FINISH Act Could Provide Federal Opportunities for Pay for Success in Higher Education

This blog series is centered on Third Sector’s assessment and applicability of Pay for Success in higher education in partnership with a new cohort of stakeholders.

This is blog post #2 of the series.

As you may have read in our first blog of this series, we are developing a national cohort of higher education institutions, college access and success providers, and funders that are interested in exploring Pay for Success (PFS) as a way to fund wraparound student support services that improve matriculation, persistence, and graduation outcomes for underserved students. With Kresge Foundation support, we have recently released two requests for information, aimed at leaders of higher education systems and college access and success providers, as a first step toward building pilot PFS projects. As we engage potential stakeholders in our national cohort, we are simultaneously tracking legislation that, if passed, would be supportive of our work.

Last month, three U.S. Senators, Todd Young (R-IN), Michael Bennet (D-CO), and Tim Scott (R-SC), reintroduced the Fund for Innovation and Success in Higher Education (FINISH) Act, which is bipartisan legislation that would leverage the power of evidence and innovation to improve outcomes in higher education, particularly for vulnerable students.

The FINISH Act is a bill aimed at amending the Higher Education Act of 1965, a law intended to strengthen the educational resources of colleges and universities and to provide financial assistance for students in postsecondary and higher education. As re-introduced, the FINISH Act supports innovative, evidence-based approaches that improve the effectiveness and efficiency of postsecondary education for all students, allows Pay for Success initiatives, and provides additional support through interventions which increase postsecondary degree attainment of high-need students.

“Currently higher education is falling short in serving our most vulnerable students. The FINISH Act helps to reform this broken system by using incentives to adopt innovative solutions with a track record of success. This bill works to ensure our students have the tools to finish a credential or degree pathway – not just start.” - Senator Todd Young (R-IN)

Language included in the FINISH Act bill would strengthen several initiatives that are currently supporting underserved and high-need students, such as:

  • Creating a tiered-evidence innovation fund that would test, replicate, and scale up successful approaches to improving access to and completion in higher education, including partnerships among states, nonprofits, K-12 institutions, and institutions of higher education;
  • Encouraging institutions of higher education to create open educational resources, such as materials for teaching or learning that are in the public domain or have been released under a license that allows them to be freely used, changed, or shared with others;
  • Authorizing 5 pilot Pay for Success initiatives that would invest federal funds for proven solutions once they demonstrate results; and
  • Authorizing the U.S. Department of Education and Institute of Education Sciences to invest up to 1 percent of federal higher education funds in evaluations to continuously improve their impact and results.

Third Sector is proud to join more than 120 universities, leading nonprofit organizations, and current and former higher education leaders and government officials in signing a letter in strong support of this legislation. The efforts of bipartisan partners like America Forward, New America, and Results for America helped advocate for this critical legislation to begin promoting equitable access to and success in higher education, particularly among traditionally underserved populations. Third Sector hopes as language in the FINISH Act continues to evolve, the legislation will embed and promote trends and learnings from past Pay for Success projects. Third Sector will continue to support legislation that offers an opportunity to develop pilot Pay for Success projects, which will further catalyze the shift toward an outcomes-orientation and a focus on long-term positive results.

Third Sector is excited about the opportunities that may become possible through the FINISH Act, especially given our current effort to build a cohort of partners that will explore ways to leverage PFS models to systematically finance evidence-based access and success reforms that improve student outcomes. Through our two released requests for information, state higher education systems and student support providers will have an opportunity to participate in building Pay for Success projects. As members of our national cohort, state departments and systems of higher education will workshop key feasibility components of Pay for Success, nailing down critical details that will set sites up with the partnerships and infrastructure to leverage FINISH funding, should it pass. Providers will also have an opportunity to inform the national landscape and conversation around FINISH and actively ensure government goals are aligned with provider and student needs. Providers who have already begun the journey of building relationships with governments and demonstrating readiness for Pay for Success will have a higher degree of readiness for PFS if FINISH funding is deployed.

