September 6, 2022 by Dean Hoke – The percentage of students without a post-secondary degree in the United States has been a widespread concern for decades. Employment at a decent working wage did exist for those who did not have a degree however that world is quickly changing. This topic has been of interest to me for over 50 years because I am one of those who dropped out of college.
I started attending university in the Fall of 1968 and it took me until June 1975 to complete my bachelor’s degree. I attended two universities and dropped out twice before coming back and finishing. I thought in early 1969 when I left the university, I didn’t have the academic ability to get a degree and my university advisor certainly was not supportive and suggested I should go sign up for military service that day.
I did go back to another smaller university six months later and though I had pauses due to those challenges everyone has in life I finished with a bachelor’s degree six years later. Upon graduation, I started immediately after commencement at a small university in Kentucky as an admissions officer and completed my master’s in a relativity short amount of time while working.
With that in mind, I have always wondered how we get dropouts back to school and finish their degree. Employers, government, and adults all believe it’s needed, and it has financial benefits for all. Yet nearly 40 million people from the age of 18-64 started higher education and did not complete one degree. I am presenting my initial thoughts and I would ask for your thoughts on how to address this question.
US Labor Market
According to the Federal Reserve Bank of Saint Louis, the US Civilian Work Force from 25-34 as of June 2022 has the following educational attainment
The Harsh Facts on College Dropouts
American higher education overall has 39 million people with Some College, No Credential (SCNC) as of July 2020 according to the National Student Clearinghouse Research Center. The most recent study dated 2017 shows the following:
- 30% of first-year students drop out before their second year of college.
- 58.5% of students who started in community college after 6 years have not obtained any degree or certificate (1,071,720 students from students starting in 2011)
- 32.6% of students who started at a four-year institution after 6 years have not obtained any degree or certificate. (730,556 students starting in 2011)
According to Forbes Nov. 2021 article titled “Shocking Statistics About College Graduation Rates”
- Nearly 1 million students drop out each year.
- More than two-thirds of college dropouts are low-income students, with family-adjusted gross income (AGI) under $50,000.
- Full-time employment reduces graduation rates.Students who work a full-time job during the school year are half as likely to graduate with a bachelor’s degree, as compared with students who work 12 hours or less a week. Every additional hour of work beyond 12 hours a week reduces graduation rates. Working a full-time job takes too much time away from academics.
The reasons why are not surprising but still distressing.
According to the 2020 US Bureau of Labor Statistics, the average wage earned by a person by education level looks like this.
One statistic that stands out is the percentage of the income difference between a 4-year degree vs a person with a two-year degree person is $19,288 a 38.5% increase.
As the United States’ employment needs quickly change, industry and government have a pressing need for more qualified workers. In the publication HR Drive titled“Employers are hiring, but 80% say they can’t find skilled candidates” More than 82% of employers said they’re actively hiring, despite predictions of an economic downturn, according to a survey of 150 HR leaders by Challenger, Gray & Christmas, Inc. 80% of the respondents, however, reported having difficulty finding workers, with 70% identifying skills shortages as the reason.
It is further reported that 43% of Challenger’s respondents reported that, although they have enough applicants, those applicants do not have the needed skills. Another 43% said they do not receive enough applicants, with 27% noting that candidates who do apply are not qualified. “The labor market remains tight and employers are reporting skills shortages in almost every area, including in STEM, data analytics, human resources, finance, and operations.
During the next decade, the need for people with advanced credentials will continue to rise. Corporations have made it clear there is a need for more qualified workers whether it’s via a traditional degree such as a bachelor’s or micro-credentials/badges which verify customized skills. A report by McKinsey projected that more than 100 million workers will need to find a different occupation by 2030. In the United States, for instance, customer service and food service jobs could fall by 4.3 million, while transportation jobs could grow by nearly 800,000. Demand for workers in healthcare and STEM occupations may grow more than before the pandemic.
How industry addresses the education of employees
In the 2019 study by the International Foundation of Employee Benefit Plans
Organizations use different techniques for reimbursing student employees. The most common include:
- Tuition assistance/reimbursement (63%)
- In-house training seminars (61%)
- Attendance at educational conferences (51%)
- Continuing education courses (50%)
- Coverage for licensing courses and exams (44%)
- Personal development courses (35%)
Looking at tuition assistance the concept by employers is not new and many have had some sort of program in place for well over 10 years.
