Senate Passes Hatch “Pay for Success” Amendment
Washington, D.C.—Senator Orrin Hatch, R-Utah, a member and former chairman of the Senate Health, Education, Labor and Pensions Committee, issued the following statement after the Senate passed his Pay for Success amendment:
“With Pay for Success, state and local leaders will be empowered to fund initiatives that deliver real results for their communities and schools. Rather than being limited by what federal bureaucrats at the Department of Education think best, funding should be more connected to local innovation and successful outcomes. I’m pleased the Senate has voted to approve my amendment, which builds on tremendous success leaders have already seen in my home state of Utah.”
Background
Pay for Success is a funding approach in which government pays for services if a program achieves results, allow student’s access to programs that actually work. Pay for Success helps drive funding toward high-quality, effective programs that measurably improve student outcomes. Specific interventions are not spelled out, allowing providers the flexibility to adopt whatever strategies they determine will be most effective. In some cases, private investment provides upfront financing, taking on the risk that the intervention won’t succeed and recovering the investment if it does.
How could Pay for Success improve the new early learning program in ESEA?
A simple amendment could allow states, if they choose, to utilize Pay for Success initiatives to carry out strategies determined by the state to improve the quality and coordination of a State or locally designed system of voluntary early learning and care services.
What are the benefits of Pay for Success?
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There are many ways Pay for Success could improve student outcomes, spur innovation, and increase the effectiveness and efficiency of federal funding.
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By focusing on results and creating incentives for cost-effective interventions, Pay for Success programs emphasize effective prevention strategies instead of remediation.
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High-impact service providers need greater and more reliable funding to expand successful programs that can measurably improve the lives of people in need. Pay for Success helps drive more resources to those programs and tracks their results over time.
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Pay for Success expands funding for high-quality programs that actually deliver results, which means more lives improved in communities nationwide.
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Taxpayers expect their money to be spent on programs that actually improve the lives of people in need. Pay for Success may tap private investments to fund the up-front costs of effective social programs without risking taxpayer dollars if the programs don’t deliver results.
What has Congress already done on Pay for Success?
In ESEA:
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The Every Child Achieves Act, as passed by the Senate HELP Committee, includes language that would make Pay for Success initiatives an allowable use of funds through Title I, Part D (Prevention and Intervention Programs for Children and Youth Who are Neglected, Delinquent, or At-Risk) and Title IV, which funds programs addressing student health and safety.
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On February 26, 2015, the House of Representatives approved a bipartisan amendment to H.R. 5, the Student Success Act, that would make Pay for Success initiatives an allowable use of state and local funds in Title II and in the Teacher and School Leader Flexible Grant, supporting states and school districts in improving student outcomes and saving resources by training and supporting educators.
In other areas:
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The bipartisan Workforce Innovation and Opportunity Act (WIOA) was signed into law on July 22, 2014. WIOA authorized states and local workforce investment boards to invest existing funds in Pay for Success projects. The FY13, FY14, and FY15 appropriations bills authorized select federal agencies to support Pay for Success projects, including the U.S. Department of Labor, the U.S. Department of Justice, and the Corporation for National and Community Service.
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The FY13, FY14, and FY15 appropriations bills authorized select federal agencies to support Pay for Success projects, including the U.S. Department of Labor, the U.S. Department of Justice, and the Corporation for National and Community Service.
