In our ever-evolving economy, workers cannot advance without continually gaining new skills, but many can’t get the education and training they need without incurring insurmountable debt. Tinkering around the margins of our existing systems isn’t enough. We must design and scale solutions that are commensurate with the nature and scope of the challenge.

It’s time to reimagine the way postsecondary education and training are financed to help everyone build the skills they need to thrive in an increasingly dynamic world of work.

JFF is leading these critical conversations through the Financing the Future initiative, which I’m thrilled to join as director. We are engaging educators, policymakers, private-sector financiers, and learners themselves to study innovative approaches and spur the development of new ideas. It’s an important undertaking.

Recognizing that there are no silver bullets, we will consider an array of options, including income share agreements, merit based lending, social impact bonds, and individual training accounts. We’ll also explore new ways for employers to invest in their workers, new approaches to federal aid, and other strategies.

Current Models Inflexible

The cost of postsecondary education and training is a significant barrier for people who want to remain competitive in today’s labor market and prepare for the future of work. Existing financing options are built for traditional degree-granting programs, while today’s learners increasingly need flexible short-term training programs, especially workers displaced by the COVID-19 pandemic and adults who are juggling jobs, school, and family obligations.

Moreover, existing options aren’t accessible to many low-income individuals and people of color. For example, compared with their white peers, Black students are more likely to need loans to pay for school, and they’re nearly five times as likely to default on their loans.

While roughly half of all workers receive training from their employers, a recent MIT study found that employer-provided training is more likely to benefit workers who are already highly educated than employees with lower levels of educational attainment. And white workers are more likely to receive training from employers than African American, Hispanic, and Asian workers.

Solutions on the Horizon

Despite those headwinds, I’m optimistic that the radically new methods of learning and organizing education that have begun to emerge in the past decade will offer effective ways to deliver the skills people need to advance their careers. And through Financing the Future, we aim to identify and develop new financing structures that will make those skill development opportunities accessible to workers of all income backgrounds.

We will take a three-pronged approach to our work:

1. Inform. We will elevate research and knowledge on innovative approaches to financing education and training, tracking their evolution and performance and highlighting student experiences.
2. Guide. We will work with schools, nonprofits, philanthropic organizations, employers, investors, and policymakers to explore new approaches to financing education and training and steer investment toward promising models. We’ll also promote design principles and best practices, and advocate for policy frameworks and guardrails where necessary to ensure that we meet student needs and don’t introduce new problems.
3. Cultivate. We will build an ecosystem that fosters experimentation and emphasizes consumer protection through outcome-data transparency, credential frameworks, expanded career navigation services, and other complementary policies.

The country urgently needs effective new financing options that enable workers and learners experiencing economic insecurity to pay for high-quality education and training and gain access to new opportunities for economic advancement. We invite students, educators, policymakers, investors, and others interested in this initiative to join us.

Want to learn more about Financing the Future? Contact Ethan Pollack, director, at epollack@jff.org.