The employment market has changed significantly in recent decades. It’s time for the postsecondary education funding options to catch up and diversify. 

That’s the message that Third Sector, a nonprofit seeking to transform public systems to advance equity and improved outcomes, wants policymakers across the United States to embrace and translate into policy. 

College is increasingly unaffordable for most Americans, but that’s only part of the problem in postsecondary education. The federal loan system meant to address affordability often leaves students with crushing debt and no clear path to a fulfilling career and good employment outcomes. Furthermore, today’s workers must continuously learn to maintain and broaden their skills and aptitudes to navigate employment opportunities in a dynamic technology- and innovation-driven society. 

To meet these challenges, a simpler and more innovative marketplace of postsecondary education finance options is a necessary alternative to the federal student loan system. This will enable workers to pursue meaningful careers and empower them to contribute to society.

Third Sector proposes a clear, streamlined approach to postsecondary financing. First introduced at the National Conference of State Legislatures 2024 Legislative Summit in Louisville earlier this year, the six principles of this framework are meant to inspire policymakers and innovative finance providers as they work to make today’s dynamic postsecondary education marketplace more accessible to all learners. 

“Policymakers are creating and implementing policies that matter to the constituents in their communities,” said Caroline Whistler, CEO of Third Sector. “And yet, our postsecondary financing system as it is currently structured is not getting ideal outcomes.” 

She further added, “We have an opportunity to simplify rather than add as we think of how to do more and how to do better. We have an opportunity to create a reality in which everyone, no matter their race, background or circumstance, can pursue the education and learning they want without the fear of debt — where ongoing learning and training is a choice for everyone.”

A SIMPLE framework for funding 21st century postsecondary education and workforce development

Across society, there is growing openness to rethinking what it means to be work-ready or work-capable; the movement around dropping unnecessary degree requirements for state jobs is just one example. Third Sector sees postsecondary education funding as the next area ripe for reform. And it wants to make it simple for policymakers and innovators to seize the moment. 

The new report, “Envisioning a Simpler Future for Funding Lifelong Learning in a Modern World,” offers recommendations for simplifying and streamlining the postsecondary education financing system. The aim is to provide clarity and simplicity for learners, workers, employers, and policymakers focused on ensuring postsecondary education opportunities are accessible to everyone. 

The Third Sector framework is so straightforward that the first letter of each principle spells its name: SIMPLE.

There are already innovative finance models that reflect the principles in this framework, but they can often be siloed and difficult to access in today’s overly complex funding system. In its report, Third Sector highlights three models that focus on ease of accessibility for learners: 

• Individual Development Accounts: A matched savings account designed to help low-income individuals build assets for specific purposes, including education. Matching funds are provided through a combination of state governments, foundations, and the private sector (previously, these accounts leveraged federal funding as well). 
• Earn to Learn: A matched savings scholarship program launched in Arizona by the nonprofit Earn to Learn, in which individuals set aside up to $500 per year and qualify to receive an 8:1 match of up to $4,000 per year. Funds may be spent on living expenses in addition to tuition, fees, and materials, helping students overcome a key barrier to postsecondary education.
• Skill Savings Accounts: Portable and flexible worker-centered savings accounts that could receive contributions from employers, workers, family and friends, government agencies, tax authorities, and community investment organizations. As imagined, accessing funds in an SSA would be as easy as using a debit card to purchase a wide variety of quality upskilling and reskilling opportunities, which can thenbe documented and verified in a digital wallet like a learning and employment record. 

“The postsecondary education funding system was built up over time, fluctuating with trends in policy and program needs, as it should,” explained Dr. Joy Coates, managing director of post-secondary opportunity at Third Sector.

 “However, it is not working as a cohesive ecosystem to drive toward specific outcomes for learners. If we’re to have a truly robust and equitable economy that thrives in the 21st century and provides the kinds of jobs that enable true economic mobility for families, then simplifying our postsecondary financing is one of the most important steps we must take.”

Some people have looked to canceling student loan debt as an immediate solution, but it does not address access or affordability — nor does it ensure better employment outcomes for students. The more impactful opportunity ahead is streamlining postsecondary education financing altogether. Designing solutions around the SIMPLE framework allows for a more adaptable postsecondary education financing ecosystem now and in the future.

 “Government postsecondary education funding is a one-size-fits-all model designed to encourage college-going, but the future of work is anything but college-centric. Today’s learners want access to options beyond degrees and they need the finance tools to make that possible,” says Dr. Steven Taylor, director and senior fellow for postsecondary education and the future of work at Stand Together Trust.

 “What if learners shopped for education and training with their education dollars like consumers shop for health care goods and services using their Flexible Spending Account funds? Learners would have access to a vast marketplace of options and total agency over where and how they spend their education funding. It would be game-changing. This is the sort of transformation we need in postsecondary education to empower every person to reach their full potential.”  

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Third Sector is supported by Stand Together Trust, which provides funding and strategic capabilities to innovators, scholars, and social entrepreneurs to develop new and better ways to tackle America’s biggest problems.

Learn more about Stand Together’s efforts to transform the future of work and explore ways you can partner with us