US universities hand out degrees with guarantees

Students at the 27 public colleges of applied technology in the US state of Tennessee earn qualifications in such complex fields as computer-aided design, information technology, advanced manufacturing, and aviation maintenance.

From this autumn, they and their employers will get something else, too: a warranty.

If graduates fail state or national licensing exams in their professions, within one year, they will be retrained at no charge.

The idea is “to stand behind our graduates,” said Carol Puryear, vice-chancellor for economic and community development for the Tennessee Board of Regents. “We want to make sure that industry is satisfied and that our students are satisfied.”

The move is part of a growing debate in the US over whether higher education institutions, like other businesses, should offer such guarantees – especially considering the high cost of tuition, which students often pay for through loans.

Many new players in the sector, such as fast-paced for-profit computer coding schools and the online course provider Udacity, are promising all or some of their students their money back if they do not get jobs.

That has prompted a handful of traditional universities to offer similar guarantees. Several public universities in New York will let students finish their degrees for free if it takes them longer than four years, for instance. Private Davenport University, in Michigan, will provide additional education at no cost to students who have not secured jobs within six months of graduation.

But there’s a long list of requirements and restrictions: Davenport, for instance, makes its guarantee to students in only three high-demand fields. Other institutions mandate that students maintain certain grade point averages and take minimum numbers of courses.

Critics say that such rules make some of the promises pure public relations by dramatically narrowing the chances that students will qualify; proponents, that such stipulations – along with the fact that institutions typically offer only the chance to repeat courses at no cost, while not refunding any money – discourage students from taking advantage and coasting through their work knowing that they could blame the universities for falling short.

Whatever the impact, lawmakers are now joining a chorus of students, parents and consumer advocates calling for forcing universities to take on a greater stake in their students’ success.

With more than 43 per cent of US students failing to graduate within even six years, and a record 8.1 million now in default on the money that they have borrowed to pay tuition fees, there is a bipartisan effort in Congress to make colleges reimburse a share of the loans that their future students cannnot.

That would make the institutions “pay attention to rising costs and failing students”, Elizabeth Warren, a Democrat senator and a co-sponsor of the proposed legislation, has said.

Two dozen higher education associations have declared in response that the proposal would only further increase those costs and “penalise all students and institutions in [an] attempt to address the behaviours of a handful of bad actors”. They also warn of another unintended consequence: that, to avoid risk, universities would turn away applicants with the least preparation – often low-income students and ethnic and racial minorities.      

These institutions have an ally in Donald Trump’s administration, which – under a president who paid $25 million (£18.2 million) to settle lawsuits alleging that his own now-closed for-profit Trump University made deceptive claims – is going in the opposite direction.

Mr Trump’s Department of Education has reversed an Obama-era promise that students defrauded by higher education institutions would have their loans discharged. The department has changed the rules to scale the refunds based on how much money the students are making now, arguing that, if they have a certain income, they must have received some benefit from the partial educations that they received.

It’s not an abstract concept. Tens of thousands of former students have filed claims to have the loans forgiven that they took out to pay to attend the failed for-profit Corinthian Colleges, which the government found falsified job placement rates.

Now the Trump administration has proposed requiring that, in future cases, students prove that an institution misled them in order to have their loans discharged.

“That is a nearly impossible case for any student to make,” said Debbie Cochrane, vice-president of The Institute for College Access and Success and an expert on debt relief.

All of these developments show “the effect of not enough college accountability, that we had these schools that even the Department of Education knew were not doing right by their students”, but for which some of those students now will not be able to recoup their costs, Ms Cochrane said.

“We absolutely are going to hear more about college accountability in the coming years,” she said. “Because our accountability systems right now are simply not strong enough.”