OPINION: Can ‘risk-share’ financial aid models reverse some ‘alarming data’ on student completion rates?
Strayer’s president on ‘skin in the game’ and an incentive program that’s working
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 Jill Barshay reported in Hechinger’s “Proof Points” column, a disproportionate share of these students attended for-profit institutions.
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.