Flexible student aid would help opportunity youth

By the time Peter Drucker popularized the term the “knowledge economy” in 1966, the American Dream still resonated with young people who were told that if they worked hard and got a college degree they would get a good job.  Yet nearly half of today’s youth believe the American Dream is more dead than alive.  In our innovation economy where knowledge is essentially free there is no longer a competitive advantage in knowing more than someone else.  Academic content may remain important, but what matters more in the labor market are certain non-cognitive skills and dispositions like critical thinking, motivation, and grit. 

Given the Opportunity Divide that exists in this country and the emergence of a broken talent marketplace, the growing consensus across the political spectrum that a four-year degree should no longer be the only path to a good job in this country is not entirely surprising. Ideas to simplify and improve student aid are included in Speaker Paul Ryan’s policy agenda and making college debt-free in Hillary Clinton’s campaign website.  This political alignment is especially significant at a time when family income now appears to matter more than a young person’s ability for completing college and when nearly half of all recent college graduates are underemployed. 

{mosads}Yet while young people with more education earn more than those with less education, fewer youth are finishing college with the skills needed to compete and prosper in today’s economy.  Moreover, the nearly $1.3 trillion in student loan debt and the elimination of millions of high-skilled jobs over the last decade casts considerable doubt that educational attainment alone can remain a guarantee for gainful employment.  Enter the Obama Administration, which in 2015, announced a pilot program aimed at making higher education more affordable for low-income students.

Introduced last month by the Education Department, the Educational Quality though Innovative Partnerships (EQUIP) pilot program will offer up to $17 million in loans and grants for students to undergo training at eight non-traditional institutions.  These for-profit companies, which include coding academies and online competency courses, will make education and training more flexible for young people and provide more affordable options than have been traditionally offered through higher education institutions.

Young adults neither in school nor working – Opportunity Youth – do not always have the luxury of time to enroll in college and as a result, they are not likely to benefit from federal financial aid.  EQUIP offers Opportunity Youth an innovative way to gain high-quality education and training not reliant on seat time requirements, and would especially help those who may be enrolled in job training programs that are career-oriented and lead to industry-recognized credentials but which are not offered for credit.

EQUIP would also allow lawmakers to evaluate how cross-sector collaboration that mobilizes businesses and education and training providers can change perceptions of Opportunity Youth as a source of entry-level talent for employers and reduce skill gaps employers continue to cite.  Perhaps it may even compel our next president and Congress to pass legislation that formally recognizes for-profit credentialing systems as eligible for federal aid spending. Considering that federal financial aid has traditionally been used for students to attend community colleges or career and technical education programs that are not always aligned to employer demand, this would be welcome news for the 1,500 students who are expected to participate in EQUP in the coming academic year.

Alternative postsecondary education pathways such as career and technical education programs have long suffered from a pejorative perception as places where low-income children and children of color are consigned to a second-rate education.   And so what is most compelling about EQUIP may be that it was not created as a placeholder for non-college bound youth but is being offered as an alternative for postsecondary education – a strategy used by high-performing countries, such as Finland and Singapore, that have larger percentages of students in alternative postsecondary programs and narrower opportunity gaps than the United States.

To be sure, strict regulation will be needed to ensure for-profit programs are not engaging in deceptive marketing and taking advantage of students.  But rewriting the rules for how federal aid can help Opportunity Youth access high-quality postsecondary programs through partnerships with the private sector is a necessary step forward in not just correcting the daily experiences young people without a college degree feel but in comprehensively changing outdated student aid laws.  In this respect, EQUIP may one day prove to have ushered in a new education and workforce system – one that is aligned to employer demand, facilitates cross-sector collaboration, and secures opportunity for all our nation’s youth.

Jonathan Hasak is a Manager of Public Policy and Government Affairs at Year Up.

The views expressed by authors are their own and not the views of The Hill.