I recently had a chance to interview Ryan Craig, author of A New U - Faster & Cheaper Alternatives to College. He provides some great alternatives to a traditional college option. Check out his book for more information!
Q. Why is now a good time to consider alternatives to traditional colleges?
A. It’s not only a good time. It’s essential for millions of families. While conventional wisdom states that college is the only sure path to a successful economic future, Millennials have discovered just the opposite. Millions of young Americans are dislocated, disgruntled, and burdened by a mountain of student loan debt. While college graduates have an average of $37,000 in student loans that need to be repaid, a high percentage of Millennials have been unable to repay those loans. Only 57% of recent graduates are current on their student loans, and as many as 45% of recent graduates find themselves underemployed in their first job – meaning they’re taking a job that doesn’t actually require the degree they just earned. And we know that underemployment in the first job after college can leave long-term scars: 2/3 of graduates who are underemployed in the first job remain underemployed five years later; half remain underemployed a decade later.
So if college isn’t a sure thing, what options are out there? The silver lining of America’s twin crises of college affordability and employability is the rise of hundreds of faster + cheaper alternatives to college. These programs include bootcamps, income share programs, staffing, and apprenticeship models – many of which don’t charge tuition or require students to take out student loans, and some of which even guarantee great jobs in growing sectors of the economy like technology and healthcare. (The era of equating college alternatives with building and industrial trade jobs is over. These new programs lead directly to the good jobs that college graduates are increasingly struggling to get, largely due to lack of proven digital skills.)
Q. How can students and their families sort out the best education option for them?
A. For the first time in decades, many families will have a real choice to make – not simply which college to attend, but rather whether college makes sense in the first place. In my new book, A New U: Faster + Cheaper Alternatives to College, I present a matrix that I hope will be helpful in this process. Green means go to college. Red means don’t. And yellow means it depends.
If you’re admitted to a selective college that provides scholarships or grants to make tuition, fees, and room and board affordable, you should put down this article, hurry up, and enroll. The challenge, of course, is that there are only about 200 colleges and universities that can properly be called selective (i.e., less than 50 percent acceptance rate). Although selective institutions enroll less than 10 percent of all undergraduates, they play an outsized role in American life. They include the top private research universities and liberal arts colleges, but only a surprisingly small number of public flagships (about a dozen) including Berkeley, University of Texas at Austin, University of North Carolina at Chapel Hill, University of Virginia, and University of Michigan. Selective universities pay dividends decades later through alumni networks and connections and pay off immediately in the form of higher starting salaries.
Conversely, if you’re admitted to a non-selective school without the requisite college and scholarships or grants to make it affordable, look carefully at alternatives before you make a big mistake.
What do I mean by affordable? The Lumina Foundation, one of the most respected philanthropies focused on higher education, has put a name on college affordability. Lumina calls it the “Rule of 10.” The Rule of 10 states that students should pay no more for college than the savings their families have generated through 10 percent of discretionary income for the past ten years, plus the earnings from working ten hours a week while in school.” Arguing that families should not be expected to contribute anything to college unless they’re able to support themselves, the Rule of 10 provides an exclusion for all household income up to 200 percent of the poverty level.
For example, a family of four with a household income of $100,000 should have been able to save $429 per month for a decade, or $51,500. Add to this an estimated $3,625 that the student could earn by working ten hours per week for four years and the family should not be expected to contribute more than $65,000 in total—whether out-of-pocket or by taking out student loans. And a family of four with a household income of $50,000? They’d contribute $1,500 out of savings plus $3,625 per year from student earnings, or not more than $16,000. Any college or university that expects that the family should contribute more than that to tuition, fees, room and board—whether out-of-pocket or via loans—is unaffordable.
Unfortunately, that’s nearly all colleges and universities. Which means there are very few schools at which a family near the median household income would find themselves with a green light for college. On the other hand, if your family is very well-off, then the red quadrant—in fact, the entire bottom half of the matrix—will be foreign to you.
What if you find yourself in a yellow quadrant? My advice is that if you’re in the bottom-right yellow quadrant—selective college, unaffordable—you’ll want to view affordability much more flexibly than you would for a non-selective college. My suggestion is to consider taking on more debt, or even significantly more debt, than the Rule of 10 allows. Call it a Rule of 20. The benefits of attending a selective college are highly likely to pay off down the road.
And if you’re in the top-left quadrant – non-selective college, affordable – then you have a hard choice to make. College is affordable, but faster + cheaper alternatives may provide a better return on investment. In my book, I include a directory of 250 of these faster + cheaper programs that are available today. These bootcamp and apprenticeship programs are worth considering, although many are as competitive as selective colleges.
Q. How can people who choose alternative higher education options make sure that they are on an equal playing field for employment?
A faster + cheaper pathway to a good first job isn’t a replacement for a college education. But it could be a smart first step to get your foot on the first rung of the career ladder – without any debt.
In thinking longer term, beyond the first job, you’ll want to make sure to document your skills and work product. Your second and third employer may well care more about demonstration of your competencies and work from your first job than whether you have a formal credential like a degree. Think about utilizing digital credentials (badges) and ePortfolios to document your work in a way that can be shared with future employers.
You’ll also want to keep in mind that you’ll probably end up needing as much “college” as you would have gotten by attending college right out of high school. In today’s globalized knowledge economy, less postsecondary education would be economic suicide. The point is that it needn’t be all at once. If you follow a faster + cheaper pathway to a good first job – and get there with no student loan debt – you’ll undoubtedly need secondary and tertiary pathways to boost your cognitive and executive function skills, in order to move on and move up in your career. Expect to see such skill-building pathways from a college or university near you, and soon.
We’re in the early days of the long-awaited transition from “all you can eat” to “lifelong learning.” And now we have a clear idea of how this transition begins. It begins with tens of thousands, and then millions of students making smarter economic choices and opting for faster + cheaper alternatives to college.
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