The Hechinger Report recently wrote about some alarming data from the U.S. Department of Education’s College Scorecard that shows 3.9 million students dropped out of college with debt in 2015 and 2016.
As a result, these students are saddled with debt without the degree, or the career lift, that they sought. The results are quite sobering, and it compels all of us across higher education, including for-profit institutions like Strayer University, to be a part of the solution.
At the federal level, some members of Congress, as part of the next reauthorization of the half-century old Higher Education Act, are advocating a ‘risk-share’ financial aid model.
The new model would ensure that institutions have ‘skin in the game’ to increase student completion rates by shifting some of the costs to the institution when a student defaults on a loan.
Such an approach aligns the success of an institution with the success of its students. If a completion incentive model works for students, we see similar value in incentivizing institutions in ways that promote graduation and attainment.
In addition, state lawmakers are adapting outcomes-based funding models that allocate a portion of public funding for colleges and universities based on their students’ credit completion, rather than just enrollment growth. And research supported by the Lumina Foundation suggests states that have adopted such an approach have seen growth in on-time graduation, the number of overall graduates and the percentage of students seeking STEM-related degrees. (The Lumina Foundation is among the funders of The Hechinger Report.)
While our national discussion has reached relative consensus about the dual threat that tuition costs and student debt pose to college access, new approaches — at the policy and institutional level — remind us that creative solutions can drive meaningful improvement in post-secondary attainment.
At Strayer, we know that college costs and student debt are hurdles for access to education, and these same challenges threaten degree attainment and persistence of enrolled students. The need for new approaches to this challenge is made more acute by the changing composition of today’s college student population.
Consider that nearly 40 percent of undergraduates are older than 25. Forty-seven percent are funding their education without parental assistance, and 25 percent are raising children. But while their economic future is increasingly tied to their educational attainment, these students are struggling to navigate an outdated, inflexible higher education system.
Given that students who do not complete their degree are more likely to default on their loans, it’s no wonder that surveys show the cost of college and concern about debt loads are increasingly top of mind for students, particularly those from low- and moderate-income backgrounds.
Facing pressure to address this reality amid a competitive admissions environment, colleges and universities have increasingly resorted to offering students aggressive discounts on tuition.
While this practice may entice students to enroll, it does not solve the second half of the equation — encouraging year-over-year persistence and degree completion.
Rather than engaging in tuition discounting up-front, what if colleges offered compelling financial reasons for current students to continue and complete their studies? And what if policies created incentives for colleges and universities to make other changes that improve degree attainment and limit excessive debt and defaults? These are the questions policymakers and institutions are grappling with.
Many institutions are already thinking about how to encourage completion while addressing affordability.
For example, at Strayer University, we have adopted an approach that allows bachelor’s degree students to earn a class at no cost for every three classes they pass.
The earned classes are redeemed in the final terms of a student’s program, meaning that students with no transfer credits who persist through a full four-year bachelor’s degree program can potentially receive their final year of study at no cost.
Since it launched in 2013, the Strayer University Graduation Fund has awarded more than $30 million in tuition, as at least 6,500 students have redeemed Graduation Fund credits for more than 22,000 classes.
By unlocking additional tuition support based on a student’s progress to a degree, the model makes persistence its central priority. It also encourages students to do so consistently. If students skip more than two consecutive quarters, they forfeit the no-cost class credits, which further encourages consistency in course completion.
We have also paired the program with robust support services for at risk-students to further improve student success.
The results have been encouraging. Forty-five percent more Strayer University students continued with their studies from their first term into a second term since the Graduation Fund was first implemented.
Among our most at-risk students, first-to-second-year persistence has increased by 80 percent. And we know that students who continue steadily from the first to second term are much more likely to remain on a path to graduation.
With policies and financial aid programs that encourage persistence and completion, policymakers and educators can help ensure that investments in access ultimately lead to our real goal: degree completion and a more productive citizenry.
Brian W. Jones is the president of Strayer University.