Income Share Agreements to Finance Short-Term Career Training. Preliminary Findings from the Career Impact Bond Study

Postsecondary education and middle-skills occupational training are viewed as important paths to higher-paying jobs and careers. Lifelong learning pathways geared toward working learners aged 25 and older also seem essential for career advancement and professional growth in the current job market. However, many learners face financial and other barriers to accessing and completing occupational training. Social Finance, Inc., a national nonprofit that creates impact-first investments, launched the UP Fund, a $50 million fund that aims to improve economic mobility by expanding access to job training programs to underserved learners and learners from low-income backgrounds. The UP Fund enables learners to enroll in short-term, sector-based occupational training programs with access to career and supportive services without paying up-front tuition costs. Learners enter into "income share agreements" (ISAs) that are intended to repay tuition costs. This is achieved by learners committing to repay a fixed percentage or amount of their income over a set term and up to a capped amount. However, this repayment obligation is contingent upon the learner's earnings meeting a minimum income threshold. The UP Fund's Career Impact Bond (CIB) model focuses on providing ISAs to learners from low-income backgrounds who might not otherwise have access to the training programs. The CIB model also emphasizes the importance of comprehensive support services to help learners achieve career success. MDRC launched a multisite, multiyear study of the UP Fund's CIB model in 2022. The study includes four training providers that enroll learners financed by the UP Fund across multiple industries. This brief provides an overview of the study, details of the UP Fund's CIB model, and early implementation findings. Initial results suggest that individuals who enrolled in a training program supported by the UP Fund learned helpful skills to find jobs in their chosen careers.