In this episode of Work in Progress, David Socolow, executive director of the New Jersey Higher Education Student Assistance Authority and Tracy Palandjian, CEO and co-founder of Social Finance join me to discuss a new, first-of-its-kind state workforce development project which is financing training for family-sustaining careers.
The New Jersey Pay It Forward Program is a partnership between the state and the nonprofit to fund education for well-paying jobs in in-demand industries such as health care, cybersecurity, IT, skilled trades, and clean energy.
The unique financing structure offers zero-interest, no-fee loans to students who might not otherwise have the income, savings, or credit history to take out a loan to pay for the training.
The Pay It Forward fund that the state has established through Social Finance will be paying all the tuition and other fees for individuals who go through select credential, certificate, and degree programs..
The inaugural training programs and providers are registered nursing at Hudson County Community College, cybersecurity at New Jersey Institute of Technology, and heating, ventilation, and air conditioning (HVAC) and welding at Camden County College.
“This program is very much thinking about how we align the workforce development agenda with the (state’s) economic development agenda. Students enroll at no upfront cost. I love the phrase that (Governor Murphy) uses – ‘The living stipend and the wraparound support services are all on the house,’ meaning that it’s grant funded, it’s not going to be repaid,” explains Palandjian.
Socolow calls it a “terrific opportunity for us to get additional workforce training financed in a unique way. We are filling in funding gaps with this unique public-private partnership.” Socolow points out the program has co-investment from the eight companies in the New Jersey CEO Council.
“Those are some of the largest companies in New Jersey that have bought into this program and want to fund this opportunity for workers to get training for in-demand skills. And we have some state funding from the state budget,” he adds.
There are some other student-friendly economic terms. Borrowers don’t have to start paying back the loan until they get a job with a specific income level. After five years, the loan balance will be forgiven for borrowers in good standing. Additionally, all loan payments will be recycled back into the fund to ‘pay it forward’ for future students tapping into the training program.
“We are confident that the outcomes are going to be good and that this will in fact recycle. The money will come back to the fund, because the worker is going to get a great job and they’re going to repay an affordable percentage of their income back into the fund to train future workers, to ‘pay it forward,'” says Socolow.
Palandjian says, “We are able to design these generous terms because of the generosity of the state, frankly. But if you compare it to the status quo, I think David would be first to agree, that from the state’s financial perspective, any recyclability, even if it’s 50 cents on the dollar, 30 cents on the dollar, it’s still financially better than a straight out grant.”
You can listen to the full podcast here, or download and listen to it wherever you get your podcasts.
Read more about the New Jersey Pay It Forward Program here.
Episode 246: Tracy Palandjian, Social Finance CEO & co-founder and David Socolow, HESAA NJ Executive Director
Host & Executive Producer: Ramona Schindelheim, Editor-in-Chief, WorkingNation
Producer: Larry Buhl
Executive Producers: Joan Lynch and Melissa Panzer
Theme Music: Composed by Lee Rosevere and licensed under CC by 4.0
Download the transcript for this podcast here.
You can check out all the other podcasts at this link: Work in Progress podcasts