College Affordability and Thinking “Out of the Box”

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The traditional model for higher education is under stress.  Families are asking the question: Is it worth it?   If you have put yourself, or your children, through college or work on the “front lines” of higher education, you understand how important this question is. 
 
Complacency is not an option.  In an era of stagnant incomes and persistent unemployment, families are taking active steps and adopting multiple strategies to reduce the cost of going to college.
 
Looking beyond the headlines, the noise and the hype, the data is convincing.  Investing in education is worth it.  Families continue to believe in the value of a college education although the traditional delivery models, and their associated costs, are being challenged.  Below are some highlights of the innovations in meeting the challenge of college affordability that are being pursued by stakeholders in the future of higher education:

Escaping the Student Debt Trap

Miguel Palacios and Felipe Vergara, through their startup Lumni, are pursuing alternatives to traditional student lending models with “income-share agreements” (ISA).  ISA’s represent a dramatic alternative to the “Pay As You Earn” (PAYE) program and deferment/forbearance/forgiveness options being championed by the federal government.  ISA’s are an old idea (first posited by Milton Friedman in 1945) gaining new traction as families and businesses question the value of a degree. 

Retention High Performers

The relationship between affordability and retention is one of several areas explored in the report “Lessons from Retention High Performers:  Successful Strategies and Best Practices” published by Eduventures in May 2014.  Prioritizing retention can come at the expense of other institutional objectives, particularly enrollment goals.  Managing these tradeoffs requires support from senior leadership at the institution. 

An Open Letter to the People of Purdue

Mitchell E. Daniels Jr., President of Purdue University has caught the attention of the nation with his “Big Moves” initiative.  President Daniels, through “An Open Letter to the People of Purdue”, recognizes the stresses higher education is under, the critical role affordability plays in the success of an institution and its students, and highlights a number of innovations already implemented at Purdue.

The Power of Planning

Tuition Management Systems (TMS) has focused on its mission of helping families afford education and helping schools prosper for 30 years.  Working with its school partners, TMS enables the development of sustainable financial plans, one student at a time.  Key milestones in the student life-cycle are leveraged to help drive engagement in the planning process.  Counseling families on how to model and implement multiple funding sources in a “solution stack” helps them make decisions that are sustainable, and yield the lowest total cost.  Delivering this counseling consistently across multiple channels ensures access.  The cumulative benefit of a sustainable financial plan is dramatic.

It is my hope that you find these stories of innovation inspiring and beneficial as you champion your own institution’s commitment to affordability.  While some of the innovations discussed may not be something you can directly affect or implement at this point in time, others may be clearly actionable. Take a look at my eBook, below, to learn more about "Making a Commitment to Affordability":

 

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