By: Michael Hansen, Chief Executive Officer, Cengage
President Biden and Congress's debate over securing a significant student loan forgiveness package is certainly a step in the right direction to help students climb out of debt they’ve incurred from participating in our education system. While this news is welcome (and much needed) relief for millions of indebted former students, it unfortunately does not address the root causes that got us in this $1.7 trillion student loan hole in the first place.
What ails the system is that high schools are not preparing enough students who are ready to master college, and colleges are not preparing students with the right skills for the 21st century workplace.
Today, the average student takes on over $30,000 in debt to get a bachelor’s degree from a four-year college or university. When they graduate from these programs, 43% are underemployed and are more likely to remain underemployed for the next 10 years. Believe it or not, these are the ‘lucky ones.’ What about students who don’t make it to graduation? Only 60% of college students graduate within six years of starting, and those additional years mean students are incurring even more debt. This number could easily fall lower as the most recent report from the Community College Research Center tells us that more than 40% of households report that a prospective student plans to drop out. Couple this with the 3.6% decline in undergraduate enrollment and the future for these Americans is in peril.
The problem, emphasized and accelerated by COVID-19, is rooted in students’ lack of college and career readiness. Without remedy, more and more Americans will face financial hardship and miss out on the reward of meaningful work. It will deepen the country’s socioeconomic divide and make the prospect of a ‘more perfect Union’ very remote.
The solution needs to be pragmatic and scaled to millions of students within one to two years. It should hold higher education institutions accountable by distributing federal funding for student ROI and shift the employer mindset away from traditional degree requirements.
Of course, the obvious solution would be to make college truly affordable or in the words of Senator Bernie Sanders ‘free.’ While increasing access for millions of students and eliminating the equity gap in education seems like a great idea, it is not likely to gain sufficient political support given its $2.2 trillion price tag. It also risks throwing money at a system that has failed too many for too long.
A concept that should be widely embraced and could be the solution to this $1.7 trillion problem is accountability. Rebuilding parts of the system to hold existing education institutions accountable is in the best interest of students and society.
What would accountability look like? It would start with incentivizing the right behavior. Academic institutions are incentivized to keep students enrolled (and paying tuition) for as long as possible. Institutions are not incentivized to foster and cultivate successful students that become career-ready individuals. Why not? Shouldn’t the end meet the means? Students pursue an education to improve their lives and achieve their dreams – typically that dream includes a fulfilling job in their field of study. The institution accepts payment from each student but in return is not held accountable for any return on that investment.
Driving accountability into the education system would mean that only those institutions that can prove a solid rate of return to students would receive federal funding – the higher the rate of return, the more funding institutions receive. Students make an investment in themselves and in their chosen institution when they pay tuition (and assume student loans to do so). Why shouldn’t there be some iota of a successful outcome guaranteed for that investment? The days of institutions having zero accountability to the student must come to an end.
Additionally, the traditional four-year degree must also be reconsidered. Four years of college is not for everyone, and we need to provide equal amounts of financial support and employer acceptance for alternatives. The fix here is focused on the employer mindset -- if employers take seriously the availability and viability of micro credentials, degrees, badges and certifications, in place of traditional two- and four-year degree programs, millions more learners would be on a path to achieving their dreams through education. With nearly 11 million Americans currently un- or under-employed, the time is now to offer reskilling and upskilling online courses as a way to re-enter the workforce with career-ready skills. For example, edX, the consortium of Ivy League schools offering education and skill-building to online learners for free or much less than the cost of a traditional four-year program, currently offers 3,000 courses and serves 25 million learners from every country in the world. There are many more options in the online skills space – Udemy, Coursera, Cengage’s own ed2go, the list goes on. These programs offer reskilling and upskilling to anyone who seeks it – no matter their age, experience, abilities or environment.
Given that about 65% of open jobs require a college or associates degree, employers must also consider education alternatives when promoting available jobs – is a two- or four-year degree truly required for most roles or would a certificate or micro credential do an equally if not better job preparing the individual for the role? Breaking free of the job requirement “norm” that’s rooted in traditional education paths would go a long way in expanding opportunities to skilled individuals who did not or cannot pursue a traditional academic path.
Flexible, online learning at an affordable price is a better answer for hundreds of millions of individuals who seek an education to improve their lives. Federal funding for more online career readiness courses, badges and certificates could also be tied to pragmatic accountability metrics – incentivizing companies to deliver quality instruction and materials that result in the learner being better off – either by securing employment, a higher paying job, or similar means of success.
The student debt crisis must be faced with urgency – our neighbors and communities need help, now. We have meaningful options that will make the education system more student focused, flexible and affordable. The right solution is not a one-time, $370 billion fix. The right solution is rooted in driving accountability of all players – higher education institutions, the government and employers – and lowering the barriers to entry for all who seek an education. Americans are facing so much crisis, now is the time to help all who seek a quality education to improve their lives and achieve their dreams.