The Society for Human Resource Management survey reports tuition assistance programs are an attractive recruiting measure, and most employees are aware of the basic benefit. However, less than 5% percent of employees participate. Of those who participate in the tuition assistance program more than 4 in 10 who are using the benefit to attend graduate school.
Large corporations such as Starbucks, Target, Walmart, and others have all implemented go-back-to-school incentive programs using various higher institutions schools with an emphasis on online degree institutions.
Example One – Starbucks
Starbucks was one of the early adopters. In 2014, Starbucks and Arizona State University (ASU) introduced the Starbucks College Achievement Plan (SCAP), which provided Starbucks’ U.S. employees the opportunity to earn their first-time bachelor’s degree with the company paying for 100% of their tuition.
in 2021, Starbucks modified the tuition reimbursement benefit by paying all tuition and fees up front, as opposed to reimbursing employees for their out-of-pocket costs later.
- More than 20,000 Starbucks employees are currently participating in SCAP.
- The number of employees finishing their undergraduate degrees through SCAP will reach over 8,500, with Starbucks setting a goal of 25,000 graduates by 2025.
- There are more than one hundred different degree programs offered through the SCAP program, and Starbucks has employees enrolled in all of them.
- Almost 20% of people who apply to work for Starbucks say that SCAP is a major reason for their decision.
- SCAP scholars are retained by Starbucks for a 50% longer period than non-participants, and they are promoted at nearly three times the rate of those employees who do not participate
Example Two – Walmart
In July 2021 Walmart announced it will pay for full college tuition and book costs at some schools for its US workers, the latest effort by the largest private employer in the country to sweeten its benefits as it seeks to attract and retain talent in a tight job market.
The program includes 10 academic partners ranging from the University of Arizona to Southern New Hampshire University. Participants must remain part-time or full-time employees at Walmart to be eligible. They have recently dropped a previous $ 1-a-day fee paid by Walmart and Sam’s Club workers who want to earn a degree and will begin to cover the costs of their books.
Example Three – Target
Target in August 2021 announced a fund to support educational courses for its employees. It is similar to the Walmart program. Available to 340,000 full-time and part-time workers.
- Cover the full cost of select undergraduate degrees, certificates, and certifications for its 340,000 U.S.-based workers.
- Pay up to $10,000 each year for master’s programs at those institutions.
- Allow participants to attend one of 40 partner institutions.
- Invest more than $200 million within the next four years in the program
However, one of the issues employees are challenged by is tuition remission vs tuition assistance. It is difficult and a deterrent to potential participants to upfront costs.
Researchers who have studied tuition benefits, including Jaime S. Fall, director of UpSkill America at the Aspen Institute, and Kevin Martin, chief research officer at the Institute for Corporate Productivity, believe that frontline workers might be more likely to participate in these programs if companies moved from “tuition reimbursement” to “tuition assistance” models, where employers pay their portion of education costs upfront. Many lower-income employees—or workers of any kind—can’t afford to float tuition costs for several months while they wait to be reimbursed.
Despite these new and innovative programs, we still have millions who are not going back to school. While 80% of employees are positive about these benefits only 40% have made any investigation and only 2% have taken advantage.
Student Barriers include
- Restricted options by degree, college choice, net cost, upfront payment before receiving reimbursement
- Lack of knowledge of grants and loans by employers, government, and schools.
- Student personal issues (living life and family issues)
- Childcare options and cost
- Fear of failure,
- School too far away
- The older you get the less likely you will return to school
Paths to Explore by Higher Education, Corporate, and Government
Each sector is aware of the challenge and trying different approaches to get students dropouts and get a degree.
- Private and state-supported regional universities are an asset underutilized
- Further development and refinement of quality online degree programs to encourage re-enrollment
- Developing stronger retention programs to reduce the percentage of college dropouts
- Expansion of Teaching and Learning Centers for their communities
- Evening and weekend on-campus programs
- Academic credit for life experience
- More student-friendly transfer of credits to a new school
- Easier for students with outstanding bills to send an academic transcript
- More generous funding for employees to return to school. Going above the $5,200 a year tax deduction
- The movement to paying tuition in advance by the employer rather than paying tuition in advance by the student
- Increasing the number of majors a company will financially support
- Opening the door for employees to have a selection of more universities including accredited private institutions
- Establishing paid apprenticeship programs
- An example is the IBM apprentice program which aims to hire more than 400 trainees each year, from software development to data science to human resources. The current estimated cost to the company is $65 million since 2018.
