Co-authored by Kyle Doran, a Director at Social Finance.

In any given state across the country, individuals trying to improve their own economic wellbeing face a complex workforce training and licensure system. Imagine Andy, a person who wants to become a licensed heating, ventilation and air-conditioning (HVAC) contractor, for example. Based on an average of the requirements across 35 states, in order to work as an HVAC contractor, he must first gain over 1,000 cumulative days of experience and training, pay almost $400 in fees and pass two exams. This is a busy time for Andy, and in part due to his participation in this HVAC training, his income is much lower than prior to the program. Without full-time employment and the wages that come with it, transportation, childcare and other expenses become even more of a hardship, and he’s faced with the difficult decision of weighing the cost of a training program and expenses for these core necessities against the ultimate benefit of a more promising career.

This story plays out every day across business sectors, occupations and states. The occupational licensure process often includes fees, exams, education prerequisites and other requirements that differ by state and can be obstacles to an individual obtaining a license. These barriers to licensure are particularly acute for those whose backgrounds do not obviously map to an educational prerequisite, for example, or those who lack funds to pay for up-front fees, including veterans, people with criminal records, low-wage earners, immigrants with work authorization and people with disabilities. As the number of occupations in the U.S. requiring a license increases, states are looking for ways to remove or mitigate barriers to licensure for individuals trying to enter a profession and practice in their state.

At the same time, issues can arise when workers attempt to make education and experience portable across state lines. Veterans and immigrants often have challenges translating to the U.S. their education and experience abroad. Both instances can lead to unemployment and underemployment as these individuals work to meet a different state’s licensure requirements.

The economic effects of COVID-19 have exacerbated these issues and placed a spotlight on the need for licensure portability, especially in fields like health care strained by the pandemic. In addition to expanding telehealth, digital licensing and interstate compacts, states also are looking to expand opportunities for meeting educational requirements or reskilling through expanding apprenticeships.

Apprenticeships are a well-established “earn while you learn” model that can alleviate the financial difficulties that arise from significant upfront costs in many training programs—costs like those incurred by Andy in the example above. Apprenticeships also can simultaneously fulfill education and experience requirements that are necessary for many licenses, making it a viable alternative pathway to licensure. And they have a strong track record: the U.S. Department of Labor found that 94% of those who complete an apprenticeship program maintain employment after the program ends, and participation in Registered Apprenticeships has grown 70% over the last 10 years. Expanding apprenticeship programs may help states meet licensure requirements while still accounting for the disproportionate barriers some individuals face.

The Career Impact Bond (CIB) is a student-friendly model for upskilling and training programs, supported by Social Finance’s $50 million UP Fund. Supported by philanthropically minded impact investors, in a CIB, students enroll in training programs with no upfront costs, only repaying those costs if they gain meaningful employment after the program. CIBs provide wraparound support for students ranging from career coaching and job placement assistance to emergency aid funds and support for housing, childcare and transportation. CIBs put student-centered design first: students who land a job over a predetermined income threshold repay the cost of training and their repayment is capped both in length of time and dollar amount. CIBs also offer “downside protection” such that if a student does not find a job above the income threshold, they do not pay.

Early feedback shows that CIBs can be a meaningful tool to increase access to training for low-wage earners, including people of color. In General Assembly’s Career Impact Bond, the percentage of Black students is four times that of their typical student body. Student participation in the American Diesel Training Centers program doubled after the it began using CIBs, with over 90% of graduates getting hired. While CIBs are a relatively new tool in the workforce training space, they hold real potential to help workers find and embark on new career paths. There is great promise for similar models that help individuals attain the licenses they need for economic mobility.

Several states have started to take an interest in the model, forming a new policy tool called Pay It Forward Funds (PIFF) to bring the mechanism to more students. PIFFs are state-sponsored initiatives that leverage public funding (like federal stimulus dollars) to support CIBs, which may recycle student repayments back into the fund to support future cohorts of students. New Jersey was the first state to announce the development of a PIFF in 2020, and at least six other states are pursuing similar efforts. Read more about CIBs, PIFFs and many other models of cross-sector partnerships in Workforce Realigned: How New Partnerships Are Advancing Economic Mobility, a recent book from Social Finance and the Federal Reserve Banks of Atlanta and Philadelphia.

Apprenticeships, CIBs and PIFFs are promising tools that can help people overcome barriers to licensure. By sharpening their focus on innovative approaches to workforce training, states can help individuals like Andy earn licensure and improve their economic mobility while helping industries attract and train the workers they need.

This policy brief is a collaboration between CSG & Social Finance, a national impact finance and advisory nonprofit. Learn more at

This workforce product was funded by a grant awarded by the U.S. Department of Labor’s Employment and Training Administration. The product was created by the recipient and does not necessarily reflect the official position of the U.S. Department of Labor. The Department of Labor makes no guarantees, warranties, or assurances of any kind, express or implied, with respect to such information, including any information on linked sites and including, but not limited to, accuracy of the information or its completeness, timeliness, usefulness, adequacy, continued availability, or ownership. This product is copyrighted by The Council of State Governments.

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