Topics: Tuition Free College; Student Debt Forgiveness; Income Sharing Agreements; and
the "I Promise" School in Akron, OH
On this episode of Solutions News, recorded on April 26, 2019, we discuss the costs of higher education - and spotlight some new ideas being explored on how to pay for it. We are also thrilled to welcome as our guest, Santa Barbara non-profit powerhouse Geoff Green, who is currently the CEO of the Santa Barbara City College Foundation, where he has led the effort to establish the SBCC Promise – tuition-free education for local graduates of Santa Barbara County high schools. We also have some great “didyaknows”, and a final note on LeBron James’ new educational promise.
The first story this week is about the ballooning amount of student debt in the United States; at the end of 2018, it totaled $1.47 trillion. Believe it or not, adults age 60 and older are the fastest-growing age cohort amongst student loan borrowers. However, younger Americans continue to carry the largest debt burden, which is preventing them from buying homes or starting new businesses. Relieving this debt burden would free up money that consumers would spend on goods and services and lift the economy. The idea of free college has been heavily debated in recent years as a solution to the problem, and most recently, debt forgiveness has been raised in some quarters. Democratic Presidential hopeful and Senator Elizabeth Warren has proposed complete debt forgiveness for the first $50,000 of any family that makes under $250,000 each year. This would eliminate 75% of all student debt and could be fully paid for with a 2% tax on the wealthiest Americans who are worth more than $50 million. An intriguing proposal for certain.
Income Sharing Agreements
The second story this week is about another alternative method of paying for college, called Income Sharing Agreements (ISAs). These agreements are investments in the future of students. The agreements mandate that for a certain amount of time (10 years for example) after graduation, the greater a salary the graduate makes, the more they pay back to the school. For the college lending the money in these income-sharing-agreements, there will be an incentive to help students land high paying jobs with potential for rapid career advancement. This focuses institutions of higher education on job preparation, career counseling, and other professional help.
At Purdue University, which is pioneering the program in the United States, these agreements create motivation for the school to invest more in each student and ensure they are ready after with a stable job after graduation.
Even in an ideal world where college is largely free, paying for expenses from meals, housing, and school supplies will still be a part of higher education and ISAs might be a great way to do that, as long as they focus on the student as a human being, rather than treating them as stock options paying a dividend.
The last story this week is about the “I Promise” school, founded by Lebron James in his hometown of Akron, Ohio. The school is taking children who are far below their grade level or are at risk of not graduating, even as early as third grade. This public school, which functions with joint funding from the school district and Lebron James’ Family Foundation, offers a cultural shift to focus on immersing the entire family in the learning process. The students are given supplies, free meals, and high teacher-student ratios, while their parents are given their own educational support and other essential supplies to help them function optimally. After just half a year, the students enrolled in “I Promise” are making remarkable progress; they have already made improvements that would be impressive in an entire school year. Already, the school is progressing faster than 99% of all schools across the nation. As the success continues, the school will expand by one grade each year, to foster new cohorts of children so that the “irredeemable” labels they were given in second grade will not define them for the rest of their lives.
Former administration building of Akron Public Schools