Career Impact Bond (CIB)

THE CAREER IMPACT BOND The Career Impact Bond (CIB) is a financing model that expands access to quality, industry-recognized career training to people who face barriers to education and employment such as low income, criminal justice involvement, and immigration status. The CIB is based on a student-centered income share agreement (ISA) that allows students to enroll in training with no upfront cost. It works like this: Impact investors provide catalytic capital to training providers to cover upfront training costs and critical support services for typically underserved students. Students enroll free of charge, persist and graduate. Those who gain meaningful employment repay program costs as a fixed percentage of their income, capped at a set dollar amount and for a certain period of time. And those who don’t obtain and maintain meaningful employment following graduation pay nothing. Impact investors and training providers share any payments received from students who find good jobs and achieve increased economic mobility. This aligns incentives and ensures all parties are focused on student success. Video: Social Finance’s Tracy Palandjian explains the CIB Video: The student perspective: Branden LaCour, CIB graduate and software engineer THE CHALLENGE There was already an urgent need to reimagine and rebuild pathways to economic mobility before the onset of the COVID-19 pandemic. Americans were taking immense risks to pursue postsecondary education opportunities that were no longer helping them reach the middle class. They were accumulating massive debt or leaving paying jobs to enter programs without guarantees of future career success or even employment. As a result of the coronavirus pandemic, the need for accessible career training and reskilling is greater than ever before. Positions in many industries are going away and might never return due to seismic shifts in the labor market. Millions more people are now unemployed or underemployed and in need of career-based training programs so they can animate their ambition and achieve economic mobility. While there are a growing number of accelerated training models that provide skillbuilding for in-demand occupations, these options often come with significant upfront costs. The CIB rebalances the risk equation by removing initial tuition fees and fairly distributing risk among training providers, impact investors, and students to expand access to quality training and career development opportunities in resilient fields like information technology (IT), nursing, and renewable energy that offer stable pathways to economic mobility. Designing for impact Social Finance structures impact-first, cost-effective, and fair CIBs that help participants to cultivate viable career paths. If students don’t find jobs with salaries above a set threshold, they don’t pay. Creating opportunity The CIB is a student-friendly income-share agreement (ISA) that unlocks access to quality, industry-recognized training for people who face barriers to education and employment. Leveraging the market Impact investors cover upfront program costs, which students repay as a fixed percentage of their income over a set period after getting good jobs. THE DIFFERENCE A typical income-share agreement (ISA) is just another financing option for students, just like a loan. The CIB is much more than that. It’s a holistic, career-based approach to job training meant to catalyze economic mobility at scale. CIBs break down barriers that prevent students from accessing quality job training programs — like ineligibility for private loans or scholarships for non-Title Four programs, poor credit history, justice system involvement, and immigration status — barriers that disproportionately affect people of color. CIBs include wraparound support services like benefits enrollment assistance and emergency aid funding to help students address real-life challenges, like childcare and transportation, so they can focus on their training. A Student Bill of Rights underpins every CIB, reflecting a strong commitment to transparency and learner safeguards. And a series of student-first repayment features, including payment caps, fixed repayment terms, and downside protection, reflect this commitment. We’re scaling this powerful education funding tool via the UP Fund, a $40 million pool of catalytic capital designed to support 8-12 CIBs. ACTIVE CAREER IMPACT BONDS General Assembly GENERAL ASSEMBLY CAREER IMPACT BOND Expanding access to careers in technology The General Assembly CIB expands access to the high-quality, industry-recognized job training offered as part of the Catalyst program to people with limited means or who have come into contact with the criminal justice system. LEARN MORE Acuitus ACUITUS CAREER IMPACT BOND Creating new pathways to IT career success The Acuitus CIB increases access to proven information technology training, helping civilians and veterans who face barriers to education and employment move into the workforce and land careers in a cutting-edge field. LEARN MORE RESOURCES Publications Contact Us If you are interested in learning more about partnering with Social Finance on a Career Impact Bond, contact Director Jake Edwards.