Providing High-Quality Career and Technical Education Programs for Underserved, High-Need Youth through a Pay for Success Model Program

1 in 7 teens and young adults in the U.S. are neither working nor in school¹.

 

THE CHALLENGE
In the U.S., there are roughly 5.5 million teenagers and young adults between the ages of 16 and 24 who are neither working nor in school¹. This translates to one in seven teens and young adults. These numbers, while discouraging, present a tremendous opportunity for retooling our nation’s career and technical education programs and scaling up promising practices to address the needs of our nation's most vulnerable students.

OUR RESPONSE
Pay for Success (PFS) is an innovative financing model that tests and advances promising and proven interventions, while providing taxpayer (or other) dollars only for successful outcomes for students, families, communities, States, and regions. PFS financing models leverage philanthropic and private dollars to fund services upfront with the government paying after certain outcomes have been achieved.

In 2016, the U.S. Department of Education, Office of Career, Technical, and Adult Education (OCTAE) awarded a $2 million grant for a 48-month period to an Intermediary, Social Finance, Inc., to provide technical assistance for the first two of three phases of a PFS financing model. In phase one, the Intermediary will complete feasibility studies in four local CTE sites. In phase two, the Intermediary will provide or support transaction structuring, based on the limited funding level, for up to three out of the previously identified four local sites to the extent that the local site's CTE PFS project is determined to be feasible. While it is our intent that all of the selected local CTE PFS projects will result in a fully-structured PFS project ready to launch, each program may have different challenges that might result in not all projects completing these first two phases by the end of the grant period. The ultimate aim of the CTE PFS TA program is to improve outcomes for underserved, high-need youth through fully-structured high-quality PFS projects ready to be implemented in the local CTE sites using high-quality CTE programs.

TOOLS AND RESOURCES
For further information, please visit the Perkins Collaborative Resource Network at cte.ed.gov.

¹ Lewis and Burd-Sharps, Kristen and Sarah (June 10, 2015). "Zeroing In on Place and Race: Youth Disconnection in America's Cities"(PDF). Measure of America, Social Science Research Council. Retrieved 6 October 2016.