Chicago Will Use $17 Million in Social-Impact Bonds for Pre-K
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Chicago is expanding pre-kindergarten education by using social-impact bonds, a financing method that transfers risk to investors from taxpayers.
The third-most-populous U.S. city will use about $17 million in social-impact financing to provide pre-K programs to 2,620 children over the next four years, according to a statement on the city’s website. The model, also known as pay for success, is structured so that lenders, including Goldman Sachs Group Inc., are repaid only if students show “positive academic results,” the city said.