Colleges Don’t Care About Your Professional Success
It’s time. You are now ready for college.
You’ve worked hard. You’ve taken AP classes, gotten great SAT scores, done volunteer work. You’ve sent your college applications, gotten acceptance letters, and chosen the right academic program.
You expect college to be the door to success.
Sorry to break the news. Colleges don’t care about your professional success. Why should they?
83 percent of college revenue is based on tuition. In the US, the amount of college tuition is divided into credits. To take a course, you have to buy a certain number of credits. Based on the courses you take, you can then get a degree.
The problem with the pay-per-credit system is that it’s based on the resources invested by colleges and not on student outcomes. A graduate that obtained a degree with an expected salary of $40,000 paid the same tuition amount as a graduate earning twice as much. At the University of Pennsylvania, learning Akkadian costs the same as learning Operating Systems. While a recent Ancient History graduate earns $43,900, a Computer Science graduate earns $70,700, according to Payscale.
There are two ways to fix this: Income-Based Tuition and Income-Share Agreements. With Income-Based Tuition, colleges adjust their tuition prices to the expected graduates’ salary. This data could be obtained using audited historical records or an independent third-party census. This mechanism is easier to implement since it only adjusts the price while maintaining everything else the same.
Income-Based Agreements are a more radical solution. These are contracts where students commit a certain percentage of their future income for either a certain period or a certain amount. Financing these agreements is more difficult for colleges. Since they won’t get paid until a graduate gets a job, they risk running out of money in the short term. Therefore, colleges need to obtain financing to make it work.
I don’t propose that other courses and degrees — like Ancient Studies — fade away, but I do think that colleges need to reallocate their resources to focus on student success. The benefit of Income-Based incentives is that it aligns the colleges’ objectives to students’ success. This results in an increased offering of high ROI degrees for students and improved social mobility.
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Jorge Téllez is Director General at CeroUno and Entrepreneur-In-Residence at Turing School of Software and Design.
