II 117th CONGRESS 1st Session S. 518 IN THE SENATE OF THE UNITED STATES March 2 (legislative day, March 1), 2021 Mr. Young (for himself, Mr. Bennet , and Mr. Scott of South Carolina ) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 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.

1. Short title This Act may be cited as the Fund for Innovation and Success in Higher Education Act or the FINISH Act . 2. Innovation grants Part B of title VII of the Higher Education Act of 1965 ( 20 U.S.C. 1138 et seq.) is amended— (1) by redesignating section 745 as section 746; and (2) by inserting after section 744 the following: 745. Innovation grants (a) Purposes The purposes of this section are to— (1) increase access to, retention in, and completion of postsecondary education opportunities for high-need students; (2) address the adverse impacts on postsecondary educational access and attainment for high-need students brought about as a result of the COVID–19 pandemic; (3) identify and support the most effective interventions to increase postsecondary degree attainment and career success of high-need students, particularly such students who are adversely impacted by the COVID–19 health pandemic; and (4) improve the efficiency of postsecondary education, including by reducing the percentage of students enrolling in postsecondary remediation and increasing the effectiveness of postsecondary remediation. (b) Definitions In this section: (1) Eligible entity The term eligible entity means any of the following: (A) A State educational agency. (B) A public or private nonprofit institution of higher education. (C) The Bureau of Indian Education. (D) A consortium of any of the entities described in subparagraphs (A) through (C). (E) A partnership between a State educational agency or public or private nonprofit institution of higher education and one or more of the following: (i) A nonprofit organization. (ii) An intermediary organization. (iii) A business. (iv) A sponsor of a program receiving assistance under the National and Community Service Act of 1990 ( 42 U.S.C. 12501 et seq.). (v) A local educational agency. (2) First generation college student The term first generation college student means— (A) an individual both of whose parents did not complete a baccalaureate degree; or (B) in the case of any individual who regularly resided with and received support from only one parent, an individual whose only such parent did not complete a baccalaureate degree. (3) High-need student The term high-need student — (A) means a postsecondary student who is at risk of educational failure or otherwise in need of special assistance and support; and (B) may include an adult learner, working student, part-time student, student from a low-income background, student of color, former foster youth, first generation college student, student with a disability, student who is deaf or blind or visually impaired, or student who is an English learner. (4) Intermediary organization The term intermediary organization means an entity— (A) with strong skills and a track record of success in— (i) identifying effective interventions to address State, regional, or local problems; (ii) managing high-quality subgrant processes; and (iii) providing technical assistance and support to subgrantees to ensure quality and improve outcomes; and (B) that utilizes an evidence-based decisionmaking strategy when selecting high-performing entities, on a competitive basis, to receive subgrants in order to validate and grow effective interventions. (c) Program authorized (1) In general From amounts made available to carry out this section, the Secretary shall award grants, on a competitive basis, to eligible entities to enable the eligible entities to create, develop, implement, replicate, or scale evidence-based and field-initiated innovations, including through pay for success initiatives (as defined in section 124(a)), in order to improve postsecondary access and completion or career success for high-need students. (2) Grants The grants awarded under this section shall implement and evaluate programs, interventions, and strategies that address the purposes described under subsection (a) and, to the extent practicable based on the strength of the applications, include— (A) early-phase grants to fund the development, implementation, and feasibility testing of a practice, program, or intervention that prior research suggests has promise, for the purpose of determining whether the practice, program, or innovation can successfully improve, for high-need students— (i) access to, retention in, and completion of a postsecondary program of study; or (ii) career success; (B) mid-phase grants to fund implementation and a rigorous evaluation of a practice, program, or intervention that has been successfully implemented under an early-phase grant described in subparagraph (A) or another effort meeting similar criteria, for the purpose of measuring (using existing administrative data where possible) the impact and cost-effectiveness of the practice, program, or intervention; or (C) expansion grants to fund implementation and a rigorous replication evaluation of a practice, program, or intervention that has been found to produce sizable, important impacts under a mid-phase grant described in subparagraph (B) or another effort meeting similar criteria, for the purposes of— (i) determining whether such impacts can be successfully reproduced and sustained over time; and (ii) identifying the conditions in which the practice, program, or initiative is most effective. (d) Application (1) In general An eligible entity desiring a grant under this section shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. (2) Contents An application submitted under paragraph (1) shall include— (A) a description of the high-need