Three Key Lessons about Pay for Success in Career and Tech Ed

Social Finance August 5, 2019

Social Finance and JFF (formerly Jobs for the Future) have launched the second round of a national competition to explore how Pay for Success can help expand evidence-based career and technical education programs in K-12 education. For more information on how to apply, please visit our website.

This work is supported through a grant from the Office of Career, Technical, and Adult Education at the U.S. Department of Education.

Image for postPhoto credit: Mahoning County Educational Services Center

During the first round of the Catalyzing Career and Technical Education competition in 2017, Social Finance and JFF selected four sites based on the strength of their program offerings, partnerships, and capacity to scale. We worked with each site for six months to assess the potential of Pay for Success financing to scale their career and technical education (CTE) programs. The sites were —

  1. The Mahoning County Educational Services Center; Ohio
    Leaders of a consortium of school and service providers with the goal of expanding their Mahoning Valley Prepared for Success Initiative to increase availability, access, preparedness, aspiration and completion of high-quality, career technical education programs. The consortium worked to support schools in launching early college pathways programs and to increase internship opportunities, job shadowing, and teacher externships at these schools.

Each of the four sites had a successful exploratory phase where they gained valuable knowledge to improve their programs, practices, and ability to serve students. Each committed significant resources to identify high-quality programs, collect data, develop partnerships, and analyze program costs and benefits. Each thoughtfully examined the target population, engaged with local employers, and drew in stakeholders at multiple levels of government. While the four sites’ models differed, each was focused on helping students gain access to courses and real-world experience, such as internships, that will help them find success in higher education and careers.

This was the first-ever exploration of Pay for Success in K-12 CTE education and we commend the four sites for their commitment to improving outcomes for students and their willingness to adapt and experiment with new ideas and models. Ultimately, three sites chose not to move forward with a Pay for Success project due to a diverse set of factors (leadership transitions, prioritization of grants and staff time, etc.). Pharr-San Juan-Alamo Independent School District is currently developing a Pay for Success project with the continued support of Social Finance and JFF.

Throughout the first round of technical assistance, Social Finance, JFF, and the partner sites gained insight into what factors make Pay for Success a good fit for scaling CTE. Specifically, strong signals of PFS readiness includes:

  • Committed outcomes payors: Outcomes payors are entities that will pay for improved outcomes such as increased graduation rates or post-secondary achievement. We learned that while school districts are the primary provider of CTE services, the payors are likely to be outside of school districts. In particular, the most likely outcomes payor within the education system is the state department of education, where much of the value of improved educational outcomes accrues. There are also potential outcomes payors within the workforce system, including state departments of labor or private employers. Committed outcome payors are the strongest indicator of a project moving from feasibility into project development.

These key criteria for PFS readiness should factor into providers’ decisions to pursue Pay for Success. Programs most likely to succeed will be able to identify a committed outcomes payor, a precedent for sharing data, and existing cross-sector partnerships.

The lessons we have learned in conjunction with these first four sites have helped us to identify strong signals of PFS readiness among CTE sites. We look forward to applying those lessons in order to expand access to high-quality CTE programs through Round 2 of the competition. Qualified sites with an evidence-based CTE model and potential outcomes payor should visit our website for more information on how to apply for technical assistance.