How colleges are answering the call for more risk sharing
- Guaranteed jobs programs, in which colleges agree to provide support to students who fail to land a job in their field of study within a year of graduating, or who fail to make a livable income within that time, are growing in popularity, according to The Hetchinger Report. Such guarantees — usually the institution pays some of the graduates' federal loans, or offers free masters-level courses to help them get an advanced degree — are attractive to students worried about the high costs and risks associated with seeking a college education.
- A bachelor’s degree is often sold as a sure path to a well-paying job, but that is not always the case, Jon Marcus, higher education editor for The Hechinger Report, said in the piece. Nearly half of those who attend college don’t graduate within six years, even though they take out loans expecting to earn degrees — and there’s no real way to hold institutions accountable, he argued.
- In the report, Marcus pinpointed a bipartisan push by U.S. policymakers to hold colleges and universities more responsible for students who default on their college debt. Some higher education lobbyists, however, argue that institutions would simply transfer the costs onto other students. Plus, they say, colleges could be more selective about accepting high-risk students.
The calls are growing to hold colleges financially accountable for student loan defaults among lawmakers from both political parties, but some institutions are addressing the issue without federal government involvement. Two private schools in Michigan, for example, guarantee students will get jobs at certain annual incomes after graduation, according to The Hetchinger Report.
Davenport University will provide additional education for free to any graduate who meets certain requirements who has not landed a job six months after graduation, and administrators said all eligible students so far have found jobs. Adrian College will help repay student loans until graduates land a “well-paying job,” officials said.
Meanwhile, St. Norbert College, a small private college in De Pere, Wisconsin, has had a four-year graduation guarantee for nearly a decade. St. Norbert students who meet specific requirements but fail to graduate in four years can complete needed courses at no cost.
The liberal arts college has an impressive 69% four-year graduation rate, nearly double the four-year rate of 36% for students attending private and larger public schools nationwide, according to the institution's website. And nearly 14% of St. Norbert students graduate in 3.5 years. The institution keeps class sizes small to help accommodate the guarantee.
Administrators throughout the U.S. are considering such programs, as legislative calls for action seem likely to grow. While seeking ways to take on some of the risk born by students or the federal government, colleges and universities also don't want to slam the door on applicants they consider too great a financial gamble.
- The Hechinger Report A college degree, or your money back