There’s a growing need for innovations in America’s higher education system, where federally funded institutions need regulatory flexibility to better serve vulnerable students so they complete their higher education, and to improve accountability for spending government funds, said U.S. Sens. Orrin Hatch (R-UT) and Todd Young (R-IN).
Toward meeting such goals, Sen. Hatch, chairman of the U.S. Senate Finance Committee, on July 26 introduced the bipartisan Fund for Innovation and Success in Higher Education Act, or the FINISH Act, S. 3294, with U.S. Sens. Michael Bennet (D-CO) and Young signing on as original cosponsors.
“This legislation encourages college access, retention and completion, and allows schools to choose what works best for them and their students,” said Sen. Hatch, the most senior Republican in the Senate. “The value of higher education cannot be emphasized enough.”
If enacted, S. 3294 would amend the Higher Education Act of 1965 to support innovative, evidence-based approaches that improve the effectiveness and efficiency of postsecondary education for all students, to allow pay for success initiatives, and to provide additional evaluation authority, among other purposes, according to the congressional record summary.
“Innovation partnerships and Pay-for-Success projects have the potential to expand opportunity for millions of students and significantly improve the quality of our colleges,” said Sen. Hatch, adding that S. 3294 “will help a new generation of students complete college and earn a degree.”
Pay for Success (PFS) is an approach to contracting that ties payment for service delivery to the achievement of measurable outcomes and addresses ongoing social problems, according to the Nonprofit Finance Fund, a 501(c)(3) and a Community Development Financial Institution that provides consulting, financing and partnership resources.
“In a PFS contract, the payor for outcomes – typically, but not exclusively, government – agrees to provide funding if and when the services delivered achieve a pre-agreed-upon result,” the organization says. “Typically, an independent evaluator determines whether the agreed-upon outcomes have been met.”
PFS contracting also has been used to scale up effective programs and interventions, as well as test new service-delivery models, the Nonprofit Finance Fund says.
“Since the payor is not committed to paying for services if they do not achieve the desired outcomes, PFS can be particularly attractive to governments as a way to realize greater accountability and efficiency by allocating resources to programs with demonstrable outcomes,” the organization says.
S. 3294 would authorize innovation grants “to improve outcomes for our students who need it most using the Pay-for-Success model,” said Sen. Young, who previously served as a U.S. Representative for Indiana from 2011 to 2017.
“Both in the House and Senate, I have been a strong champion for innovative solutions when seeking reforms to improve higher education,” said Sen. Young in a statement with the bill’s sponsors. “Postsecondary education needs to be catered to help our students succeed, and I’m glad to introduce bipartisan legislation that would deliver on that.”
Among numerous provisions in S. 3294, the bill would allow the U.S. Secretary of Education to approve up to five PFS pilot initiatives each fiscal year that would allow grant recipients to partner with outside organizations to achieve the goals of federally funded higher education grant programs, according to a summary provided by the lawmakers.
To receive federal grant funds under S. 3294, applicants would have to show concrete achievement of measurable outcomes, according to their summary.
“We must work diligently to create flexibility and promote innovation in colleges and universities, so they can better prepare and support students from all backgrounds,” Sen. Bennet said. “This legislation will bring us one step closer to ensuring more students can complete higher education and succeed in the 21st century economy.”
Support for S. 3294 has flowed in this week from numerous stakeholders across the nation.
“We enthusiastically support this bill. We are particularly thrilled that it prioritizes an innovative approach to solve some of higher education’s long standing challenges,” said Greg Johnson, CEO of the Bottom Line, a nonprofit that forges evidenced-based partnerships like Pay for Success with institutions of higher education.
Jim McCorkell, chief executive officer of College Possible, also supports the bill because he said it would reward nonprofits having a significant base of evidence. “The best and smartest way to invest government dollars is to focus on organizations with proven track records of achieving measurable results,” McCorkell said.
The bill also garnered support from Michele Jolin, CEO and co-founder of Results for America; Michele McLaughlin, president at the Knowledge Alliance; and 82 other individuals and local, state and national organizations.
“Despite the fact that a growing number of higher education institutions and their partners have developed an increasing number of evidence-based solutions, we must accelerate this progress more broadly across the country,” wrote the 82 supporters in a July 26 letter sent to the bill’s sponsors.
“We believe that strategic investments in innovation, evidence-based practices, and evaluations have the potential to help many more students access and succeed in higher education,” they wrote.
S. 3294 has been referred to the U.S. Senate Health, Education, Labor, and Pensions Committee for debate.