A Smarter Way For Universities To Charge For Tuition
The $1.5 Trillion Question: How to Fix Student-Loan Debt?
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How do you fix Student-loan debt?
On a recent Podcast the Freakonomics folks are at it again, this time changing the way we look at how Post-secondary is funded, more specifically; a smarter way for Universities to charge tuition.
Tuition is a hot topic. We (as students) want to be known for going to institutions that regularly invest in the future of their educational offerings. To do so though, said institutions must be able to increase tuition regularly to remain competitive in the market place. If the UofS raises tuition and we at the UofR don’t, people will think they have a better University!
It’s a difficult argument. You don’t want to be seen as anti-education by denying tuition increases but you also don’t want to be anti-student and be for all increases. Either way we need a better solution to the growing student debt problem.
How do you make school more affordable for those who can’t afford it but without deterring students who can?
It’s not easy being a University in 2019
Every school in North America (if not the world) is looking for more funding, better funding, and more sustainable funding. Students don’t want to pay any more, professors want raises, administrators want to remain competitive, it’s not easy being a University today. That’s what makes what’s going on a Purdue all the more interesting.
Tuition is the same as it was in 2013
Enter Purdue University. Located in west Lafayette, Indiana. 40,000 plus in students, 24 Alumni who became astronauts, and 13 who have their name on a Nobel Prize. This isn’t the interesting thing about Purdue right now, it’s what Mitch Daniels is doing. Mitch Daniels was hired as President of Purdue in 2013. That year he froze tuition and has every year since until 2021. He cuts costs every year, has reduced room and board by 5% in his tenure, and is really striving to make Purdue more competitive during a time where the United States has seen a decline in enrolment in college and universities.
In the U.S. enrolment in University and College has been on the decline for the past Nine years.
Introducing The Purdue “Back-a-Boiler” Program
Once of the latest cost savings ideas Daniels has piloted is the “Back-a-Boiler” program. Supported by investment banks, educational based funds, and private investors, students don’t pay tuition up front. That cost is covered by the “fund”. The students pay back the investor through a small percentage of the students salary once graduated and working. You have to be making more than $50,000 and the pay back for a lot of programs is well under 10%. Talk about a win, win, win! It’s great for the student and will help many students who should be going to post-secondary. It’s great for the school, diversifying their student body in the process, and finally the investment fund can make an ample return over time.
Talk about aligning goals with students and the University.
The reason these institutions exist is to train the next generation, to make life long learners out of students, and (hopefully) to get them a job. If the only way the university collects tuition is on the success of the students after they graduate, a lot more emphasis will be put on making students employable. That’s a GREAT idea.
What’s the goal of school?
Preschools prepare young kids for actual school. Elementary schools prepare students for high school. High schools prepare students for post-secondary school. Now what’s the goal of post-secondary education? Sure you could argue to create smarter citizens, or to create a well rounded mind. Some schools say they strive to “create life long learners”. Why shouldn’t the goal be to get students jobs? Is there anything more important to a student in their final year than getting a job? Getting a job ensures you’re going to keep learning. It ensures your family a better life than one with no job.
Is there any better way to help a person or community than providing good, well paying, meaningful jobs?
Jobs are the new currency.
Want to get the attention of government? Create jobs. Want to get the attention of students? Create meaningful jobs. According to the book The Coming Jobs War, author Jim Clifton talks about the data the Gallop Polls have collected over the years and what’s changed more recently. Jobs are the new currency. Jobs are the best way to grow an economy, by adding new jobs it grows a community and in turn a country. Creating jobs should be a goal for everyone.
Purdue isn’t the only school
In the podcast they mention Y Combinator offering a similar program as well as the revolutionary new school Lambda. They also talked to Kristine Bredemeier, head of admissions and enrolment at the Holberton School, a for-profit software engineering school that recently opened in 2016 in San Francisco. Right on the homepage of the school’s website it says “Our students have been employed at Google, Facebook, NASA, Tesla, and Pinterest”. How powerful for a marketing message is that?! At Holberton you don’t pay tuition, you pay 17% of your salary for 3.5 years once you graduate and are being paid more than $40,000 per year. And of the 105 grads so far, every one of them has a job.
Who’s going to be the Purdue of Canada?
A school has to try this. Why not? If you know your grads are bound to get a great job what do you have to loose? Just the press alone on it would be worth it! Someone’s going to try it, someone’s going to realize how smart this is and I want to help! Please email me Jeph(at)strategylab(dot)ca to set something up, this is the future of how we can pay for education.
