Pearson is using a £350 million loan to support the company’s online and career-focused instructional programs.

The “social bond,” which equates to about $459 million, will help students who use Pearson’s virtual schools network in the U.S., students seeking vocational qualifications and training through Pearson, and individuals working to get their GED certificate.

“Through launching this bond, with a clear social element, we emphasize our commitment to ensuring learners around the world can gain access to high-quality education,” Pearson Chief Financial Officer Sally Johnson said in a statement.

“This is an important milestone for Pearson as we further strengthen our long-term liquidity and continue to build a more sustainable business that is focused on digital, lifelong learning.”

Education wasn’t a target for social investors until recently. In the past, major social investment targets have been areas like the environment, health, and developing countries, according to Andrea Mainelli, senior adviser for Tyton Partners.

Pearson’s bond differs from a traditional “pay-for-success” social impact bond, which requires companies incurring debt to reach certain educational benchmarks in order to receive funding, Mainelli said.

World Bank Senior Education Specialist Janssen Edelweiss Teixeira distinguished the social impact bond model from Pearson’s fundraising effort, which resembles a commercial-type bond.

In the social impact bond framework, “if previously agreed results are achieved, an outcome funder (usually a government) pays the upfront capital back to the investor together with a premium, a return,” Teixeira said in an e-mail. “If the results are not achieved, the investor loses its capital.”

Pearson’s bond appears to follow a socially responsible framework, notably because they have arranged a third-party audit to ensure funds are used effectively, Mainelli said.

Vigeo Eiris, a research and benchmarks firm affiliated with U.S. business and financial services company Moody’s, vetted Pearson’s bond and provided their “highest level of assurance” that the bond aligns with the International Capital Market Association’s social bond principles. Those principles guide how social bonds should be issued in terms of transparency, disclosure, and reporting, according to a Pearson press release.

Bidding for the bond drew over 150 potential investors who made bids totaling £2.85 billion, James Kelly, senior vice president-treasury for Pearson, said in an email.

Pearson held a two-day virtual “roadshow,” meeting more than 40 investors before publicly announcing the financing was open for bids, Kelly said.

Pearson has received funding from bond markets in the past, and has four existing bonds. But the £350 million amount is the first “social bond” that Pearson has issued.

The money will flow to Connections Academy, Pearson’s full-time virtual schools network serving over 76,000 U.S. students. It will also support BTEC, a service by Pearson that provides vocational qualifications, and to the GED Testing Service, a partnership between Pearson and the American Council on Education which helps learners who haven’t finished high school earn an equivalency certificate.

Pearson is also looking to grow the international user base for BTEC.

In a statement, Pearson said it is issuing funding to “areas of the business where we see particular social benefit,” and that bond recipients will comprise “underserved learners and communities,” including people from low-income backgrounds, with disabilities, and the unemployed.

The bond has a 3.75 percent interest rate, and a term of 10 years.

This post has been updated.

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