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New Funding Model to Support Career and Technical Education Programs

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Four organizations have been chosen to create or expand career and technical education programs through a grant-funding model that requires government agencies to pay for the projects only after they've proven they're successful.

Advanced by President Barack Obama, the "pay for success" approach pools private investments to fund projects supported by the U.S. government—in this case, career and technical education programs—with a promise of government reimbursement if the project proves its effectiveness. 

On Tuesday, Jobs for the Future, a group that works on education issues, and Social Finance, an organization that assembles funding, announced the four CTE projects that will launch through the U.S. Department of Education's "pay for success" grant program. Last October, Jobs for the Future and Social Finance won a $2 million grant from the department—its first under the "pay for success model"—to solicit possible projects. Now the two groups have chosen the projects that will move forward. 

They are:

  • South Bay Community Services, in San Diego County, Calif., will launch a CTE program designed to support traumatized youth 16 to 24 years old. It will include enriched academic preparation, support making college connections, and extended support into the first year of college.
  • NAF, a New York-based group that runs a network of career academies, will expand fully paid internships.
  • Mahoning County Educational Services Center, in northeast Ohio, will double the reach of its career-focused, early-college programs.
  • Pharr-San Juan-Antonio Independent School District, in the Rio Grande Valley of Texas, will increase enrollment in a new program focusing on agriculture, food, and natural resources.  

All four projects are designed with equity in mind, to focus on underrepresented students, said Karyl Levinson, a JFF spokeswoman.

After an initial feasibility-study period, the four groups' projects are expected to be up and running in a year to a year and a half, said Anna Fogel, Social Finance's director of advisory services. 

The four sites will provide services for several years, and collect evidence of effectiveness, Fogel said. It will be at least four to six years before the Education Department would judge the projects' success and decide on reimbursement, she said.

More than a dozen other "pay for success" projects are underway around the country with other government agencies, including a project by the U.S. Department of Housing and Urban Development that focuses on reducing homelessness. Another "pay for success" project, launched by New York state, focuses on reducing prison recidivism. A similar effort in New York City launched in 2012, but ended in 2015 without meeting its success metrics

When the Education Department awarded the $2 million grant to Social Finance and Jobs for the Future, it also awarded a $293,000 contract to  American Institutes of Research to identify sites using promising early-learning, dual-language models, for possible expansion in a later "pay for success" project. 

Last December, the Education Department awarded $3 million to eight counties and education agencies to explore the possibility of developing preschool programs with the "pay for success" model.

Although the Education Department's "pay for success" projects were begun under President Obama, leaders of the new CTE project said they didn't anticipate difficulty getting government reimbursement, as long as they do what they're supposed to do—produce success metrics.

"We have evidence that there is bipartisan support for this funding model, and for this particular intervention, career and technical education," said Charlotte Cahill, the associate director of Jobs for the Future's Pathways to Prosperity Network, which works to create high-quality CTE programs.


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