually construct and launch high-quality PFS projects for CTE. A growing body of evidence indicates that these CTE programs produce positive outcomes for underserved youth, including increased rates of high-school graduation and achievement of credentials.

Dual Language Programs for Early Learners

AIR will study how educational outcomes for students learning English could be improved through Pay for Success strategies, which can leverage private funding for services upfront and allow government to pay only once individual lives measurably benefit. Children learning English may need supports to ensure they read at grade level by the third grade – a milestone widely accepted as key for a child’s future success. Yet schools and communities don’t often have the resources they need to provide those services. The target population for the research will be Spanish-speakers, who represent approximately 80 percent of English learners.

“This initiative provides an opportunity to focus on long-term evidence of effectiveness and to bring in our state and local partners, along with private and philanthropic investments, to test new ideas, develop new solutions, improve the quality of early learning and further improve outcomes for our most vulnerable children,” said Libia Gil, assistant deputy secretary and director of the Office of English Language Acquisition.