Four Communities Selected to Receive Training and Technical Assistance in Third Sector’s PFS in Higher Education National Cohort

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Third Sector announced its new PFS in Higher Education national cohort today with the selection of four communities that will receive training and technical assistance in using Pay for Success to fund student access and success programs. Supported by a grant from the Kresge Foundation, Third Sector will help these communities explore leveraging innovative financing as a way to fund wraparound support services to improve matriculation, persistence, and graduation outcomes for underserved students.

The four partner sites in the national cohort are:

“We are excited to help states think through how Pay for Success can be leveraged in higher education and support improved student outcomes,” said Third Sector CEO and Co-Founder Caroline Whistler. “These four sites are committed to ensuring that student outcomes are the primary focus of our work together.”

In the last ten years, the cost of postsecondary education has increased by 35% while the availability of public funding for state institutions of higher education has declined. Research shows that college-intending low-income, first-generation, students of color disproportionately experience poorer matriculation, persistence, and graduation outcomes in their path to and through college. These students would benefit from additional wraparound student support services to navigate the system and overcome barriers in order to access and succeed in college. While the evidence base of these services continues to grow, funding is often unsustainable.

The cohort sites will workshop PFS readiness and build toward pilot projects by engaging and co-creating in Third Sector’s training and technical assistance services. Third Sector will lead teams through a series of workshops, exercises, and convenings as a way to better connect resources and impact for underserved student populations. As part of this work, cohort members will collaborate with college access and success service providers as well as national and local funders. The tools and resources developed during this project will prepare sites to potentially apply for funding available through the Fund for Innovation and Success in Higher Education (FINISH) Act. The FINISH Act is a bill to 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, to provide additional evaluation authority, and for other purposes.

“Third Sector is breaking new ground by bringing the best thinking about Pay for Success financing to higher education to drive better outcomes for students of color, students from low-income households, and others who are currently under-served on college campuses,” said Bethany Miller, program officer with the Kresge Foundation’s Education Program.  “With critical guidance from Third Sector, this national cohort of higher education systems and institutions is well-poised to reimagine contracting and partnerships with college access and success nonprofits. The Kresge Foundation is proud to support this work.”

Support from the Kresge Foundation will expand Third Sector’s work in developing scalable PFS projects in a learning community environment across the country. “We are thrilled to apply our cohort approach in higher education. It is a unique experience to build toward demonstration projects that can be scaled while sharing common lessons learned,” said Third Sector CEO and Co-Founder Caroline Whistler.

PFS is a specific form of outcomes contracting where an entity (often a government) agrees to pay for outcomes achieved (rather than on a fee for service basis). PFS projects are best-suited for programs that serve a clearly defined population, aim to improve specific outcomes, are resourced with the support and data necessary to prove success, and have been rigorously evaluated for effectiveness. In PFS projects, third party funding is often used to bridge the timing gap between government payments and the upfront capital needed to implement the program.

The four participating states and public systems of higher education were selected through a competitive application process. Of the four communities selected for Third Sector’s national cohort, each participant represents a large public system of higher education, has committed leadership engaging in the training and technical assistance designed to explore PFS and build toward pilot projects, and is dedicated to holding equity and student outcomes at the center of the project.