The U.S. Department of Education (ED) supports initiatives that are based on evidence, focused on outcomes and improve education for students at all ages, including early childhood, elementary and secondary education, career and technical education, adult education, and post-secondary education. Pay for Success (PFS) is one of several strategies that ED can use to promote evidence-based policy. It 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.
Americans have developed approaches to tackling important societal issues. Some of the services provided are already proven by rigorous evaluation to be effective; others show tremendous promise. But with limited resources available, these programs often are not equipped to make the kind of impact that our nation needs.
Pay for Success (PFS) can be a solution. It tests and advances promising and proven interventions, attracts investment funds, while providing taxpayer (or other) dollars for successful outcomes for families, individuals, communities, or natural resources. Through PFS, government (or another entity) enters into an agreement to pay for concrete, measurable outcomes once they are achieved for specific groups of individuals, or communities States or regions in need. Instead of funding services regardless of the results, payments of taxpayer funds are made only if interventions actually achieve the outcomes agreed upon in advance. For example, instead of paying for professional development or training simply to be provided, a community might use PFS to pay only when individuals gain professional credentials, and stable employment in good jobs, and achieve positive results in their jobs. When government employs PFS strategies, taxpayers no longer bear the risk of paying for services that are ineffective because resources are not expended until the services have produced a specific benefit. Pay for Success is an innovative way of partnering with philanthropic and private sector investors to create incentives for service providers to deliver better outcomes at lower cost—producing the highest return on taxpayer investments.
The Department is working on a variety of Pay for Success projects:
The Office of Elementary and Secondary Education is managing $3 million in awards to eight government organizations for Preschool Pay for Success feasibility pilots to determine if Pay for Success is a viable and appropriate strategy to implement or expand high-quality preschool and improve educational outcomes for 3- and 4- year-olds.
The Office of Special Education Programs (OSEP) is working with its OSEP-funded early childhood technical assistance centers (ECTA and DaSy) to build capacity among state coordinators in IDEA Part C Early Intervention and Part B Preschool to explore using PFS to expand or improve programs and services for young children with disabilities and their families.
The Office of English Language Acquisition is working with the 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 who need them.
The Office of Career and Technical Education has a cooperative agreement with 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 evidence-based CTE opportunities designed to improve outcomes for underserved, high-need youth.
Below for your ease of reference, we provide links to various resources regarding PFS.
Link to Corporation for National and Community Service:
http://www.nationalservice.gov/programs/social-innovation-fund/our-programs/pay-success
GAO PFS report:
http://www.gao.gov/assets/680/672363.pdf
Comments and Questions: We have provided below an email for you to provide information on PFS that you want to share, suggestions for new approaches for ED to consider, or for asking questions on PFS on which we might be helpful or on topics for which more guidance might be helpful. Please email us at pfs@ed.gov.