Skills training offers a promising route to higher-paying jobs and career growth, especially in industries with a demand for skilled workers, such as healthcare, information technology, and advanced manufacturing. However, individuals with low incomes may find it difficult to gain access to skills training programs due to financial barriers, the limited availability of free training programs, and the lack of financial aid options for many workforce development programs. To help address these challenges, Social Finance, a national nonprofit organization that designs workforce and education investments, launched the UP Fund in 2020. The UP Fund created a pilot program of the Career Impact Bond (CIB) model, which provides funding for individuals to enroll in sector-focused skills training programs with access to career and support services. The model allows individuals to finance their tuition without having to pay up-front costs.

With support from Strada Education Foundation, MDRC studied early iterations of the UP Fund’s CIB model at four training providers that used income share agreements (ISAs) as the central financing mechanism. Under the terms of an ISA, learners commit to paying a fixed percentage or amount of their future income over a set term and up to a capped amount. Learners only make payments toward their ISAs when they have earnings above a predetermined minimum income threshold. This report presents the final findings from the CIB study, which included an implementation study and an outcome study, and is among the first to provide evidence on the use of ISAs. The findings include the following:

• The CIB model demonstrates the potential for expanding access to short-term occupational training programs for individuals from low-income backgrounds who would not have been able to afford the programs otherwise.
   
• Learners’ satisfaction with the training experience varied by provider, with many appreciating the skills they learned, but also requesting more job placement support.
   
• Learners generally found the ISAs to be less risky than traditional loans and appreciated some of the terms of the ISAs, but many learners also reported difficulty understanding or remembering the terms after they graduated.
   
• Only about half of the learners in the ISA repayment phase were up to date on reporting their earnings to the ISA servicers, and less than half were current on their required ISA payments.
   
• Available data indicate varied employment outcomes: while some learners secured jobs in their target industries and increased their incomes, others faced challenges finding employment or earning above the minimum income threshold.
   
• The study found some significant disparities in outcomes among different groups of learners. These differences were associated with characteristics such as age, race and ethnicity, and education level.

The CIB study is one of the first to demonstrate the potential of ISAs to improve access to short-term skills training for individuals from low-income backgrounds. While learners valued the ISA repayment arrangements, the study revealed a need for simpler terms, clearer communication, and better job placement support, as well as the importance of having servicers with the ability to address concerns and improve reporting and repayment processes. Future research should explore whether enhancing supports or adjusting the CIB model could address the challenges faced by specific learner subgroups.