IN THE SENATE OF THE UNITED STATES
May 4, 2017
Mr. Bennet (for himself and Mr. Hatch) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions
To authorize pay-for-success projects designed to incentivize and reward successful efforts to increase postsecondary education retention and completion rates for low-income and first-generation students.
This Act may be cited as the
Pay for Student Success Act.
Authorization of pay-for-success projects
Part B of title VII of the Higher Education Act of 1965 (20 U.S.C. 1138 et seq.) is amended—
by redesignating section 745 as section 746; and
by inserting after section 744 the following:
In this section:
The term pay-for-success project refers to a performance-based contract under this section in which—
the eligible entity pursues innovative strategies for improving outcomes and conducts a rigorous evaluation of the results to determine effectiveness;
the Secretary and the eligible entity agree to target outcomes;
the Federal Government imposes minimal administrative requirements on the eligible entity to allow for maximum flexibility to improve efficiency and effectiveness; and
the eligible entry may receive additional funding under this section if the eligible entity achieves successful outcomes as demonstrated through a rigorous independent evaluation approved by the Director of the Institute of Education Sciences.
The term eligible entity means—
an institution of higher education;
a nonprofit organization;
a consortium composed of an institution of higher education and a nonprofit organization; or
an entity described in subparagraph (A), (B), or (C) in partnership with—
a local educational agency;
a State educational agency; or
a State department of higher education.
Pay-for-Success projects authorized
From the amounts appropriated under section 746, the Secretary shall enter into contracts with eligible entities for pay-for-success projects that develop, implement, evaluate, and promote innovative strategies for increasing the postsecondary education retention and completion rates of—
students who receive Federal Pell Grants; and
first-generation postsecondary students.
An eligible entity desiring a contract under this section shall submit to the Secretary an application at such time and in such form as the Secretary may require.
The application described in paragraph (1) shall include—
a description of the eligible entity's strategy for improving the retention and completion rate, at one or more institutions of higher education, for students who receive Federal Pell Grants or first-generation postsecondary students;
an identification of the target population for the pay-for-success project and of the target outcomes to be achieved;
an identification of the independent entity that will carry out a robust, rigorous evaluation approved by the Director of the Institute of Education Sciences to determine the effectiveness of the pay-for-success project, and a description of the methodology that the entity will use for this evaluation, including the timeline for completion; and
the total cost of the pay-for-success project and an assurance that the eligible entity will meet the funding requirement described in subsection (d), and an identification of the sources of the funding.
Each eligible entity receiving a contract under this section shall demonstrate that the eligible entity will provide for the project funds, in cash or through in-kind contributions, from non-Federal sources in an amount equal to 90 percent of the total cost of the pay-for-success project.
The Secretary shall provide a grant to each eligible entity receiving a contract under this section in an amount equal to 10 percent of the total cost of the pay-for-success project.
Additional funds available
If, upon completion of a pay-for-success project, the Secretary determines, based on the results of the evaluation described in subsection (c)(2)(C), that the pay-for-success project has demonstrated effectiveness in a cost-effective manner and has met the target outcomes described in subsection (c)(2)(B), the Secretary may use funds available under this part to provide additional funds to reimburse the eligible entity carrying out the pay-for-success project for not more than 75 percent of the total cost of the pay-for-success project identified in the application under subsection (c)(2)(D).
In making the determination under paragraph (1), the Secretary shall take into account the strength and ambition of the target outcomes described in subsection (c)(2)(B).
Dissemination of evidence-Based strategies
The Director of the Institute of Education Sciences shall broadly disseminate—
the evaluations conducted under the contracts under subsection (b), including the data collected through the evaluations;
successful and evidence-based strategies of eligible entities carrying out pay-for-success projects; and
information, including project design and evaluation, from such eligible entities regarding practices that were found to be ineffective and, to the extent practicable, an explanation of why.