students that the eligible entity is proposing to serve through the grant; and (B) a description of the outcome measures, including explicit outcome measures for high-need students, that the eligible entity will use, in addition to the outcome measures described in subsection (f)(2)(A), to evaluate the success of the grant. (e) Priority In awarding grants under this section, the Secretary shall give priority to eligible entities that— (1) propose to serve the largest number of high-need students; or (2) serve a high proportion of students from one or more school districts with a school district locale code of 31, 32, 33, 41, 42, or 43, as determined by the Secretary using the school district locale codes in effect on December 1, 2019. (f) Evaluations Each recipient of a grant under this section shall conduct, and submit to the Secretary, a rigorous, independent evaluation of— (1) the effectiveness of the practice, program, or intervention carried out under such grant; (2) the outcomes achieved by such grant, which shall include— (A) the numbers and percentages, in the aggregate and disaggregated by each subgroup of students (as defined in section 1111(c)(2) of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 6311(c)(2) )), of— (i) students supported by the grant entering, persisting in, and completing postsecondary education; (ii) such students enrolling in remedial coursework at the institution; (iii) such students enrolling in and completing such remedial coursework; and (iv) such students enrolling in and completing such remedial coursework and successfully completing first-year credit-bearing coursework within 16 months of enrollment in an institution of higher education; and (B) the recipient's performance on any other outcome measures described in the application in accordance with subsection (d)(2)(B); and (3) the activities carried out under such grant. (g) Reports (1) In general Not later than 2 years after the date of enactment of the Fund for Innovation and Success in Higher Education Act , and every 2 years thereafter, the Secretary shall prepare and submit to the authorizing committees a report on the grants carried out under this section. (2) Contents Each report issued under this subsection shall— (A) include— (i) information from the outcomes reported in the evaluations submitted under subsection (f) for the reporting period about the success of the grants supported under this section; and (ii) the number of high-need students served through the grants under this section during the reporting period; (B) disaggregate all data on student outcomes related to the grants by, at a minimum, race and income, and, to the extent practicable, any other relevant student characteristic, as determined by the Secretary; and (C) consider— (i) how the tiered-evidence grant structure described in subsection (c)(2) can be applied to other grant programs authorized under this Act, in order to strengthen those programs; and (ii) how the evidence generated by the projects, programs, and interventions supported by grants under this section can inform how to carry out other grants authorized under this Act. (3) Public availability The Secretary shall make each report issued under this subsection available to the public through the website of the Department. . 3. Open educational resources Section 741(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1138(a) ) is amended— (1) in paragraph (12), by striking and after the semicolon; (2) in paragraph (13), by striking the period and inserting ; and ; and (3) by adding at the end the following: (14) making all forms of postsecondary instructional content widely available, which may include the use of open educational resources (defined, for purpose of this paragraph, as teaching, learning, or research resources that reside in the public domain or have been released under a copyright license that permits their free use, reuse, modification, and sharing with others). . 4. Pay for success initiatives Part B of title I of the Higher Education Act of 1965 ( 20 U.S.C. 1011 et seq.) is amended by adding at the end the following: 124. Pay for success initiatives (a) Definitions In this section: (1) Eligible entity The term eligible entity means a partnership between— (A) a private entity (which may include a private nonprofit entity); and (B) an institution of higher education, a Federal, State, or local public entity, or a Tribal entity. (2) Pay for success initiative (A) In general The term pay for success initiative means a performance-based grant, contract, or other agreement— (i) between an eligible entity and the Secretary or a grant recipient, as authorized under subsection (b)(1); (ii) in which— (I) a commitment is made to pay the eligible entity for improved outcomes, including meaningful output measures strongly correlated to outcomes, that result in increased public value or social benefit to students and the public sector, such as increased effectiveness in improving outcomes, direct cost savings or cost avoidance, or increased public revenue; and (II) the entity providing the funds under the grant, contract, or agreement imposes minimal administrative requirements to allow for maximum flexibility to achieve increased public value and social benefit; and (iii) that requires— (I) a study describing how the proposed intervention is based on evidence of effectiveness, which may be a study not exclusively developed for the specific grant, contract, or other agreement; (II) a rigorous, third-party evaluation that uses experimental or quasi-experimental design or other research methodologies that allow for the strongest possible causal inferences to determine whether the initiative has met its proposed outcomes; (III) an annual, publicly available report on the progress of the initiative; and (IV) that payments be made to the recipient of the grant, contract, or agreement only when agreed-upon outcomes are achieved, except as provided under paragraph (2) or (3) of subsection (b). (B) Exclusion The term pay for success initiative does not include any initiative that— (i) reduces the benefits to a student or the obligations of an entity under this Act, the Rehabilitation Act of 1973 ( 29 U.S.C. 701 et seq.), the Americans with Disabilities Act of 1990 ( 42 U.S.C. 12101 et seq.), the Individuals with Disabilities Education Act ( 20 U.S.C. 1400 et seq.), or any other law; or (ii) reduces services that an individual is entitled to receive under Federal, State, or local law. (b) Pay for success initiative authority (1) In general Notwithstanding any other provision of this Act and except as provided under subsection (c)— (A) any recipient of a grant under this Act may request to use grant funds to carry out a pay for success initiative that accomplishes the objectives of the grant and meets all requirements of the grant (except to the extent a requirement is specifically modified by the pay for success initiative), if such use is proposed in the application or plan submitted for such grant; and (B) the Secretary may approve not more than 5 pilot demonstrations each fiscal year from the grant applications or plans that contain a request to carry out a pay for success initiative. (2) Use of funds for feasibility studies and rigorous third-party evaluation If the Secretary, or a grant recipient, is authorized to carry out a pay for success initiative under paragraph (1), the Secretary or grant recipient may use funds available for the pay for success initiative— (A) to conduct the feasibility study required under subsection (a)(2)(A)(iii)(I) or the rigorous third-party evaluation required under subsection (a)(2)(A)(iii)(II); or (B) to provide funds to the entity carrying out the pay for success initiative for the costs of the initial costs associated with starting the initiative. (3) Use of remaining funds Notwithstanding any other provision of law, if the Secretary or a grant recipient is carrying out a pay for success initiative under paragraph (1) and the pay for success initiative has met or exceeded its proposed outcomes, the Secretary or grant recipient may use any funds remaining at the conclusion of the pay for success initiative to enter into an additional agreement, through a competitive process, with an eligible entity to expand capacity under the pay for success initiative or to carry out additional pilot demonstrations of pay for success initiatives. (c) Student protections (1) No negative impact on student aid A pay for success initiative shall not be supported with funds under this Act if the pay for success initiative would adversely affect the funding of, or student access to, individual student aid awards made under section 401 or any other program supported under this Act. (2) Noninclusion in determination of need A grant or aid provided directly to a student under a pay for success initiative supported with funds under this Act shall not be considered in determining that student’s need for grant, loan, or work assistance under title IV of this Act, except that in no case shall the total amount of student financial assistance awarded to a student through a pay for success initiative and under title IV exceed that student’s cost of attendance, as defined in section 472. (d) Availability of funds Notwithstanding any other provision of this Act, any funds made available for a fiscal year to an entity for a pay for success initiative authorized under this section shall remain available until expended. . 5. Evaluation Part B of title I of the Higher Education Act of 1965 ( 20 U.S.C. 1011 et seq.), as amended by section 4, is further amended by adding at the end the following: 125. Evaluation authority (a) Evaluation reservation (1) In general Notwithstanding any other provision of this Act, the Secretary, in consultation with the Director of the Institute of Education Sciences, may, for each fiscal year, reserve not more than 1 percent of the amount appropriated for each discretionary grant program authorized under this Act (except for the Federal Pell Grant program under section 401) in order to rigorously and independently evaluate the effectiveness and efficiency of the outcomes of all programs authorized under this Act. (2) Effect on other requirements The amount reserved under paragraph (1) shall be in addition to any other amounts reserved for evaluation under this Act. (b) Evaluation plan On a biennial basis, the Director of the Institute of Education Sciences shall develop, submit to the authorizing committees, and make publicly available on the website of the Department, an evaluation plan for the next 2 fiscal years that— (1) describes the specific activities that will be carried out under subsection (a) for the 2-year period applicable to the plan, and the timelines of such activities; (2) contains the results of the activities carried out under subsection (a) for the most recent 2-year period; and (3) describes how programs authorized under this Act will be regularly evaluated, including the outcome measures to be used to evaluate each program. (c) Pooling authority Notwithstanding any other provision of this Act, the Secretary, in consultation with the Director of the Institute of Education Sciences— (1) may consolidate the funds reserved under subsection (a) for purposes of carrying out the activities described in subsection (b); and (2) shall not be required to evaluate each program authorized under this Act each year. (d) Rule of construction Nothing in this section shall be construed to conflict with or supercede any other evaluation requirement for a specific program or activity authorized under this Act. .