This commentary originally appeared in Forbes on February 22, 2016.
Debt and dropout rates are the twin plagues of today’s college students, both in Texas and across the nation. Nationally, the Wall Street Journal reports that the average college graduate will owe $35,000 in student-loan debt (see graph on page 3). Here in my hometown of Austin, Texas, only 49 percent of those who start college complete their degree.
If you are an adult working a job and attending community college in Texas, your chances of graduation are even slimmer. If you can somehow manage to go to school full time while holding down a job, there is less than a 15 percent chance that you’ll ever earn your degree. If you need to go to school part-time—as 80 percent of community college students do—then your odds drop significantly. Nationwide , more than 30 million adults have earned some college credit but have failed to complete their degree.
So, it is notable that a small nonprofit in Austin has developed what they see as a vaccine for the modern plagues of debt and dropout.
“None of our students owes college debt,” said PelotonU’s Director of College Completion, Sarah Saxton-Frump, “and 83 percent of our students are on track to earn their Bachelor’s degree on time. This, while all of them also hold down jobs and go to college.”
How does the PelotonU model work? The school pairs students with high-quality online universities and provides consistent in-person college coaching. PelotonU staff meets biweekly with first-year students to walk through academic and non-academic barriers to graduation. This all occurs at a physical office, where students have the dedicated space and peer support to help them reach their goals.
Key to the approach is working with regionally accredited, non-profit, competency-based universities like Western Governors University and College for America at Southern New Hampshire University.
“PelotonU spends $2,500 per year, per student in direct service costs and also offers scholarships to ensure that tuition is affordable,” said Hudson Baird, Executive Director of PelotonU. “This is the cheapest education option in the city.”
Students range in age from 18 to 65, but share in common a motivation to earn a degree and an employer who supports their efforts. For example, Patrick Crawford, the general manager of a Dunkin’ Donuts store in Austin, completed his high school degree but stalled at the community college level. He had all but given up on finishing his education when Dunkin’ Donuts told him about PelotonU.
“The dream of returning to school was always with me, but I felt it was truly a dream,” he said. “Finding the time and money for school was something I’d need to win the lottery to be able to afford. Who knew my lottery ticket would be named PelotonU? The support PelotonU offers in time, money, and mentorship is invaluable, and makes going to school possible for me.”
Crawford adds that he “would like to mention the ‘College Experience’ that [he] did not receive when [he] went to community college. Before, it was all I could do to finish my projects and make it to class, but at PelotonU, I am immersed in the experience of what I perceive going to a four-year school straight out of high school would be like.”
This is one aspect of its program that PelotonU particularly prides itself on. Face-to-face mentorship, the presence of other PelotonU students, and a flexible curriculum all provide social reinforcement – the “College Experience.”
“This is the least expensive and most effective college education option in the state,” said Rex Gore, co-founder and board member, “and one that will get even more affordable and effective as PelotonU grows.”
Those who follow higher education will recognize this sort of argument. Ideally, innovative programs like PelotonU improve as they grow, discovering new efficiencies that are not possible when a small program is first developed. This, then, is the challenge facing PelotonU: whether it can scale.
As a nonprofit startup, PelotonU currently relies on donations and sponsors. Moving forward, it plans to work closely with universities to provide funding for its ongoing services. Recent trends in Texas higher education in support of innovative solutions for addressing the college affordability crisis lend credence to PelotonU’s confidence in its ultimate scalability.
The College Credit for Heroes program, which awards competency-based credit to military veterans, began in 2011 through partnering with four Texas colleges. By the end of 2013, the program had reached agreements with thirty institutions of higher education in the state, including the entire Texas A&M System. The College for All Texans Foundation recently announcedthat its Texas Affordable Baccalaureate Program, which, like PelotonU, leverages emerging technology and innovative practices to dramatically reduce college costs, plans to expand from two schools to ten.
In the midst of our national student-debt crisis, this diverse array of programs designed to address college affordability gives students and parents a reason to hope for better days ahead. And for taxpayers, the emergence of nonprofit organizations like PelotonU will be especially encouraging. In light of the Federal Reserve Bank of New York’s recent report outlining the significant role the federal government has played in driving up the price of tuition, PelotonU stands out as a private attempt to solve a problem that that public sector, acting alone, both created and allowed to fester for decades.
In short, PelotonU represents a bold alternative to a system of higher education in which costs have spiraled out of control even as students feel they get less mileage out of a college degree. And as the success of such alternatives grows, so will the number of students who not only succeed in enrolling in college, but also in completing their degrees without being forced to wear the straitjacket of debt.