Far and away, the biggest challenge with going to college is facing the insurmountable debt that comes with attending school.
How big is the debt? According to an article this year on CNN, this debt amounts to a total of $1.5 trillion dollars shared among 44 million people.
If US student loan debt were its own country, it would be the 10th most-indebted country in the world.
Parents and students frantically ensue massive searches for solutions to this debt.
The 1st classic solution is scholarships.
However, scholarships are not easy to obtain, and only some students qualify for them for various reasons.
The second solution is attending a state college. This is a good option for many, but state schools are still expensive, with a normal yearly price tag between $10k – $20k.
Are there any other solutions to this massively growing problem?
The New Answer Starts at a Premiere Vermont Military Academy
The oldest private military academy in the United States, Norwich University, is the latest school to mitigate the student financial aid crisis with an idea that, although not new in conception, is cutting-edge in implementation.
So what is Norwich’s brilliant solution?
A term more often used in business than in academia, income-sharing is essentially dedicating a specific percentage of future income to pay for schooling.
To put it more bluntly, when you graduate from college and enter the workforce, you will be paying a certain fixed amount of your salary to the college for a set period of time.
Norwich University in Vermont has just implemented this solution, which will undoubtedly spur massive interest from prospective candidates looking into colleges.
There are other schools that have begun to implement this as well, including Purdue University, which has 500 students currently in their own income sharing agreement program called “Back-a-Boiler.”
Sure, there is some controversy around this relatively new idea – can it be implemented on a massive scale? Is it a sustainable model? These are reasonable questions to ask for such a novel idea.
However, one thing is abundantly clear that just about anyone can agree on – the student loan problem is one of the great crises of modern America, and it needs to be solved
In a world where alternate financing options are needed, we examine one simple question – does this model make sense?
Why This Model Will Be a Huge Success for Students
For most students, the point of going to college is to get a job once graduated from college.
True, some families have other motivations for sending their children to college – growing up, developing key social skills, networking…
But overall, the number one outcome that colleges promise is education to enter the workforce and make a salary.
And this model should absolutely motivate the career centers of colleges.
If students are paying back schools through their future salaries, then schools will be absolutely determined to help students find higher paying jobs upon graduation.
Otherwise, they simply do not make their money back.
With income-sharing models as the future of student loans, career centers at colleges will likely step up their games, implement more co-operative and internship partnerships with major corporations to ensure that employment upon graduation is higher than ever.
This Solution Can Have a Bigger Impact Than Any Individual Student
If colleges become more motivated to help students find high-paying jobs, it makes reasonable sense that this movement, if implemented on a massive, wide-spread scale, boosts the economy tremendously for two reasons.
One, if there is any hope of erasing $1.5 trillion in student debt without an inflation crisis (ie the United States government simply printing more dollars to pay off the debt), it begins with looking at financing in more creative ways.
In the long-term, an erasure of $1.5 trillion in debt would improve the US economy and well-being of our citizens massively.
Secondly, and even more importantly, colleges are incredibly well-endowed, resourceful, have loyal bases of alumni, and well-connected throughout the professional world.
If colleges become more active in helping students find employment immediately after graduating college, the economy will boom with top-tier talent backed by institutional resources to place students into amazing career opportunities.
It is entirely possible that Norwich is taking one small step towards a future US economy that is entirely healthier and less dependent on the generosity of banks and student loan institutions.
Will This Be a Good Model for Colleges?
The big question is will this work for colleges in the long run.
After all, schools use tuition dollars to help fund teacher salaries, quality of life on campus.
In the short-term, colleges will definitely have to do some major planning to major this system work. They will essentially need to call upon investor dollars, such as what Purdue has done, to help fund daily operations.
In the long-term, this will be hugely successful for colleges, as they will be able to take on recurring payments on a large volume – thousands of students from every single year will be paying the colleges a contracted amount of salary.
This in turn will help fund universities in their day-to-day operations, ensuring an ultimate win-win in the long run.
Norwich University Takes the Lead
Norwich is the latest school to try out this innovative and bold idea that will ultimately lead to students going to college without debt.
If you don’t know about Norwich University, it has long been considered one of the best colleges in the US for military training.
138 graduates of the school have become general officers throughout the US army.
This legendary school is recognized by the United States Department of Defense as “the birthplace of the ROTC.”
In a statement to the Associated Press, the university said that they are committed to “reducing financial barriers” so that students of all backgrounds and income levels can attend the school.
Other Colleges Participating in Income Sharing
A number of schools are now implementing revenue sharing as part of their agreement for colleges.
These include Clarkson University in Potsdam, NY, Purdue University in West Lafayette, IN, and Lackawanna College in Scranton, PA.
Featured Image by Zuejay via Wikimedia Commons