Dive Brief:
- A shortage of 3 million people with college degrees needed to fill jobs — expected to jump to 16 million in the next eight years — has led to a crisis of sorts, with states and institutions trying to figure out how to close the gap.
- A recent Fast Company article points out that the nearly 50% dropout rate in higher ed is caused not by ability, but by economic factors. Despite financial aid, many college seniors end up dropping out of school over an inability to pay various fees, which often amount to less than $1,000.
- The article's author suggests that by forgiving small debts which bar students from obtaining degrees, higher ed can boost graduation rates and help close a $2.3 trillion GDP gap caused by having underqualified workers.
Dive Insight:
While it may seem unfathomable to institutions to forgive $1,000 debts for multiple students each year, administrators should weigh the long-term cost of federal state sanctions over dismal graduation rates. While a $50,000 forgiveness debt could seem like a lot, it pales compared to millions in dollars of funding which could be withheld from an institution which failed to meet targets.
This is why there's a 24:1 disparity between well-off and low-income students at the most selective colleges: leaders are aware of the risks associated with admitting even high-achieving low-income students to campus, and in the absence of established funds to take care of those small-debt barriers for these students, the obvious answer is to not admit them. By the same principle, this is why historically black and other minority-serving institutions often face lower graduation rates: because they enroll a disproportionate amount of these students.
However, for the majority of students who are entering the higher ed pipeline, this is the new reality. And while the most selective institutions can afford to simply not enroll these students, other institutions already fighting for a survivable share of the pie must do more to enroll and support these students for the sake of the institution's own viability. There is something to be gleaned from historically black and minority-serving institutions which, despite often lower overall graduation numbers, often have higher graduation rates among this population than other institutions.
And, since these institutions are often working with fewer state and federal resources and lower endowments and alumni giving, there is hope for the rest of the industry that solutions to better support these students don't always come with a heavy price tag. Instead, a more personal approach and a true emphasis on the idea of student success, rather than the survival of the fittest mentality prevalent on many campuses, shows a measurable impact on student persistence. There does, however, have to be some financial commitment by way of scholarships to help bring these students to campus and funds to cover small costs for students who would otherwise be graduating but can't afford the fees.