Topic: Pay For Success

The discussion details how the "impact investment economy" and the AI economy function as two sides of the same coin within the education sector. Under the Every Student Succeeds Act, "pay for success" provisions allow private companies to fund education outcomes and receive government repayment or profit if targets are met. This system relies on AI to provide the scalable, real-time data necessary to track student progress and monetize outcomes through securities.

The discussion covers the shift toward "micro-credentialing" and digital badges as a replacement for traditional degrees. These credentials allow for "impact investing" and "pay for success" programs where private investors fund specific career pathways for students. Klyzik notes that organizations like the NEA and IBM are already issuing these badges to condition students for specific corporate roles.

Pay for success finance applies the structured debt techniques seen in the 2008 housing market crash to human beings. Just as mortgages were bundled and sold, human capital is now being turned into financial products. Large entities like Blackstone have already consolidated housing, setting the stage for leveraging stagnant wages and the gig economy into new debt markets.