II 

115TH CONGRESS 

1ST SESSION S. 1043 

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. 

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 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Pay for Student Suc5 cess Act’’. 

6 SEC. 2. AUTHORIZATION OF PAY-FOR-SUCCESS PROJECTS. 

7 Part B of title VII of the Higher Education Act of 

8 1965 (20 U.S.C. 1138 et seq.) is amended— 


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1 (1) by redesignating section 745 as section 746; 

2 and 

3 (2) by inserting after section 744 the following: 

4 ‘‘SEC. 745. PAY-FOR-SUCCESS PROJECTS. 

5 ‘‘(a) DEFINITIONS.—In this section: 

6 ‘‘(1) PAY-FOR-SUCCESS PROJECT.—The term 

7 ‘pay-for-success project’ refers to a performance8 based contract under this section in which— 

9 ‘‘(A) the eligible entity pursues innovative 

10 strategies for improving outcomes and conducts 

11 a rigorous evaluation of the results to determine 

12 effectiveness; 

13 ‘‘(B) the Secretary and the eligible entity 

14 agree to target outcomes; 

15 ‘‘(C) the Federal Government imposes 

16 minimal administrative requirements on the eli17 gible entity to allow for maximum flexibility to 

18 improve efficiency and effectiveness; and 

19 ‘‘(D) the eligible entry may receive addi20 tional funding under this section if the eligible 

21 entity achieves successful outcomes as dem22 onstrated through a rigorous independent eval23 uation approved by the Director of the Institute 

24 of Education Sciences. 


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1 ‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible en2 tity’ means— 

3 ‘‘(A) an institution of higher education; 

4 ‘‘(B) a nonprofit organization; 

5 ‘‘(C) a consortium composed of an institu6 tion of higher education and a nonprofit organi7 zation; or 

8 ‘‘(D) an entity described in subparagraph 

9 (A), (B), or (C) in partnership with— 

10 ‘‘(i) a local educational agency; 

11 ‘‘(ii) a business; 

12 ‘‘(iii) a State educational agency; or 

13 ‘‘(iv) a State department of higher 

14 education. 

15 ‘‘(b) PAY-FOR-SUCCESS PROJECTS AUTHORIZED.— 

16 From the amounts appropriated under section 746, the 

17 Secretary shall enter into contracts with eligible entities 

18 for pay-for-success projects that develop, implement, 

19 evaluate, and promote innovative strategies for increasing 

20 the postsecondary education retention and completion 

21 rates of— 

22 ‘‘(1) students who receive Federal Pell Grants; 

23 and 

24 ‘‘(2) first-generation postsecondary students. 

25 ‘‘(c) APPLICATION.— 


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1 ‘‘(1) IN GENERAL.—An eligible entity desiring a 

2 contract under this section shall submit to the Sec3 retary an application at such time and in such form 

4 as the Secretary may require. 

5 ‘‘(2) CONTENTS.—The application described in 

6 paragraph (1) shall include— 

7 ‘‘(A) a description of the eligible entity’s 

8 strategy for improving the retention and com9 pletion rate, at one or more institutions of high10 er education, for students who receive Federal 

11 Pell Grants or first-generation postsecondary 

12 students; 

13 ‘‘(B) an identification of the target popu14 lation for the pay-for-success project and of the 

15 target outcomes to be achieved; 

16 ‘‘(C) an identification of the independent 

17 entity that will carry out a robust, rigorous 

18 evaluation approved by the Director of the In19 stitute of Education Sciences to determine the 

20 effectiveness of the pay-for-success project, and 

21 a description of the methodology that the entity 

22 will use for this evaluation, including the 

23 timeline for completion; and 

24 ‘‘(D) the total cost of the pay-for-success 

25 project and an assurance that the eligible entity 


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1 will meet the funding requirement described in 

2 subsection (d), and an identification of the 

3 sources of the funding. 

4 ‘‘(d) PROJECT FUNDING.— 

5 ‘‘(1) IN GENERAL.—Each eligible entity receiv6 ing a contract under this section shall demonstrate 

7 that the eligible entity will provide for the project 

8 funds, in cash or through in-kind contributions, 

9 from non-Federal sources in an amount equal to 90 

10 percent of the total cost of the pay-for-success 

11 project. 

12 ‘‘(2) FEDERAL SUPPORT.—The Secretary shall 

13 provide a grant to each eligible entity receiving a 

14 contract under this section in an amount equal to 10 

15 percent of the total cost of the pay-for-success 

16 project. 

17 ‘‘(e) PAY-FOR-SUCCESS PAYMENTS.— 

18 ‘‘(1) ADDITIONAL FUNDS AVAILABLE.—If, upon 

19 completion of a pay-for-success project, the Sec20 retary determines, based on the results of the eval21 uation described in subsection (c)(2)(C), that the 

22 pay-for-success project has demonstrated effective23 ness in a cost-effective manner and has met the tar24 get outcomes described in subsection (c)(2)(B), the 

25 Secretary may use funds available under this part to 


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1 provide additional funds to reimburse the eligible en2 tity carrying out the pay-for-success project for not 

3 more than 75 percent of the total cost of the pay4 for-success project identified in the application under 

5 subsection (c)(2)(D). 

6 ‘‘(2) CONSIDERATIONS.—In making the deter7 mination under paragraph (1), the Secretary shall 

8 take into account the strength and ambition of the 

9 target outcomes described in subsection (c)(2)(B). 

10 ‘‘(f) DISSEMINATION OF EVIDENCE-BASED STRATE11 GIES.—The Director of the Institute of Education 

12 Sciences shall broadly disseminate— 

13 ‘‘(1) the evaluations conducted under the con14 tracts under subsection (b), including the data col15 lected through the evaluations; 

16 ‘‘(2) successful and evidence-based strategies of 

17 eligible entities carrying out pay-for-success projects; 

18 and 

19 ‘‘(3) information, including project design and 

20 evaluation, from such eligible entities regarding 

21 practices that were found to be ineffective and, to 

22 the extent practicable, an explanation of why.’’. 

Æ 


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