By Ben Paynter, Fast Company
Nearly half of all college students in America end up dropping out, an epidemic quit rate that's poised to cause some serious economic trouble: Most jobs today require some form of higher education, leaving a gap of 3 million qualified candidates by 2018 that spikes to 16 million by 2025.
This achievement gap already costs the U.S. as much as $2.3 trillion annually in lost gross domestic product because less-than-qualified U.S. workers end up underperforming. At the same time, for those struggling to get ahead, a diploma also represents one of the surest ways to ensure upward mobility. People without a college education are three times more likely to live in poverty.
The real failing, however, may lie with educational institutions, which have yet to figure out how to stop this trend. "It seems like a bunch of institutions are kind of tinkering in silos, repeating the same experiments [to fix things] over and over and in many cases making the same mistakes," says Bridget Burns, the executive director of the University Innovation Alliance, a coalition of 11 colleges and universities that, in 2014, banded together with $5.7 million in initial backing from donors like the The Gates Foundation and Lumina foundations in order to share information on what tactics were working and test news ones on a larger scale. The group includes schools like Arizona State, Purdue University, and The University of Texas at Austin.
Burns says that most of UIA's school presidents realized they were doing an awful job at keeping students enrolled, particularly those who from low-income households, first generation, or students of color. "[They said], 'Clearly we're all pretty united in a sense of urgency around this. Is there a way we can work together because working alone is a waste of time energy and money? And at the end of day, students are the ones who are paying the price.'"
"It seems like a bunch of institutions… repeating the same experiments [to fix things] over and over and in many cases making the same mistakes."
To do that, UIA's roundtable began sharing current and historical data across schools to spot trends that each place might not otherwise tease out. The group has developed a predictive analytics system to flag early indicators for students who may be struggling, which allows schools to do pre-emptive counseling. It's also backed by giants like the Ford and Kresge foundations, and has raised a total of $15 million to put toward such efforts.
One alarming trend: Despite receiving financial aid, roughly 4,000 seniors who have good grades may quit school because of small outstanding scholastic debt. The sums are often less than $1,000–but in many cases, such balances make them unable to register for their next batch of classes.
UIA and its partners will spend $4 million on micro-debt forgiveness, which will be managed by in-network academic advisors to use at their discretion over the course of the next five semesters. Half of the money is coming primarily from the Gates Foundation and Great Lakes Higher Education Corporation & Affiliates but the other half is a school match. Because every project that UIA does is carefully vetted beforehand, all institutions agree to double whatever philanthropic amount is directed toward their campuses.
The estimated award per student is projected to be about $900, but students can't apply; administrators, who are adhering to an internal formula designed to spot the best candidates, will identify candidates and offer the one-time surprise infusion. "We know there's variation across the 11 [schools] but we want to find the students who are low income, on track to graduate within a year—so they've already got a lot of effort behind them and it's not too far ahead—but they have some unexpected costs," she says.
Those costs might be anything that could disrupt an already tight budget, from a parking ticket that went unpaid and snowballed, to car repair, or an unexpected rent or medical issue that affected someone's prioritization for what must be repaid. For low-income students already on loans, that's generally a dream killer. "If we don't help them through to the finish line, that could waste all their effort."
The concept of micro-debt relief has already proven effective at Georgia State University, a UIA affiliate that started its own retention granting program in 2011 to try to support the 1,000 or so students that it was losing each semester of extremely small tuition balances. Georgia State's program is open to all students, not just seniors. Historically, it has 75% of those with more than a year to go are still enrolled 12 months later, while 60% of senior recipients go on to graduate within the same year that they receive assistance.
"Completion grants have been a critical part of our efforts to help students persist and succeed," added Tim Renick, GSU's vice-provost in a press release about the new effort.
Burns expects UIA disbursements to cover only about half of the coalition's students in need. That's partly because of limited funding but also necessary because it's a wide-scale experiment. Not aiding everyone creates a sad but necessary control group, allowing future funders to better compare the power of small, emergency cash allowances for those who received them versus those who didn't.
More broadly, however, she hopes that UIA's investment encourages other schools to act similarly. "This signaled where they should be focusing their attention," she says. "These are many of the most innovative universities, who are saying, 'These are things that are worth your limited time energy and money.'"
The University of Innovation Alliance is a grantee partner of ECMC Foundation. In 2017, we made investments to support the network's expansion efforts. Learn more about UIA.