When it comes to addressing the student debt crisis, even small measures can have an impact. Watch this video or read the text below to hear about four steps that can be taken!
4 small measures that can have a big impact the student debt crisis:
Creating more accessible pathways to education and career growth through micro-credentials
The education and career landscape is changing. No longer is it a given that people will go to a traditional higher ed institution and then into a 30+ year career climbing a straight-forward corporate ladder. People are now finding alternative education paths and making dynamic moves throughout their careers — shifting gears, picking up new skills and keeping up with ever-changing technology, and sometimes even making a switch to a whole new industry. Because of this, shorter-term training programs and micro credentials have become more important than ever. By making education more accessible with less time and financial commitment, we can open doors for more people to increase their skills and advance their careers, ultimately creating a stronger workforce.
Aligning incentives between learners and higher ed institutions
In the traditional higher ed financing structure, schools are incentivized to enroll learners, but there are no clear incentives to ensure strong outcomes. Once someone pays tuition at enrollment, all of the financial incentives for the school are gone. While there are many schools out there that genuinely want their learners to succeed, without a systematic way of aligning incentives around post-graduate success, it’s hard to envision a system where there is a true resource investment in success post-graduation on behalf of learners — especially those in need. That’s why at Climb, we offer incentive-aligned loans. With risk-sharing, incentive-aligned loans — or the “skin in the game” concept — schools are invested in their learners by making their total revenue contingent on learner success. Meaning, if a learner gets a Climb loan to attend a program, the school gets some of the tuition up front, and then is eligible to earn the remainder as the learner pays their loan back. This encourages schools to invest in the learner’s success through graduation and job placement because they have a significant upside. In a system we all know is broken, with risk disproportionately placed on the most vulnerable party (learners), a shift in incentives alignment can have a massive impact for the better.
Reviewing the ROI of a program before enrolling in it
You wouldn’t get a loan for a car without having it inspected, or a house without an appraisal confirming how much that property is worth. It’s equally important to assess an education program before taking out a student loan — and yet, many people every year borrow thousands of dollars in student loans without having really looked at the return on investment. At Climb, we believe it’s not just about getting a degree or certificate, it’s about getting an education that will actually help people reach their goals. Whether they’re looking for career-advancing programs or career exploration programs, everyone involved in the financing process should benefit from it — especially the students. That’s why we created measurements to gauge what students can expect to receive from their educational investment, so we can hold schools accountable for the education they’re selling and ensure that we’re helping students reach their goals in a financially responsible way. And now, those students can enroll in valuable programs with the confidence that they’ll be likely to see a positive ROI at the end of it.*
Offering accessible payment options for career training and non–Title IV programs
According to a 2018 Climb Credit survey, financing and cost are the number one factors that students look at when deciding which school to attend. Not everyone is able to pay for the full tuition and any necessary supplies upfront. And while one person may prefer to use a short-term payment plan so as not to pay interest on a loan, another person may still be unable to make the higher monthly payment plan payments. In that case, this person might prefer to pay interest on a loan in order to have lower monthly payments. With multiple payment options available, you’ll be able to open up your program to a wider range of students in different economic situations.