OPINION: How Pay-for-Success Funding Might Help Low-Income Students

Monday, October 6, 2014

Policy makers, college administrators, and parents are all searching for ways to help needy students graduate. They have offered a variety of solutions to accomplish this: freezing tuition, reducing student-loan interest, allowing graduates to refinance, increasing community-college enrollment, improving freshman advising, ranking colleges on the basis of graduation rates. But one option is missing from the debate: pay-for-success financing.

Under pay-for-success financing, which started in Britain in 2010, the government pays for outcomes that programs achieve rather than for the services themselves. Here is how it works:

Source: The Chronicle of Higher Education (link opens in a new window)

Categories
Education
Tags
education, financial innovation, poverty alleviation