Dive Brief:
- Temple University economics professor Douglas Webber has proposed colleges and universities should shoulder some of the responsibility for student debt, since they benefit directly from it — whether loans are repaid or not.
- Because colleges have financial incentive to enroll as many students as possible, Webber says, they do so without regard for how much students have to take out to afford tuition, and without regard for how they might repay them.
- Webber proposes a "risk-sharing" program that holds schools accountable for student outcomes. This would incentivize them to focus more on graduation through intrusive advising and other means, and to revisit curricula to encourage shorter time-to-degree.
Dive Insight:
While on the campaign trail, President Trump touted a belief that colleges should have some "skin in the game" on student debt, and, according to Webber, "risk-sharing" proposals have broad bipartisan support.
However, there has been much discussion of performance-based funding, which is the underlying principle of such a proposal. And while the idea is a good one, it does not account for institutional missions that lead schools to enroll large populations of students who face the greatest number of barriers to completion. At schools that serve high populations of low-income, first-generation and minority students, for example, overall graduation rates are significantly lower than those at large research institutions that admit significantly fewer of these students.
When adjusting for graduation rates with the same populations, however, those schools actually are more successful in graduating those students, but such policies might disincentivize accepting the more disadvantaged students to begin with, repeating the access issue cycle. And since many of these schools are already among the historically lowest-funded and most underresourced, taking away additional funds would mean they would have to cut additional supports to guarantee those students' success.