Sure, college is fun and the inspiration for a genre of brick-and-ivy-based comedies like Animal House. But then comes the bill, the low-wage entry-level job, and the long climb to financial solvency leaving graduates (and many more dropouts) thinking, ‘Was it really worth it?’
Ryan Craig, co-founder and managing director for University Ventures, wants prospective college students to understand the financial consequences before committing to a traditional four-year college education. Consider his book, A New U: Faster + Cheaper Alternatives to College, as an intervention to the ‘college for all’ mythology featured in movies and still promoted by guidance counselors.
Craig’s book doesn’t discount the value of a traditional college education and a bachelor’s degree. He counters the appealing lecture halls, dining plans and dorm life with the reality of post-college life, namely student debt and uncertainty of getting a quality first job. Now there are more options for students who want to learn work-ready skills and secure a better first job without saddling themselves with debt.
These pathways are non-traditional post-secondary learning opportunities like apprenticeships, last-mile training programs, and online credentialing. Many of these are coming with alternative financing arrangements outside of the traditional student loan.
With employers scraping the bottom of the talent barrel in a tight labor market, they are looking beyond college degrees to get the employees with the right skills. Students who opt for these college alternatives are finding more impactful outcomes from their investment in their education.
“These are pathways to the jobs that young people actually want. They’re in technology, they are in health care and they’re available through these faster and cheaper pathways,” Craig told WorkingNation.
Higher education’s response has been slow in the face of mounting evidence that bachelor’s degrees — still a worthy asset for graduates’ future earnings — are losing ground as a proxy for skills and employability. Craig writes that schools which ignore the “employment imperative” — that a post-secondary education should prepare graduates for their first, not fifth job — will face increased disruption by college alternatives.
This “revolution” in education will happen, Craig said, when colleges fail to align their programs with what students want: skills and more guidance to employment. As college alternatives present a more attractive option, the free market will decide the fate of traditional colleges as students make better economic decisions about their future.
“They’re not getting the skills that employers are seeking in those first jobs. The mismatch of the employer and education market is prompting this revolution,” Craig said.
By gathering the stories of adult learners who are participating in the revolution, Craig offers a window into their decision-making. Often, the anecdotes involve motivated and hard-working graduates who couldn’t find a job, despite their degree and experience. In their search for a solution, they find a program that is tailored to their lifestyle and learning goals. They are the last-mile training programs, either from a third-party provider or employer-led. Craig calls them College MVPs, in which they train a minimum viable product (skilled graduates) in a more efficient and cost-effective way for both students and employers.
One of the programs cited in A New U is Techtonic Group out of Colorado. It is the first Department of Labor registered apprenticeship program for software developers. This “outsourced apprenticeship” model is emerging in popularity because of its promise to bring training solutions to scale, according to Craig. Employers who don’t want to make the investment for in-house training can take on the apprentices at a cheaper rate and less risk.
“For the last year [Techtonic] has brought to the market a completely novel value proposition,” Craig told WorkingNation. “Not only will they develop your app, once Techtonic apprentices have billed 1,000 hours on a project, [employers] can hire them.”
WorkingNation hosted Techtonic Founder and CEO Heather Terenzio at our Boston Town Hall on work-based learning earlier this year. She explained how the first-of-its-kind apprenticeship develops a talent pipeline for non-traditional students who have a desire to become software developers.
Third-party solutions to workforce development do not have to be the sole source for innovation in apprenticeships as a college alternative. Craig said that employer-led initiatives in insurance, banking, finance, and pharmacy are also upending the notion of what apprenticeships can be.
One program he mentioned briefly is the Zurich Insurance apprenticeship with Harper College, which was featured as part of our Do Something Awesome mini-documentary series. These programs, inspired by the European apprenticeship model, are rare and Craig said that outsourced apprenticeship like Techtonic will ultimately capture American companies’ future business.
“You have to be really motivated as an employer to run your own apprenticeship program. They’re not many American employers who do it at scale,” Craig said. “We see a future that is outsourced where service providers essentially amplify their value proposition by adding talent [development] as part of what they are providing to their client.”
The other part of the financing equation for skills training is that students can have their education paid for based on their success in landing a good first job. Craig promotes in A New U that cost-conscious learners can choose schools with income share agreements (ISA). These arrangements allow graduates to repay their education with a portion of their monthly income which is determined by their overall income.
Craig said that ISAs are a better deal compared to student loans which must be repaid whether a student graduates or not. ISAs can signal to students that they will get the technical skills and job placement and have the means to pay for it. If they don’t have a successful employment outcome, they do not have to repay.
“It’s sort of a social insurance program for student lending. Employers benefit because they’re not getting young employees who are having a hard time repaying their student loans,” Craig said. He added that students who could fall into the debt trap can bypass traditional loans.
Education providers who offer ISAs also benefit from them because they send a “positive signal” to students that there is an employment opportunity at the end of their journey. To compete for students’ dollars, he said that programs outside of the name-brand schools must offer a better guarantee of their product.
“If [post-secondary education providers] are still only charging tuition 10 years from now for their program without an element of income share, [they will] send a very negative signal,” Craig said. “Students will be expecting employer-paid programs or income share programs which provide a higher probability of a positive employment outcome.”
If the disruption of higher education continues and the revolution in higher education takes hold, will we see the demise of the traditional college? In his book, Craig makes the case that many non-selective colleges will adapt by offering faster and cheaper pathways. While selective schools still will offer the same college experience of lecture halls and dorm life. For most students who don’t have the luxury of access or wealth, college alternatives will be there to fill the void.
“It’s not just about the tuition dollars. It’s the total cost and it’s the outcomes. That’s why I think these faster and cheaper programs will be the ones that win the day, said Craig. “It’s just a better value proposition.”
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