States and Systems of Higher Education

To learn more about the Request for Information opportunity available for States and Systems of Higher Education, and to access the recording of our informational webinar, click here. The application deadline for this opportunity is Friday, May 17 at 5:00 p.m. EST.

College Access and Success Providers

A critical part of our cohort-building process is to better understand the landscape of wraparound student support services that are improving student outcomes to and through college. Therefore, Third Sector is asking college access and success providers to help shape how states and higher education systems construct PFS projects by submitting information in a separate RFI by Friday, May 31 at 5:00 p.m. EST. To access the recording of that informational webinar, click here.

For more information and all key dates please visit the project webpage.

Third Sector: Implementing projects by leveraging legislation

Over the last decade, agencies across the Federal Government have moved to expand their use of data, evaluation, and performance measurement. Federal agencies continue to build off this work by embracing outcomes contracting and Pay for Success as a structure to incentivize the collaborative use of data and evaluation for performance management and improved outcomes. The Federal Government is increasingly utilizing mechanisms like outcomes contracting and Pay for Success to ensure all stakeholders are driving toward agreed upon outcomes. This alignment supports systematic improvements in social services and makes efficient use of taxpayer dollars.

Third Sector has a track record of working alongside communities to harness innovative opportunities enabled by the federal government and providing the training and technical assistance necessary to enable and implement this shift. Having led four projects funded by The Corporation for National and Community Service’s (CNCS) Social Innovation Fund (SIF), and working directly with several federal agencies, Third Sector has deep experience leading initiatives that develop the necessary capacities to launch pilot Pay for Success initiatives. Some examples of this include:

  • Third Sector’s 2017 workforce cohort: Motivated by the Workforce Innovation and Opportunity Act legislation signed into law in 2014, Third Sector supported the use of outcomes contracts to leverage Workforce Innovation and Opportunity Act (WIOA) Pay for Performance (P4P) provisions. SIF granted Third Sector funding to run a competition and select five communities were to receive Third Sector technical assistance focused on implementing P4P provisions  to strengthen youth workforce development programs throughout the United States. After receiving Third Sector TA, two sites (Northern Virginia Workforce Development Board and San Diego Workforce Partnership) successfully launched projects, utilizing P4P contracts, enabled because of WIOA’s shift towards longer-term outcomes.
  • Third Sector’s Preschool PFS feasibility projects: In 2017, the U.S. Department of Education authorized funding to support a cohort of eight government organizations for a Preschool Pay For Success feasibility pilot, to explore how the Pay for Success (PFS) model can improve access to high-quality preschool and improve outcomes for children experiencing discrepancies in long term academic success. Third Sector partnered with three of the eight preschool PFS feasibility grantees in Cuyahoga County (Ohio), Mecklenburg County (North Carolina), and Santa Clara County (California). Through these feasibility assessments, Third Sector engaged state and local stakeholders in each community to identify and develop recommendations to improve priority early care, academic achievement, social emotional development, and attendance outcomes, to understand the education funding landscape, and to identify ways to strengthen and expand community partnerships. Though none of the pilots launched, all partners were able to develop key capacities and infrastructure, including a specific focus on outcomes. Through the alignment of goals and relevant systems, and by strengthening an integrated focus on outcomes in their contracting, each community is in a better position to leverage tools like PFS; each of the three have either launched PFS projects or are developing outcomes-oriented procurements in other issue areas.

Third Sector provides critical training and technical assistance for communities aspiring to leverage innovative policies intended to improve outcomes. The two jurisdictions to initiate projects through WIOA were incentivized by the legislation, but needed additional capacity and support to implement the desired programmatic shifts in their communities. Implementation of social policy innovation requires an alignment of policy, dollars, services, and data, In order to achieve that alignment, many communities need facilitated technical assistance to coordinate across systems and accelerate progress. In all future social innovation policy, including the FINISH Act, Third Sector believes the initial integration of training and technical assistance resources in the legislation gives communities the best opportunity to develop sustainable projects that lead to impact.