- Improvement in communicating and encouraging employees to return to school
- Increased priority in developing joint partnerships that incentives employment and encourage dropouts to return to school
- Increase current state and federal student grants program
- Establish no-interest loans to encourage students who have previously dropped out to return to complete their undergraduate degree
- The passing of the National Apprenticeship Act (H.R.447) which is advocated by numerous corporations
Let me expand on the role of partnerships between government, Corporate and higher education. The development of regional partnerships between government, industry, and higher education is not necessarily new. It has been used with tier one institutions such as Ohio State, the State of Ohio, and local government to entice Intel to establish a major tech center in Central Ohio.
Another recent bi-partisan proposal was introduced in August, by Rep. Jim Costa (D–Fresno) and co-sponsored by Rep. Bruce Westerman, an Arizona Republican. The bill is aimed toward four-year regional public universities in distressed areas that could receive federal grants of up to $50 million for economic and community development efforts under newly introduced bipartisan legislation.
In a press conference at Fresno State to unveil new legislation that he will put forward to Congress that would benefit up to 174 universities, Congressman Costa stated “Universities like Fresno State and many universities throughout California, but throughout the country, support community development. “They represent constituencies where we have distressed communities. They support the workforce, leading to faster employment growth, along with a higher per capita income.”
Robert Maxim, a senior research associate at Brookings, a think tank based in Washington, D.C. is an advocate of this type of partnership. “There are way more regional public universities in the U.S. than there are R-1s, our view is that they are really good anchor institutions to route federal investment through. They are a set of institutions that have been historically neglected and deserve a bit more attention and support from the federal government.”
I believe we need to prioritize on the group with the best chance of returning and obtaining a degree, the 25-34 age group with some college but no degree. This is 5.7 million of the overall 39 million who started college but did not finish. While we should make available any current or new programs that encourage people to return to school the 25-34-year-olds are the most likely to go back.
The United States should emphasize the wider use of partnership programs with government and industry teaming up with state regional higher education institutions and local small town and private colleges and universities would be a valuable asset to all parties. These schools are scattered in smaller cities across America. Both regional state institutions and private schools come from the applied teaching traditions Many are in small towns and rural areas in which employees who wish to return for a degree have few options. The question of cost certainly exists but I believe some form of government/industry/university partnership can effectively address the cost issues. They have space and teaching knowledge and the ability to customize local solutions.
One final thought and that is the question of will. While cost is a significant issue government, industry and schools must work in unison to get students to return and complete their education. We must remember these are second or in some cases third-chance students. They have failed in their attempts for various reasons. However, these students must overcome the fear of failure. We must find ways to support and encourage these students to take that leap of faith and believe they can graduate.
I have been asked why did I go back? I worked in a factory and my parent’s deli for 6 months I felt I needed someone to test me and determine what I should do for the rest of my life. I went to the state employment bureau in my hometown to be skills tested to learn what I was best suited for. After the tests, I sat down with a lady who read the results. She told me with a smile that scared me I needed to go back to college and get a degree. Seeing I was somewhat shocked by her recommendation she stated the test revealed my hand/eye coordination was horrible and if I worked in a factory as my father did, I would seriously hurt myself. I asked her about joining the military and she commented if you went into the military, it better be an officer working behind the lines in military intelligence because I was unlikely to be much of a decent front-line soldier. As you can see, I graduated, and my proud parents were there for the event. I later in my life suspected the lady at the employment bureau was trying to give me a slap of reality to grow up and use my brain.
Dean Hoke is Co-Founder and Managing Partner Edu Alliance a higher education consulting firm located in Bloomington, Indiana and Abu Dhabi, United Arab Emirates. Dean received his Bachelor of Arts degree from Urbana University in Ohio, his Master of Science in Community Development from The University of Louisville, and a graduate of the Wharton School of Business Executive Management program. Since 1975 Dean has worked in the higher education and broadcasting industry, serving in senior leadership roles specializing in marketing, communications, partnerships, online learning and fund raising.
He currently serves as Chairperson Elect of the American Association of University Administrators , Franklin University and is Co-Host of the Podcast series Higher Ed Without Borders . Dean is actively engaged in consulting projects in international education, branding, business intelligence, and online learning leading projects in the United States, the Middle East, Africa, and Asia. Dean resides in Bloomington, Indiana